Snyder urges high school funding boost in $56.3B budget

Jonathan Oosting, and Shawn D. Lewis

Lansing — Michigan Gov. Rick Snyder is calling for additional spending to support high school classrooms and “at risk” students as part of a $56.3 billion budget plan celebrated by some public education officials but criticized by charter school advocates.

The governor presented his 2018 spending plan to legislators Wednesday, pitching a series of new initiatives while continuing to resist the personal income tax cut proposals his fellow Republicans in the state Legislature are clamoring for.

Snyder’s executive budget recommends an extra $50 in per-pupil funding for Michigan high schools. The targeted $20 million would be a new approach for Michigan, which has not traditionally based funding on grade-specific needs.

“It’s common sense that it costs more to fund a high school” than an elementary or middle school, Snyder told reporters after his presentation, pointing to advanced science classes and chemistry labs as examples. “I don’t think $50 accounts for that cost difference, but I think it really presents a marker and an opportunity to say this is something that deserves further analysis.”

Education advocates are eager for the discussion, with one calling the governor’s proposal “a statement” that it may be time to revisit how the state funds schools across the state.

“This recognizes there are certain expenses that go along with different grade levels, different classes and different arrangements with schools that can’t just be funded like a debit-card system,” said Peter Spadafore of the Michigan Association of School Administrators.

But charter school supporters quickly questioned the potential impact of the proposal. While Snyder has worked to close the per-pupil funding gap between traditional and charter schools, the new plan could exacerbate it, said Gary Naeyaert of the Great Lakes Education Group.

“It’s viewed as a negative for K-8 charters,” Naeyaert said, suggesting the governor is trying to ding charters after his group and others successfully defeated plans to create a commission with broad authority to oversee all types of schools in Detroit.

To pay for the addition high school allocation, the governor’s proposal assumes a funding cut for cyber schools with little or no facility costs, which Naeyaert said would primarily impact charters.

“It’s a deviation from the past,” Naeyaert said. “It looks like political payback, and I don’t know why kids are being penalized because of a political disagreement between adults.”

Clarkston Community Schools superintendent Rod Rock said his district is pleased with the budget proposal.

“We feel that an increase in the foundation allowance, differentiating for high schools, and at-risk funding will benefit Clarkston as we work to provide opportunities for every student to learn, grow, and thrive," he said.

At-risk increase

The governor is also calling for a $150 million increase in special funding for “at-risk” students. Kids eligible for free lunch currently qualify, but Snyder wants to expand the definition to include those who qualify for reduced-price lunches, are in foster care or homeless.

The plan would expand eligibility to roughly 131,000 kids, including low-income students who had been excluded because they attend school in more affluent districts, bringing total state funding for at-risk students to $529 million a year.

“We know if we want to become a top 10 state, we have to address the issue of poverty,” said Michigan Superintendent Brian Whiston, who praised the governor’s proposal.

Madison District Public Schools superintendent Randy Speck said additional funding opens the door for more discussions.

“Any additional dollars that can be allocated to close the funding gap and to recognize the need to focus on at-risk students is a proposal worth talking about and discussing,” he said. “ The governor’s unique  proposal is one that can initiate a discussion about the needs of all students in public education in Michigan”

State Rep. Jon Hoadley, D-Kalamazoo, said he was initially pleased with the at-risk proposal but would like to see Michigan make an even bigger investment in education.

“If we start cutting the pie differently, as opposed to just making more pie, are we really solving the education problem?” he said.

The $14.2 billion School Aid portion of Snyder’s budget proposal includes a per-pupil funding bump of either $50 or $100 for every district in the state, depending on how much they currently receive.

Snyder cut per-pupil spending in his first 2012 budget, partially owing to a reduction in federal funding. But he and the Republican-led Legislature have increased K-12 funding each year since, including more money for the state’s teacher retirement system.

Michigan’s minimum per-pupil foundation allowance was $7,316 in 2011, dipped to $6,846 in 2012 and rebounded to $7,511 in the current fiscal year. It would reach $7,611 under the governor’s new proposal.

“You never run a business by saying how much you’re improving, as opposed to are you doing enough to get the job done,” Hoadley said. “If you’re two feet under water or six feet under water, you’re still drowning.”

Snyder's budget also proposes $7 million to help stabilize budgets in school districts experiencing enrollment declines, which Rock called a key challenge for most districts in the state.

“Simply put, families are having fewer children, since the recession,” said the Clarkston superintendent. “Given the fact that Michigan provides funding for schools on a per-pupil basis, even with increases in funding, a loss of students could mean an overall reduction in funding. Given the broad impact, I believe it is vital for the Governor and Legislature to make sure that every district is experiencing an increase -- rural, suburban, and urban -- regardless of enrollment fluctuations.”

No tax cuts

House Speaker Tom Leonard, R-DeWitt, thanked the governor for “starting the budget negotiation process” on Wednesday but made clear he wants tax cuts on the table as legislators work to finalize the budget by June.

Leonard has endorsed a plan that would reduce the state’s 4.25 percent personal income tax to 3.9 percent in January 2018 and then roll back the rate by 0.1 percentage point each year until the income tax is zeroed out, a process that would take 40 years.

“It is well past time to give the people of Michigan the tax relief they deserve,” Leonard said in a statement.

But Snyder and Lt. Gov. Brian Calley, in their presentation before a joint session of the House and Senate appropriations committees, sought to tamp down the tax-cut fever by highlighting looming budget pressures.

Calley reminded legislators of several tax code changes the Republican-led Legislature has made in recent years, including expansion of Homestead Property Tax Credits approved as part of a road funding package that also raised gas taxes and registration fees.

All told, various tax and fee reductions are set to drain state coffers by more than $2.1 billion over the next three years, said Calley, who led a 2014 personal property tax reform initiative that is still being phased in.

“The idea of passing tax relief and spreading it over several years is not a new idea,” Calley said. “Over the course of the last six years it’s happened many times.”

But the history lesson seemed to have little effect. The chairs of both the House and Senate appropriations committees said after the presentation that they will continue to push for tax relief during budget negotiations.

Snyder is resisting a broad income tax cut but reiterated Wednesday that he would be willing consider a reasonable proposal.

“I don’t view it as throwing gauntlets down,” he told reporters. “The issue I have is to the degree people want to propose something, you need to propose what you’re going to cut or where else you’re going to raise revenue.”

More savings, more for universities

Michigan has a $330 million surplus in unspent revenue from last year, but Snyder wants to put most of it into a state savings account. His proposal calls for a $260 million deposit into the “rainy day fund” that could be tapped during a future budget crunch, a move that would bring the balance to more than $1 billion.

The budget also proposes $48.8 million in “continued support” related to the ongoing Flint water contamination crisis, along with a $6.8 million investment in statewide drinking water quality programs.

The governor, who has pushed for major spending increases to maintain or replace against infrastructure, is calling for a $20 million deposit into the Michigan Infrastructure Fund as a “down payment” on future investments. He proposed a $165 million deposit last year, but legislators approved $5 million.

General fund spending would increase from about $10 billion to $10.1 billion under the governor’s proposed budget, which includes $9.2 million for 100 new state police trooper recruits and authorization to construct a new psychiatric hospital to replace the Caro Center in Tuscola County that was built more than 100 years ago.

General fund revenue is discretionary money that legislators can spend on key priorities. The bulk of the budget is comprised of federal funding for specific programs and other restricted state revenues.

Spending on Michigan’s 15 public universities would increase roughly 2.5 percent under Snyder’s budget proposal, which calls for bumps in both operational and performance-based funding.

The $1.43 billion plan would bring collective university funding above 2011 levels, before Snyder and the GOP-led Legislature slashed higher education funding to balance the 2012 budget.

“We’re making a good investment above inflation and higher ed and bringing them back to levels (after) we had to do some difficult things back in 2011,” Snyder said.

Despite the collective increase, variations in state funding formulas mean four public universities would continue to receive less funding in 2018 than they did seven years earlier.

Appropriations for Wayne State University totaled $214.2 million in 2011, according to the House Fiscal Agency, but would total $200 million under Snyder’s latest proposal.

Michigan State University got $283.7 million in 2011 and would qualify for $282.6 million in 2018. Funding for the University of Michigan-Ann Arbor and Eastern Michigan University would also remain below 2011 levels.