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    Some School Spending Sanity


    By natebailey, Section News
    Posted on Fri Mar 23, 2007 at 11:58:55 AM EST

    Listening to the Democrats, you'd think the small cut to school funding passed by the Senate last night was the end of the world.

    Let's judge that by the numbers.

    Read the rest of this week's column below the fold...

    $34.

    $7,051.

    $800.

    1

    2 cents.

    $86-$165

    Of these numbers, you're probably only going to hear about the first one for the next several weeks. But you need all of them to tell the full story.

    Let me explain, one-by-one:

    $34
    This is the per-pupil funding cut to schools proposed and passed by the Michigan Senate. It's a much smaller cut than many had expected. The governor has proposed much larger cuts almost every year of her tenure.

    $7,051
    The amount the state will still provide per-pupil. For the record, per-pupil funding, adjusted for inflation, has increased more than 13% over the past decade.

    $800
    Amount, after the cut, that Michigan's per-pupil funding level is above the national average.

    1
    The number of students a school with 200 students would have to gain to make up the total $34 per-pupil cut.

    2 cents
    Now we get more interesting. Allocating 2 cents of every per pupil dollar toward in-classroom spending would generate an additional $141.02. That's $141 per student. That's over $100 more than the per student cut passed by the Senate. Michigan, as mentioned above, spends among the nation's highest per-pupil. But the actual number of dollars getting to the classroom is among the nation's lowest. Putting just 2 more cents on the dollar into the classroom would have a tremendous and positive impact on children and educators. Any cuts would have to be borne by the bureaucracy that doesn't touch educating students. What a shame.

    $86-$165
    More interestingly yet, this is the range of savings, per-pupil, that a comprehensive study indicated could be saved by changing the mechanism of providing benefits to teachers. Just the mechanism - not the benefits themselves. Right now, many schools provide benefits to their employees through the firm MESSA. It just so happens that MESSA is owned by the MEA (yes, that's the Michigan Education Association - the primary union for Michigan's teachers). By pooling the insurance of teachers, and doing so outside the union structure, the Hay Group's report suggested there would be hundreds of millions of dollars in savings. (That's $86-$165 per-pupil for those who got lost in the acronyms section)

    Allow me to summarize:

    • the cut is minor
    • even with the cut, schools are still getting more per-pupil than they did 3 years ago
    • Michigan's schools will still be funded well above the national average

    And:
    • over $200 per student could be pumped into the classroom through common-sense changes.
    • a $200 increase is much more than a $34 cut.

    Yep, this planned cut is a disaster. Schools will close. Children will be naked and hungry on the streets. Teachers will have to resort to dealing drugs to make ends meet. The world as we know it will come to an end.

    Oh wait...

    < Will Andy Dillon grow a spine and act? | MI Senate Says: Time to live within our means. >
    Display: Sort:
    Great post! (none / 0) (#1)
    by Jeremy Nielson on Fri Mar 23, 2007 at 12:09:41 PM EST
    natebailey, this is awesome.

    Nice work... (none / 0) (#2)
    by Nick on Fri Mar 23, 2007 at 12:24:56 PM EST
    Nice work Mr. Bailey.  

    You mentioned MESSA briefly... that's the next dragon that needs slaying here in this state.  That Hay Group report is pretty shocking if you look at it.  We're basically talking about a money grab by union bosses taking money straight out of the classroom.  

    And on an order much larger than any cut even Jennifer Granholm's pushed since she was first elected.

    Great numbers.  Thanks for breaking it down.

    Those Horrific Cuts! (none / 0) (#3)
    by Bridget on Fri Mar 23, 2007 at 02:53:38 PM EST
    Hi Nate...

    The spin doctors in the drive by media will be whipping up a frenzy over this and trying to show the cuts as severly damaging. Our little darlings will be at risk - all over $34!

    Your breakdown was an excellent example of facts and figures for those of us who don't pay attention to the "finer details" as we should.  When you do a comprehnsive step by step approach to what is really happening with this cut, you put the issue in perspective. Truth be told, the cut is minor.  

    Counter challenges with real details as you've explained will go a long way for those trying to figure out what is real and what is not.

    I can't understand why the Governor and her staff continue to want to pump 4K in scholarships to every kid in Michigan when no one is bothering to analyze and evaluate why post-secondary education costs are 2-3x the cost of inflation as a whole! Where is all the money going in this system (to teachers and administrators of course - not to the schools, the kids or the supply and maintenance system).

    It's time we stopped throwing money into our school systems until we re-vamp what is wrong, curb current spending and cut out the fat before we toss millions more into a messed up system.

    And as you said, it's definately time to take on the teachers unions (MEA) and MESSA. We are long over-due as a state in not taking a good, hard look at these groups who have been working to bleed the system dry. They need to take accountability as everyone else does.

    The time is now.

    Good job on this article!!!

    One more thing (none / 0) (#4)
    by Lunchbucket on Fri Mar 23, 2007 at 03:25:29 PM EST
    It was during the Republican '90s when per-pupil spending increased in Michigan.  Michigan went from $8 billion to $13 billion in the school aid fund in less than 10 years....that's more of an increase than in the previous 30 years of Democratic dominance in the Legislature.

    Let's not forget....most of these school districts are complaining about starving while they have loaves of bread stuffed under their arms. Here is DB's story in the Freep on this:

    Michigan public schools, including intermediate school districts and charter schools, had $1.7 billion in surplus cash in mid-2006, a lot of money for a system teetering on the brink of financial ruin, according to a Macomb County lawmaker who asked for the report on school reserves.


    Bogus Numbers (none / 0) (#6)
    by NoviDemocrat on Sun Mar 25, 2007 at 10:14:20 PM EST
    The state doesn't give local schools $7,085 per student. That's just the number used to determine the amount of total funding that a school can have each year. The state's portion is the foundation allowance times the number of students minus the local revenue raised on the 18 mills on non-homestead properties. Because the amount the state sends to the local district is usually much less than $7,085, the impact of that $34 cut is much higher than you are portraying it.

    That one was for Saul (none / 0) (#7)
    by NoviDemocrat on Mon Mar 26, 2007 at 12:52:00 AM EST
    Saul - yet again, you don't understand how Michigan government is funded!

    • Saul? by Jeremy Nielson, 03/26/2007 05:00:06 PM EST (none / 0)
      • Your buddy by NoviDemocrat, 03/26/2007 11:30:15 PM EST (none / 0)
    At least you tried... (none / 0) (#8)
    by natebailey on Mon Mar 26, 2007 at 02:55:48 PM EST
    Novi Dem,

    While you're correct about the funding mechanism, a $34 cut is still a $34 cut. The source from which the cut comes does not make it more substantive than if it were to have come from another.

    Let's say, hypothetically, that I have 2 jobs and I make $200 a week. Job #1 cuts my pay by $34 a week while my pay at Job #2 remains constant. I now make $166 a week.

    Now lets say that Job #2 cuts my pay by $34 while Job #1 remains constant. What's my weekly paycheck now? Oh, it's still $166.

    No matter what, I still have $34 fewer dollars than I did before.

    And, in the broader context, I still make more than 10% more than the national average. And my healthcare unnecessarily costs 10% more than other employees with similar coverage because my union takes a slice of my insurance premium. And I still sacrfice a relatively high percentage of my revenue to administrative costs.

    Maybe I should address those problems.

    Naw... I'll just keep asking for endless raises. Throwing more money at it will solve the problem.

    Thanks for the talking points (none / 0) (#13)
    by NoviDemocrat on Tue Mar 27, 2007 at 10:42:03 AM EST
    It's good to see that your memorizing your lines. But those aren't the only choices. There's other options and just because Republicans are a one-trick pony doesn't mean that the State has to go that route again.

    from today's Gongwer (none / 0) (#14)
    by Nick on Tue Mar 27, 2007 at 11:08:34 AM EST
    "By embracing a culture of entrepreneurship and doing everything we can to support small business growth, we can rebuild and diversify Michigan's economy one business at a time," Rep. Andy Meisner (D-Ferndale), the lead sponsor of the proposal said.

    The proposal entails providing a personal income tax credit for the health care coverage of a new business owner and their immediate family for the first two years; making research and development tax credits transferable; allowing for an income tax credit for any personal income used to start up a new business..."

    Looks like it's not just a Republican pony.  Meisner might be the most liberal member in the House and he understands that lower taxes are good and higher taxes are bad.

    The governor understands this too.  Every deal she's ever announced, all of those jobs she "went anywhere" to track down, they all came to Michigan because of giant tax breaks and incentives.  

    Tax breaks and incentives she's trumpeted from the walls of the city every chance she's had.  

    If you want less of something, tax it.

    Tax service industry jobs, lose 19,000 of them.  Tax cash-strapped residents who are just barely hanging on as it is?  Increase out-migration.  

    These aren't "Republican" ideas.  It's economics.  Kennedy understood it.  Reagan understood it.  Bush understood it.  And I'm sure you've got tons of problems with the President but one thing you can't argue, the national economy is going like gangbusters since the tax cut in 2001.  Over 3 MILLION new jobs while Michigan has lost over 100,000.  The ONLY state in the union to have lost jobs over the last four years.

    But you're right.  Bigger more intrusive government and a higher tax bill is the answer.  Just give Lansing $3 billion more.  That'll solve our problems.

    The economy (none / 0) (#17)
    by Nick on Tue Mar 27, 2007 at 07:26:48 PM EST
    The economy isn't static.  Just because we haven't raised taxes since 1998, a premise I do NOT agree with, taxes and fees have been raised all over the state just about every year under Jennifer Granholm... remember $2.50 packs of smokes folks?...

    But other states aren't just standing still.  They're sharpening their game, heightening their appeal.  

    It's a dynamic marketplace.  

    And from 2002 through 2006 national employment rose by over 3 million.  It continues to grow.  BLS reports that another 97,000 non farming jobs were created nationally just this past February (the last month for which numbers are available).  Meanwhile, Michigan lost 24,000 between December and January (again, last available).

    We're getting our butts kicked.  And the libs want to raise taxes?  That's JUST what we need.

    You're right (none / 0) (#20)
    by Nick on Wed Mar 28, 2007 at 06:48:40 AM EST
    Tax cuts don't work.

    That's why every business that comes to Michigan, every job that Granholm shouts and sings about creating and every job Andy Meisner hopes to attract with his new legislation are predicated on tax cuts and incentives.

    Because they don't work.

    My bad.

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