Michigan school districts are in survival mode – Fighting to keep doors open


March 8, LANSING, MI – Embattled Michigan school districts are bracing for per-pupil cuts of at least $400 in the 2010-11 school year unless the Legislature and governor take rapid steps to secure additional money for K-12 education.

Districts are already taking drastic steps as they struggle to deal with the minimum $165-per-student cut in the current school year, fueling deep concern from every corner of the state, said Tom White, who chairs Save Our Students, Schools and State (SOS).  The coalition of 16 school organizations is working to convince Michigan lawmakers to fix Michigan’s school financial picture.

“The funding mechanism for public schools is broken and the School Aid Fund this year totaled about  $10.5 billion – $1 billion less than two years ago,” said White.  “In fact, school finances are in even worse shape than they were in 1994, when voters approved the landmark Proposal A, shifting K-12 financing from the property tax to the sales tax.  The situation is untenable.”

Dozens of schools around the state are already cash-strapped, and may be pushed into deficit status, the equivalent of bankruptcy, according to White and David Martell, executive director of the Michigan School Business Officials (MSBO) and a member of SOS.  The looming financial disaster has schools scrambling to stay afloat, from closing schools and cutting positions to operating on a four-day school week.

“As we all know, Michigan schools continue to face tremendous economic uncertainty and the answers to our survey are a clear sign that the state’s budget crisis is having a direct impact on teaching and learning in our schools,” said Martell.

Martell’s organization recently surveyed local school district business officers about their financial status. More than 300 districts responded to the “Survey of Pain” and the results were disturbing:

  • 86 percent of districts expect additional teacher and staff layoffs in the 2010-11 academic year
  • 85 percent expect class size will continue to grow, resulting in less individual interaction between a student and a teacher.
  • 21 percent of school districts expect to close at least one school building in the coming year.

The cuts will be on top of the 3,000 teachers, administrators and support staff already laid off this year.  Officials say that without a quick injection of cash to schools, almost 4,000 additional layoffs could occur in the near future.

“We urgently need to reform our educational finance system and we are in desperate need of new ways to fund our schools,” said White. “We live in a pass-fail world and if Lansing doesn’t pass something – and soon – we will all fail.”

During Michigan’s decade-long recession, people have cut back on major purchases and the sales tax has become a much less reliable revenue source, White explained.  That’s why SOS supports Gov. Jennifer Granholm’s proposal to reduce the sales tax from 6 percent to 5.5 percent and expand the tax to cover a broad array of services such as haircuts, lawn care, dry cleaning, legal services and tickets to sporting events.  The additional revenue– about $400 million – would be earmarked exclusively for K-12.

SOS also supports the Governor’s proposed reforms of the retirement system for school employees that is run by the state. Her proposal offers incentives for retiring, and reduced benefits for current and future retirees.

To help contain spiraling health care costs, the SOS supports the legislation that would require that all school employees pay a portion of their health care premiums. “Most of the member organizations of SOS represent school employees. They recognize we all need to make sacrifices to help fix the problems with school funding,” says White.

“Michigan has been in a recession since 2001.  When recovery comes, it will be slow,” said Martell. “Unless we have major restructuring in our tax base and education delivery process, schools will continue to have significant budget challenges. This survey is a snapshot of the measures that school districts are taking to stay alive.”

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