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School Funding Reform Getting From Here to There

School Funding Reform Getting From Here to There. MAISA at MASA Mid-Winter January 28, 2010 Tom White, Chair, SOS. Save Our Students/Schools/State Coalition started by MELG in September School groups as partners Adding others Three Point Mission Fix Michigan’s school funding system

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School Funding Reform Getting From Here to There

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  1. School Funding ReformGetting From Here to There MAISA at MASA Mid-Winter January 28, 2010 Tom White, Chair, SOS

  2. Save Our Students/Schools/State Coalition started by MELG in September School groups as partners Adding others Three Point Mission Fix Michigan’s school funding system Create a proposal addressing state revenues Equity and stability of funding About Us

  3. 2. Communication and Grass Roots Advocacy Provide materials, information and background Utilize electronic and social media Create system and support for grass roots Provide support, direction, materials MASA Regional Presidents’ role Like never before SOS Mission

  4. SOS Mission • Support efficiency and effectiveness • Open to change • Facilitate thoughtful self-evaluation • In both management and educational processes • Legislative agenda for reform • Goal to reduce costs and increase effectiveness • MASA Lead Forward

  5. Efficiency and Effectiveness • We need to seriously evaluate how we operate • Voluntary collaborations/partnerships seem more viable than “forced” consolidation • Time, expense, political roadblocks • Relatively small savings probable, but worth evaluating • Transparent evaluation based on data gives us political credibility and is the “right thing” to do

  6. The Environment • Michigan’s Economy • Overdependence on declining auto industry • Decline from 346,000 jobs in 2000 to 77,500 jobs in 2010 • Mich. 3 automakers declined from 70% + market share in 1990’s to 42.5% in 2009 • Total sales for light vehicles was 17 million in 2000, to approx. 10 million in 2009 • Employment growth starting in 2011?

  7. The Environment • Michigan has lost 1 in 6 jobs since 2000 • No longer a high wage state • Personal Income through 1970’s was above US average • Around US average in 80’s and 90’s • Mich. was 13% below US average in 2009, projected 38th-40th lowest for 2010

  8. State Budget • Over past 5 years(05-10) MI General Fund has declined from $8.8 billion to $7.8 billion • Over last 8 years (02-10) state spending for • Corrections has risen 17.6% • Community Health has risen 16.3% • K-12 has declined by 6.8% • Higher Education has declined by 16.4% • Revenue Sharing has declined by 20.7% • Human Services has declined 24.7% • Total has declined by 4.1%

  9. School FundingFacts • Michigan is NOT one of the most generous states for funding K-12 education. • For 2006-07 (most recent data available from NCES) • US Average = $9,683 per pupil revenue • Michigan = $9,922 • Michigan’s Rank = 20 • We were 8th in the early 2000’s • Since Michigan’s funding is going down, not up, our rank will probably be falling further

  10. Comparing Michigan’s Taxes • The Tax Foundation (www.taxfoundation.org) says: • Michigan’s state/local tax burden is below the national average • Michigan = 9.4% of income and ranks 27, with per capita income of $39,273 and per capita state/local taxes of $3,694 • US Average = 9.7% of income, with per capita income of $44,254 and per capita state/local taxes of $4,283 • Michigan’s Business Tax Climate in 2010 ranks 17th with 1 being “lowest/best” • Indiana = 12th, Ohio = 47th, Wisconsin = 42nd

  11. Sales and Use Tax 42% • Income Tax 19% • 6 Mills on All Property 16% • Federal Funds 11% • Lottery 6% • Tobacco Tax 3% • Liquor, Casino, specific Real • Estate Transfer Taxes 3% • Few sources of funds that are not dependent • on the economy.

  12. Pupil Counts FallingOver Time

  13. Increasing Costs: Retirement/MPSERS Rate

  14. MPSERS Projected Rate (Projected) Every 1% Increase in Costs Totals $84,000,000 or Approximately $51.00 Per Pupil Statewide,

  15. Per Pupil FundingRecent History • 2008-09 = $7,316 per pupil • 2009-10 = $7,151 per pupil • 2010-11= ? Reduction of $268 per pupil? • Also consider increase cost of MPSERS at $75 +/- • Also consider the state is using $180 million in one-time ARRA funds or $115 per pupil to keep the reduction from being worse!

  16. Conclusions • Michigan is: • Not a high tax state for individuals or businesses • About average for school funding • Increasing expenses to K-12 while decreasing revenues for schools • Losing tax revenue $2.0 billion shortfall for 2010-11 for SAF + GF • In deep economic difficulty as a state

  17. Conclusions? • Michigan’s, “new normal” is …? • The Legislature is like to … ? • The Legislature won’t want to …? • Schools need to … ? • Blood in the streets?

  18. Brutal Facts • Increasing taxes enough to matter is unlikely. • Michigan’s economy may fall some more before starting to pick up slowly. • It will be difficult for any one group to “force” change.

  19. Options • Partnering with other groups vs. Going it alone • State Level Partners: Business, Labor, Universities, State and Local Government, Good Government Groups • Local Level Partners: Your parents, community, business groups

  20. Near Term • May be an opportunity in 2010 • Reduce expenses through legislative agenda • Partnering with another group or groups • Business leaders proposal • Governor’s budget

  21. Long Term • Prepare to cut and make sacrifices • Bargaining concessions becomes a business necessity • Need to re-think how we educate students: is there a more efficient and effective way?

  22. PossibleReform Agenda • Collective Bargaining – strikes, impasses • Retirement – Capping our costs, altering vesting • Health Care – Pooling as an option; premium sharing as a requirement • Mandatory bidding of non-instructional services • Tenure and …

  23. The ToughQuestions • How do we address the full state budget situation ? • Not just about education funding • How do we avoid the tendency for school community to fragment and work at cross purposes?

  24. The Tough Questions • Can this just be about funding of schools? • Openness to change and thoughtful self-evaluation • Generate ideas/actions for both education of students and management of schools • Will schools be willing to tell their stories despite the short-term, “choice” consequences? What will help?

  25. The ToughQuestions • Can we get a groundswell of grassroots support? • Willingness to increase revenues/taxes? • How to engage? • Are schools prepared for, “the new normal”? • What is it? • What should we be doing?

  26. The ToughQuestions • Can we do this legislatively or do we need a ballot proposal? • Can we do this as the school management community alone? • Who can we coalesce with/at what cost?

  27. The Tough Questions • Why can’t K-12 education take cuts like other budget areas? We (the legislature) have cut state government by 20-30%, cities and counties and universities have been cut… why not us? • What about pay and benefits for public school employees?

  28. Messaging • Education is an economic development issue • Good educational systems attract/sustain businesses • Education works for students and society • Just cutting education funding and hoping for the best is like creating potholes and expecting them to fill themselves… it takes a “fix” not wishful thinking

  29. Messaging • We need school funding reform… the status quo is not working for taxpayers or schools LANSING DO YOUR JOB • The impact of funding cuts in our district is/will be… • Reverse the cuts… give us time to prepare

  30. Revenue Options and Issues • Graduated income tax • Loopholes • Sales tax on services • Local options • Fixing infrastructure issues • Fixing the business tax climate

  31. Consolidation A Solution? • Consolidation of school districts is an issue with many outside the school community • Data does not seem to support bigger=less expensive or better • Michigan is near national averages for administrative expenses • Total administrative costs around 12%

  32. How Do We Bring Change? • Get involved with SOS • Drum beat of information • Keep on your legislators…bring community members • Unprecedented community outreach • Transparent and fact based

  33. How Do We Bring Change? • Find the partners that best fit our goals • Work all the angles • Position ourselves for change • Doing our part • Seeking the common good • Making changes • Persistence pays off!

  34. Our Assets • Belief in the value of public education • Evidence/data to support our beliefs • Willingness to transform education • Passion of members of our communities, parents, colleagues • Potential for broad network and support

  35. Strategic Issues • Making something happen in 2010 • Working on efficiency and effectiveness for the future – reshaping and transforming education • Keeping our communities engaged • Legislative agenda

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