Government schools in Michigan are a high priority, receiving more money than the entire state General Fund budget. School choice will not de-fund government education, but will rather make it more financially efficient and responsible with the resources it already receives. Schools-of-choice will also offer an alternative to government schools, educating students who might otherwise have been consigned to the overburdened government system or assigned to one of the least safe or poorest performing government schools.
Government education in Michigan is the number one budget priority. Expressed in 1996 dollars, expenditures for Michigan government education have dramatically increased between 1970 and 1996, rising by 39.3 percent from $7.3 billion to $10.2 billion.141 Governor Engler's budget for Fiscal Year 2000 increases education spending to more than $13 billion—an increase of 57 percent since 1990, the year he took office. In addition, the budget guarantees that no district will receive less than $5,550 per pupil.142
Expected student population growth may bankrupt government education if alternatives are not devised. The projected growth in the student population in Michigan over the next 10 years will be financially significant. Either the market will bear the burden of providing more schools, or taxes will have to be increased to meet expansion needs of more schools, teachers, administrators, and support staff involved in government education. 143
Government schools have many opportunities to be more efficient. Government schools could save money by privatizing support services such as janitorial, food, and transportation services. Competitive contracting can provide schools with the kind of expertise, flexibility, and cost efficiencies not always available with in-house service provision. Any savings in support services can be used to provide additional resources for the classroom. Properly designed and monitored, contracts between government schools and private providers can help school administrators do more with less.144
School choice will likely reduce bureaucracy and centralization. As researcher John E. Chubb explains, "There is every reason to believe that the administrative structure of a choice system would be less bureaucratized than today's public school systems, and look more like private educational systems, where competition compels decentralization and administrative savings."145 Most choice plans would actually reduce overhead administrative expenditures and increase the availability of more public money.146 An analysis of government schools in New York City found that they have about 240 times the number of administrators as do local Catholic schools, but only 4 times as many pupils.147 Competition will reduce the waste that exists in the current system.
A carefully crafted school choice plan will save the state money and provide higher per-pupil government school funding. The Mackinac Center for Public Policy's Universal Tuition Tax Credit is a school choice plan that will produce significant savings to the state and the government school system. With the maximum credit limited to 50 percent of the per-pupil government school revenues, every student who transfers to an alternative school produces a net saving of at least half of the per-pupil revenue to the state. For example, in the 1998-99 school year, the average foundation grant, per-pupil government school revenue in Michigan was approximately $5,800. The maximum tax credit would therefore have been $2,900. If a student transferred to an alternative school, the state must no longer spend the $5,800 and at most forgoes $2,800 through the tax credit, producing a minimum net saving of $2,900.