Contents of this issue:
  • Schools reel from mandatory pension increase

  • Superintendent salary, perk offers remain competitive

  • COMMENTARY: Analyst says much school work is below grade level

  • Colorado bill would expand vouchers to college students

  • Florida legislators earmark funding boost to limit class size

  • Testimony begins in case against former Oakland ISD chief

DETROIT, Mich. — A state-mandated increase in schools' payments to the teacher pension fund is causing many districts to make cuts elsewhere in their budgets.

Several Metro Detroit districts are grappling with multi-million dollar deficits on top of the required increase for the pension fund, which will cost large districts up to $2.9 million this year.

State law allows officials to mandate extra payments into the pension fund to make up for bad investments up to five years prior. The fund is managed by the state.

Schools' contribution rates in the 1990s decreased as the pension fund earned money from stock market growth, said Christopher DeRose, director of Michigan's Office of Retirement Services.

"But 2000 through 2002 has not been as good, so we have begun to see an increase in what the school districts have to pay. It is the way the system is supposed to work."

The extra pension expense is a challenge for school district officials around the state, they say, as other financial problems are negatively affecting budgets. "When you put the increase pension cost on top of step increases for wages, and longevity, and health insurance, it puts many school districts in a tough position," Bob Cipriano, director of business services at Dearborn Public Schools, told the Detroit News.

Some districts are laying off teachers as part of budget balancing efforts. Others are saving money by contracting out for bus, janitorial, and cafeteria services instead of maintaining highly paid non-instructional staffs on their payrolls. Still others are bidding out teacher health insurance to find lower cost providers.

Detroit News, "Pension hike wallops schools," Apr. 27, 2004

Mackinac Center for Public Policy, "Government Pension System Needs Reform," June 1991

Michigan Privatization Report, "Contract Out School Services Before Laying Off Teachers," Fall 2003

Mackinac Center for Public Policy, "Clare Schools Using Privatization to Keep Teachers," September 2003

Mackinac Center for Public Policy, "MESSA: Keeping School Districts from Saving Money on Health Care," November 2003

LANSING, Mich. — Budget problems in school districts around the state are not having a negative effect on superintendent salaries and perks, as the demand for superintendents remains high while a dearth of candidates exists in many districts.

The Lansing State Journal reports that many districts are still offering $100,000-plus salaries with additional perks including car leases and monetary incentives. Maria Bolen, finance director at East Lansing Public Schools, said her district is looking for a qualified candidate and must offer competitive compensation packages. "We'll have to," she said. "It is difficult to attract qualified candidates."

Applications for superintendent positions statewide have fallen by half in the last two years according to the Michigan Association of School Boards, necessitating larger salary packages to entice candidates to stay in Michigan. Tim Quinn of the Michigan Leadership Institute is assisting the East Lansing district in its search for a new superintendent. "The investment that they're making in the superintendent will hopefully serve the district for some time," he said.

Lansing State Journal, "Superintendents' pay must top $100K, school districts say," May 3, 2004

Mackinac Center for Public Policy, "Minneapolis Public Schools Teach a Lesson in Privatization," November 1998

Mackinac Center for Public Policy, "The Six Habits of Fiscally Responsible Public School Districts," December 2002

Mackinac Center for Public Policy, "School Funding: Lack of Money or Lack of Money Management?," August 2001

WASHINGTON, D.C. — An educational consultant expressed concern in a Washington Post commentary over lax standards in the nation's high schools, where she says, "much of the classroom work is below grade level."

Ruth Mitchell wrote last week that much of the high school class work she's seen is at an elementary or middle school level. "On one trip to a Midwestern city, I found one out of eight assignments at grade level in two high schools," she wrote. The problem with this lack of instruction creates students that are unable to pass basic standardized tests and move out of high school, wrote Mitchell.

Lax teaching standards are largely an undocumented and unseen problem, according to Mitchell. Most experts and policy makers come from good schools with fond memories of teachers that turned them on to certain subjects, she wrote. "Students in the schools we visit are not turned on. ...They are seen as needing elementary instruction in secondary school; as capable only of drawing and coloring; as in need of discipline rather than encouragement."

The solution, wrote Mitchell, lies in training teachers to deal with students in need of remedial help instead of referring them to other classes and continuing the cycle of failure. For many current teachers, "Their training was simply not adequate to the new demands of standards-based accountability. ... The most pressing need in education for kindergarten through 12th grade today is massive teacher retraining."

Washington Post, "Dumbing Down Our Schools," Apr. 27, 2004

Michigan Education Report, "Michigan lagging in teacher quality says federal agency," Sept. 8, 2002

Viewpoint on Public Issues, "Must Teachers Be Certified to Be Qualified?," Feb. 1, 1999

Mackinac Center for Public Policy study, "The Cost of Remedial Education," September 2000

DENVER, Colo. — The Colorado state legislature approved a plan last week that would alter the way public higher education in that state is funded, creating a voucher system for college students.

The new plan would move some taxpayer money from funding the state's public universities to providing tuition vouchers directly to students who choose colleges in the state. The bill would provide students with $2,400 for the first year at public schools, and low-income private school students would receive $1,200. "It's the first in the nation. I think it's a giant step for changing the incentive so more kids will go to college," said Rick O'Donnell, executive director of the Colorado Commission on Higher Education.

Opponents of the legislation say the shift in funding would be directly reflected in higher tuition rates at in-state institutions, as funding would be redirected to tuition income rather than state grants. Colorado State Rep. Greg Brophy voted against the bill. "I think tuition rates in this state will just be bonkers," he told the Denver Post.

Michigan does not grant college tuition vouchers, but for years it has operated a popular college tuition tax-credit program that was tied to limiting tuition increases.

Denver Post, "Higher-ed voucher bill goes to Owens," Apr. 28, 2004,1413,36~53~2112362,00.html

Mackinac Center for Public Policy, "Education Reform, School Choice, and Tax Credits," April 2002

Mackinac Center for Public Policy, "Friedman Says Vouchers and Tax Credits Useful Route to Greater School Choice," March 2002

Mackinac Center for Public Policy, "The Case for Choice in Schooling: Restoring Parental Control of Education," January 2001

TALAHASSEE, Fla. — A Florida state Constitutional amendment requiring small class sizes will cost more than half of a funding increase earmarked for education, raising concerns about the need for such an amendment.

The Florida legislature approved a budget that expands school funding by another $970 million, a 7.1% increase. More than half of the increase must be used for lower class sizes. Between covering the expense of 55,000 expected new students and rising costs for teacher salaries and inflation, some education officials say spending more to lower class sizes will harm education in the long run.

Repealing the small-class-size amendment "might be something that has to be done," said Wayne Blanton, director of the Florida School Boards Association. "More and more money is going into class size. It's getting worse every year."

Lee Constantine, Chair of the Senate Education Committee, said, "I have never heard any administrator of a school district say they got enough money."

The amendment requires that by 2010, grades prekindergarten through three must have fewer than 19 students, no more than 22 in grades four through eight and 25 in high school. Until then, schools must reduce class sizes by an average of two pupils per year. Cost estimates range from $8 to $27.5 billion while the academic benefits are disputed.

St. Petersburg Times, "School fund boost goes to class size," Apr. 29, 2004

Viewpoint on Public Issues, "Class Size Reduction Is Expensive," October 1998

DETROIT, Mich. — Several former employees of the Oakland Intermediate School District (OISD) testified last week against former OISD superintendent James Redmond to help the prosecution prove that Redmond should go to trial for charges including felony embezzlement.

The preliminary hearing will help determine whether enough evidence exists to begin a criminal trial against Redmond.

Formally, Redmond is being charged with felony embezzlement and a misdemeanor of conflict of interest. During his tenure as head of the OISD, a number of financial transactions occurred that prosecutors are attempting to prove were illegal.

Defense attorneys countered the prosecution's witnesses with evidence that other officials in the OISD had full awareness of what was occurring and should have taken action if they thought the misappropriations were illegal. Redmond's attorneys say he is innocent of all charges.

Detroit Free Press, "Court ordeal begins for ex-Oakland Schools chief," Apr. 27, 2004

Mackinac Center for Public Policy, "Eliminate Intermediate School Districts," August 2003

Michigan Education Report, "What Are Intermediate School Districts?" Winter 2000

Michigan Education Report, "Group files complaints against districts," Spring 2000

MICHIGAN EDUCATION DIGEST is a service of Michigan Education Report (, a quarterly newspaper with a circulation of 130,000 published by the Mackinac Center for Public Policy (, a private, nonprofit, nonpartisan research and educational institute.

Contact Managing Editor Neil Block at

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