LANSING, Mich. — Surplus money in the 2011 school aid fund would go to community colleges as part of a larger proposal by Gov. Jennifer Granholm to fill holes in the state budget this year and next, according to The Associated Press. The plan included no tax increases and would not reduce education funding, AP reported.

Granholm also proposed a $50 million competition to reward public school districts that consolidate or share services such as transportation and food service, according to AP.

A Michigan Education Association spokesman called the plan a "shell game," according to the Detroit Free Press. The MEA has called for tax reform to generate money for schools, the Free Press reported.

In a report published at Mlive.com, AP said that Granholm would use $200 million of the anticipated school aid fund surplus to support community colleges. Earlier media reports said the total school aid fund surplus is expected to be about $348 million.

Granholm also proposed 3 percent administrative spending cuts in state agencies, a tax amnesty plan and expanded liquor sales hours as ways to increase revenue or decrease spending, AP reported.

There is about $302 million in overspending 2010 fiscal year budget, followed by a predicted $484 million in overspending in the budget year beginning Oct. 1, AP reported. The state is receiving an unexpected $300 million in federal assistance for schools as well as $380 million in additional Medicaid funding, but the Medicaid assistance falls short of the $500 million that Michigan legislators planned on, according to AP.

SOURCES:

The Associated Press, "Granholm details new plan with no tax increases to balance Michigan budgets," August 19, 2010

Detroit Free Press, "Hurdles loom for governor's budget," Aug. 19, 2010

FURTHER READING:

Mackinac Center for Public Policy, "School Funding Myths"

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