Gov. Rick Snyder's proposed Michigan budget would make substantial changes to the levels of funding for K-12 education in
addition to major changes to how businesses are taxed — careful changes that
consider where Michigan stands compared to the rest of the country. But
opponents deride the changes as hurting schools to help businesses. While that
makes a nice talking point, a deeper look shows the budget proposal helping the
afflicted at the expense of the protected.
It’s no secret that the state economy has struggled in the
past decade. In response to deep and broad economic problems, Michigan became a national
leader in tax hikes and raised
taxes on all businesses while favoring a select few. The Michigan business tax, created in 2007, contained dozens of credits for
targeted firms and preferred activities, paid for by generally higher taxes on
other businesses. And even before it took effect, the state added a 22 percent
surcharge on top of it.
In the meantime (some would say as a result), overall
private-sector employment fell 10.8 percent. Yet as Mackinac Center analysts have noted elsewhere, "Since the early 2000s, state and local government jobs as a percentage of total Michigan employment increased from around 13 percent to a high of 15.5 percent in 2009."
There was one area of the state that was largely protected from Michigan’s economic
collapse: the state’s public school system. In particular, the wages and
benefits of school employees have only increased in the past decade. Nationally, Michigan has the 8th highest average
public school teacher salary, and from 2003 to 2009 salaries were the highest
in the nation when controlling for state per capita personal income. Since
2000, Michigan private-sector wages have fallen 25 percent while benefits have
decreased 6 percent. In the same time period, public school teacher wages and benefits increased
by 1.8 percent and 56 percent respectively.
The latest protest from public employee unions and their advocates has been to claim that cutting spending to provide a tax cut for job providers won’t
“guarantee” that new jobs will be created. Undercutting this argument, they are at the same time calling for increased educational expenditures even though more spending
not guarantee better educational outcomes.
There has been some pressure on schools to control their
costs, but looking at the dollars coming into schools shows no decrease in
actual per-pupil funds over the past decade. While the proposed budget’s $300
per-pupil cut takes Michigan schools back to 2006 levels
of state funding, a careful look at the evidence shows that public employees
have, in fact, been remarkably unscathed during Michigan’s decade-long
employee unions and some politicians would have citizens believe that proposed
budget cuts hurt afflicted schools in order to help businesses. In fact, it is
clear that businesses and private-sector citizens are the afflicted.
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