Contents of this issue:
Granholm pushes sin tax hikes for education
Teachers opting out of MEA's extra fees by June 1 deadline
Union protests nonunion construction firm in school expansion
East Detroit case may uncover Macomb County scheme
Federal student loan program may increase interest rates
Poll: Students disruptive, hurt learning
GRANHOLM PUSHES SIN TAX HIKES FOR EDUCATION
LANSING, Mich. — A projected $54 million shortfall in the state's
education budget inspired Gov. Jennifer Granholm to sponsor a tax
increase on cigarettes and liquor earmarked for education and
health care to make up for the deficit.
The tax increase, 75 cents per pack on cigarettes and a $32
million tax increase on liquor, would generate an expected $295
million for the state. The money from smokers and drinkers would
be given to the state's education fund, while the rest would be
spent on Medicaid. If approved, Granholm's planned tax increase
would bring the total cigarette tax to $2 a pack, making
Michigan's the highest in the nation.
According to state budget researchers, Michigan is facing an
upward trend of growth and job creation this year and in 2005,
which will alleviate budget shortfalls in the future.
Detroit News, "Granholm seeks quick sin tax hike," May 19, 2004
Mackinac Center for Public Policy, "Lawmakers Could Balance
Budget by Cutting Spending and Selling State Assets," May 2004
Mackinac Center for Public Policy, "Sinful Sin Taxes," April 2004
TEACHERS OPTING OUT OF MEA'S EXTRA FEES BY JUNE 1 DEADLINE
MIDLAND, Mich. — MEA members have until June 1 to opt out of
paying $200 in new fees before the union begins automatically
deducting the money from teacher paychecks in the fall. Union
officials in one district received so many teacher inquiries
about the fees that they waived their normal procedure for
allowing members to avoid the extra payments.
A teacher and MEA member in a Southwest Michigan school district
reported that she informed her colleagues of the MEA's new fees
Michigan Education Digest
first reported it online May 11.
The teacher, who did not wish to be identified, said the news
created "quite a buzz" among MEA members who said they had not
been aware of the MEA's plans to hike fees. Union documents
related to the fees posted on the Digest's website have been
downloaded more than 1,000 times by MEA members and others.
Although a union memo says members must "write an individual
letter" by June 1 to avoid the fees, a union official told
teachers in the Southwestern Michigan district that they could
opt out of the fees by merely sending an email to the local union
Teachers who opt out will save ten dollars per year for 20 years.
MEA officials say the extra money would bolster the union's
political clout by automatically adding members to the union's
retiree organization. If no members opt out, the move is
expected to raise another $1.1 million annually for the union.
The state's fourth-largest newspaper, the Oakland Press, has
editorialized that the union should "change its ways, not raise
its dues." The editorial stated, "The union's quest for more
dollars for its defense is not a good sign."
Oakland Press, "MEA should change its ways, not raise its dues,"
May 17, 2004
Mackinac Center for Public Policy, "100,000 Public School
Employees Near Deadline to Save $200 Each," May 2004
Michigan Education Association memo, April 30, 2004
Michigan Education Association flyer, "All Inclusive Membership,"
April 30, 2004
UNION PROTESTS NONUNION CONSTRUCTION FIRM IN SCHOOL EXPANSION
SAGINAW, Mich. — The Saginaw-based Iron Workers Union Local 25 is
protesting a construction project for the Swan Valley School
District because the firm it hired to complete the work for the
best price is not unionized.
The firm hired by the district to expand three Swan Valley
schools, Midland-Based Helger Construction, bid $96,950 for the
work, which is $8,000 less than the union's bid. Union workers
criticized Helger of "substandard" wages for its employees,
allowing them to win the bid.
Though Helger is a nonunion company, state law requires it to pay
its workers on government construction projects a "prevailing
wage" pegged to the pay of unionized employees.
Swan Valley superintendent Richard Syrek said the choice to hire
nonunion Helger was in the interest of savings. "That's a lot of
money," Syrek told the Saginaw News.
Prevailing wage laws increase the cost of public buildings,
including schools. In 2003, the Mackinac Center for Public
Policy found that the state of Michigan could save over $400
million annually by repealing its prevailing wage law. Exempting
just public schools from the law, as the state of Ohio has
already done, would save taxpayers $150 million per year
according to the findings.
Saginaw News, "Union upset with school district's decision,"
May 19, 2004
Mackinac Center for Public Policy, "Prevailing Wage Repeal Would
Save State $400 Million Annually," January 2003
Mackinac Center for Public Policy, "Michigan's Prevailing Wage
Law and Its Effects on Government Spending and Construction
Employment," September 1999
EAST DETROIT CASE MAY UNCOVER MACOMB COUNTY SCHEME
DETROIT, Mich. — A man believed to have been the leader of
successful schemes to embezzle millions of dollars from
construction contracts in two Macomb County school districts
appeared in a U.S. District courtroom last week to accept a plea
bargain with prosecutors.
William Hudson, along with several others, will go on trial
beginning June 15 to uncover the extent of the operation, which
skimmed $3 million from construction contracts in the East
Detroit and Clinton Community school districts between 1990 and
2000. At least 18 others have been charged in connection with the
investigation; ten have pleaded guilty so far.
The government has charged the former superintendents of both
districts along with contract workers and board members in
connection with Hudson's racketeering and money laundering.
Hudson has been free on $1 million bail since his arraignment in
Detroit Free Press, "Plea may unravel Macomb Co. school billing
scheme," May 18, 2004
Michigan Education Report
, "Financial scandals exposed in
Michigan school districts," Fall 2002
FEDERAL STUDENT LOAN PROGRAM MAY INCREASE INTEREST RATES
WASHINGTON, D.C. — Under a new proposal, students participating
in federal student loan consolidation programs would lose the
ability to lock in a low interest rate for the life of their loan
and be obliged to pay the current interest rates on the principal
Currently, the federal government subsidizes the difference, if
any, between the locked-in rates and the prevailing interest
rate. The plan to end that subsidy would save the government $21
billion over the next seven years, according to proponents.
Lawmakers say they plan to use the savings to decrease loan
application fees and increase the amount of money available to
loan to undergraduate students.
Because students repay federal loans only after graduation, "The
variable rate will impact students at the back end who have
already graduated, who have already been given that leg up," said
Rep. Howard McKeon, R-Calif. Current indicators show that the
fixed interest rate for 2006 would be 6.8 percent, and is capped
at 8.25 percent.
Lansing State Journal, "Proposal would sharply increase interest
on student loan payments," May 19, 2004
Mackinac Center for Public Policy, "Student Loans and the High
Cost of College," November 1997
POLL: STUDENTS DISRUPTIVE, HURT LEARNING
LANSING, Mich. — A new study found that poor student behavior
negatively affects the education of fellow students and may be a
leading cause of the high turnover rate for new teachers.
The study, conducted by New York-based Public Agenda, includes a
survey of 1,000 teachers over the behavior of their students and
its effect on the learning environment. "Rowdiness, disrespect,
bullying, talking out, lateness and loutishness — these
misbehaviors are poisoning the learning atmosphere of our public
schools," Public Agenda President Ruth A. Wooden said in a press
Unfortunately, for the teachers and students that are exposed to
poor behavior, little can be done to curb the behavior, because
"The present legal environment undermines order in schools by
enabling students and parents to threaten a lawsuit over
virtually anything," said Philip K. Howard, Chair of Common Good,
a coalition dedicated to restoring common sense to U.S. law.
According to the study, 82 percent of teachers and 74 percent of
parents believe that the biggest school problems are due to
parents' failure to teach and enforce discipline in their
children. "It's way past time to focus on solutions to this
impediment to educating all our children," said Wooden.
Lansing State Journal, "Many students disruptive in class, poll
finds," May 24, 2004
Public Agenda, "Discipline Problems, Unruly Behavior Seriously
Threatening Student Achievement," May 11, 2004
Michigan Education Report
, "Lack of Support Makes Teachers Quit,"
Early Fall 1999
MICHIGAN EDUCATION DIGEST is a service of Michigan Education
), 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.