Contents of this issue:
  • Federal government tells states to spend surplus cash

  • Census study ranks high school, college graduates in states

  • Detroit dissolves "rainy-day" fund to end $150 million deficit

  • State Senate approves several ISD oversight bills

  • Teacher tenure system questioned

  • NEA national convention exhibits political overtones

  • COMMENTARY: Lack of money for education an overblown issue

WASHINGTON, D.C. — The federal Department of Education informed states last week that they must promise to spend a combined $2 billion surplus this year to ensure that their funding is renewed.

The Department found that all states have cash balances remaining for federally funded programs. Budget rules in Washington only reauthorize funding based on money spent by each state on such programs, so federal officials suggested that states spend as much of their surpluses as possible to ensure they receive the same level of funding during the next funding cycle, which begins Sept. 30. "We've literally flooded the system with cash, and it's time to start focusing on improving student achievement instead," said Rep. John Boehner, R-Ohio.

In addition, the Department confirmed figures that show $16.8 billion in unspent federal funds to states that date back to the Clinton administration, allaying calls for increased spending on education programs required under the recent No Child Left Behind Act. Some state education officials, however, say that those numbers do not reflect the complexity of those programs and how funding is spent and regulated.

ABC News, "U.S. Tells States to Spend School Funds,"
June 29, 2004

Mackinac Center for Public Policy, "School Funding: Lack of Money or Lack of Money Management?" Aug. 30, 2001

WASHINGTON, D.C. — Census figures released last Tuesday show that Michigan ranks near the median among states for the number of its residents holding high school diplomas but ranks near the bottom in college degree holders.

Texas' population has the lowest number of high school graduates in the nation for the second straight year. While a record 85 percent of Americans age 25 and older hold a high school degree or equivalent, only 77 percent of Texans in the same demographic meet that standard, according to the U.S. Census Bureau. Michigan, with 88 percent of that demographic holding high school diplomas, is ranked 22nd in the nation.

But only 23 percent of Michigan residents hold a four-year college degree, ranking the state at number 39. "I find it remarkable that we have some of the finest academic institutions in the world — some of the largest and some of the best rated," said Michael Bernacchi, a marketing professor at the University of Detroit-Mercy. "And on the other hand, when you take a look at our population, degree wise, it's not carrying its weight."

Detroit News, "Michigan ranks low in college graduates," July 1, 2004

Houston Chronicle, "Texas graduation rate worst in nation, again," June 30, 2004

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

Mackinac Center for Public Policy, "Graduation Rates an Imperfect Measure of School Excellence," January 2002

DETROIT, Mich. — The Detroit Public Schools avoided a projected shortfall of $150 million next school year by cutting budgets $79 million and using nearly all of its "rainy-day" savings fund--$73 million--to make up the rest of its budget.

Last fall, district officials predicted a budget shortfall of $55 million based on now-faulty assumptions about the number of students enrolled in district schools. That shortfall was downgraded to $152 million after more reasonable enrollment predictions were used, which will be added to a projected $91 million deficit next fiscal year.

Falling student enrollment is not the only cause of the shortfall, according to senior deputy Chief Executive Officer Robert Moore. "The overhead is sucking the money out of the classrooms because there are too many schools," Moore told the Detroit Free Press. In addition, increased salaries and health care and pension expenses account for over $50 million of the shortfall.

Detroit News, "DPS solves $79 million budget deficit," June 29, 2004

Detroit Free Press, "Detroit schools' shortfall worsens," June 29, 2004

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

Mackinac Center for Public Policy, "School Funding: Lack of Money or Lack of Money Management?" Aug. 30, 2001

LANSING, Mich. — The state Senate last week unanimously approved three bills that would require greater oversight and more local control over intermediate school districts (ISDs).

The Senate bills come after the state House approved a measure late last month that would allow voters to choose and recall ISD board members. In the Senate legislation are requirements that ISDs receive competitive bids for construction projects and make ISD board member selection more open to the public in at least two public hearings. Currently, local school district boards choose most ISD boards.

Some ISD officials expressed their opposition to several pieces of legislation under consideration by the House and Senate. Bill Miller, superintendent of the Washtenaw Intermediate School District, said one proposal that would require ISDs to report quarterly to the public its expenditures on travel and conferences would add another layer of bureaucracy to the current system. But, "The intent is not to cause financial hardship that could hurt kids," said Brian Palmer, R-Romeo, chairman of the House Education Committee. "The intent is to make sure that funds are used properly."

Ann Arbor News, "Bills concern area ISD chiefs," July 1, 2004 1088694718154370.xml, House Bills 5376, 4947, 4338

Detroit News, "State Senate approves some reforms to ISDs," July 1, 2004

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

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

Mackinac Center for Public Policy, "Less Government, Not More, Is Key to Academic Achievement and Accountability," Oct. 3, 2001

WASHINGTON, D.C. — Many administrators and national leaders are questioning the current system of teacher tenure, saying that the system protects truly poor teachers from dismissal and hinders the education of the nation's children in the process.

Defendants of the current system say tenure protects teachers from baseless firings and political activity that may stir up retaliation. "It's protection against the false accusations, against politically trumped up charges, against people who insist you must teach a certain way or risk getting fired," said Penny Kotterman, president of the Arizona affiliate of the National Education Association.

However, many teachers that do not meet expectations cannot be dismissed due to overprotective tenure rules, harming some students' education. Sen. John Kerry of Massachusetts, the presumptive Democrat nominee for president, expressed concern that the current tenure system keeps truly poor teachers in the classroom and wants to reform the system to allow schools to act quickly on teachers not providing a solid education.

CNN, "Teacher tenure under scrutiny," July 5, 2004

Michigan Education Report, "Tenure law is impediment to school reform," Spring 2000

Mackinac Center for Public Policy, "MEA Wastes Public School Funds Defending Unqualified Teachers"

WASHINGTON, D.C. — Last weekend's annual convention for the National Education Association, the nation's largest union of school employees, exhibited political overtones, say reporters, and many speakers rallied for partisan projects and movements.

Opening remarks at the convention by NEA president Reg Weaver openly called for a movement to defeat current president George Bush and criticized Education Secretary Rod Paige. Though a quarter of the union's membership are Republicans, Weaver declared that, "Our 2.7 million members can be the 'X-factor' in this election. We and our pro-public-education allies can and will make a decisive difference."

Mr. Weaver focused on the union's efforts to change the No Child Left Behind Act, a bipartisan effort passed in 2002, and a lack of federal funding for education. "There is no way around it: No Child Left Behind forces us to spend money we don't have, on programs we don't need, to get results that don't matter," said Weaver.

Administration officials have rejected claims of unfunded education mandates, as federal spending on education has increased 51 percent since 2000.

Washington Times, "Teachers union calls for defeat of Bush," July 5, 2004

Mackinac Center for Public Policy, "Voluntary Unionism Puts Interests of Students and Teachers First," February 2001

Mackinac Center for Public Policy, "Union Political Involvement," December 2001

NEW YORK, N.Y. — A New York Post op-ed published last Friday highlighted a survey that shows when people are informed of the national average per-pupil expenditure, a majority say the current level of funding should be enough to educate students.

The commentary, by Jay P. Greene and Marcus A. Winters of the Manhattan Institute, reports that, "Almost 86 percent of the public underestimates how much money public schools get. And the average American is off by a factor of two." When pollsters told people in their survey that the actual per-pupil expenditure is between $7,000 and $9,000, 62 percent said that amount should be enough. In the 2001-2002 school year, the actual average per-pupil amount spent was $9,354.

The authors also reject claims that schools are under-funded, "given that per-pupil spending has doubled over the last three decades while student achievement has remained stagnant." In reality, say Greene and Winters, "America's public schools spend more than $400 billion each year — more than we spend on national defense (even with the War on Terror) and more than all federal domestic programs except Social Security and health-care programs."

New York Post, "The public schools' dirty little secret," July 2, 2004

Mackinac Center for Public Policy, "School Funding: Lack of Money or Lack of Money Management?" Aug. 30, 2001

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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