4M: The Real Structural Problem

For months, district superintendents and their claques have been appearing before the State Board of Education claiming that Michigan's current school finance system has "structural problems." There is a structural problem with school finance, but not the kind being suggested by these beneficiaries of the current system. A friend of mine keenly summarizes the real structural problem as the "Four M’s": the MEA, MESSA, MPSERS and "money."

The first "M" is the Michigan Education Association, a labor union. The MEA, with its $60 million per year in union dues, has ample resources to impede school choice. One classic example of their muscle is the MEA’s running war in the state Legislature and with state officials to end Bay Mills Community College’s ability to continue chartering schools. Another is the union's frivolous lawsuit against the Mackinac Center for Public Policy for quoting its president's praise of the Center's impact.

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But the MEA's manipulation doesn't stop with political bludgeoning, which brings us to the second "M": MESSA, an acronym for "Michigan Education Special Services Association."

The term MESSA is commonly used to refer to teacher health insurance, but MESSA is actually a separate corporation that acts as an insurance administrator. In practice, the union exerts political pressure on school boards to purchase MESSA's insurance as part of collective bargaining agreements. The MEA, in turn, receives income from MESSA, according to the MEA budget document posted on the union's Web site. The union says, "70 percent of all MEA bargaining units enjoy some form of MESSA coverage." Pretty convenient.

How much profit does the union make from MESSA?

Also, according to the union's budget, MESSA and other miscellaneous services will provide the MEA with about $5 million this year. Perhaps this explains MESSA's response to two bills currently in the state Legislature, Senate Bill 55 and Senate Bill 56, which would bring school employee health insurance under the state's auspices. MESSA's Web site says they will "oppose this state seizure of school employee benefits and assault on the traditional collective bargaining process."

The third "M" stands for MPSERS, the acronym for Michigan Public School Employees Retirement System. In contrast to most people in the private sector who have a "defined contributions" retirement plan, public school retirees are guaranteed a minimum payment for life.

Here, too, as with MESSA, the union will wage political warfare to preserve these lavish benefits. The MEA's Web site says, "MEA's retirement consultant monitors all legislation that affects the security and well-being of retirees, and serves as the official watchdog over the Michigan Public School Employees Retirement System."

Question for legislators: If most businesses cannot afford to guarantee their retirees a minimum payment for life, how can the state?

If all this sounds expensive, it is, which leads us to the fourth and final "M" — money — the favored solution of those who benefit from it.

Sometimes the rallying cry for more money is direct, such as, "We need more money." When taxpayers grow weary of hearing this (as they did in the decades leading to 1994’s Proposal A), the establishment camouflages the wording, so it sounds like this: "A comprehensive study of adequacy, equity, ... is long overdue"; or, "Proposal A is broken"; or, "There is definitely a need for structural change in the mechanism of public school funding"; or, "What our public schools are facing is a funding problem, not a spending problem." In the end, all of it means only one thing: more money.

The problem is, no matter how much we spend, the structural problem created by the Four M's guarantees that there will never be enough. That's just one reason why charter schools are so important. They bring a form of market competition to what was formerly a monopoly. Ultimately, competition — if allowed to do its thing — drives prices down.

In the coming months, legislators will be faced with a hard choice: Either go with the status quo — which means giving a nod to the Four M's — or not. At least one legislator, state Rep. Brian Palmer, has signaled that he favors the children more than he does the system. He recently introduced legislation to lift the cap on charter schools.

So while the school establishment is sounding like Chicken Little in its dire warnings of impending financial catastrophe, the sky is not falling on public education. It may be curtains for the monopoly the union has enjoyed, but not for children. The gathering storm clouds simply indicate that the season is right for legislators to recast public education in favor of children and parents, instead of those who play by the Four M's.


Brian L. Carpenter is director of leadership development for the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.