Are mandatory funding increases for public schools the key to student success? No

Earmarking sets dangerous precedent

Michigan taxpayers cannot afford the K-16 education funding proposal. The non-partisan and independent House Fiscal Agency has estimated that this proposal would cost approximately $1.1 billion above current state spending on education – in the first year alone. Steady increases in state spending on education would follow.

The K-16 Coalition’s plan to automatically increase annual state government spending on K-12 school districts, community colleges and state universities by the rate of inflation – regardless of education outcomes or changing needs – would remove $1.1 billion of public money from annual review and budgetary control, severely limiting the ability of the Legislature and governor to set and fund state priorities.

According to a recent study prepared by Anderson Economic Group, the amount of funding available for K-12 public schools in Michigan has grown rapidly since the passage of Proposal A in 1994. Between 1994 and 2004, operating revenue increased by 71 percent, price inflation grew about 21 percent, and enrollment in Michigan schools increased by roughly 4 percent. (Most schools have received per-pupil operating revenue increases double or triple the rate of inflation.) During this same time period, property tax debt for capital expenditures grew even more rapidly – an astounding 217 percent. Despite all these increases in funding for public schools, the K-12 education establishment is demanding that more money be fed into a system with no link to providing higher levels of academic achievement.

Michigan taxpayers have a right to know what has happened to all the money invested in our education system since 1994. While we are among the highest spending states for K-12 public education, Michigan remains solidly stuck in the lower half of states relating to academic achievement on almost every measure. If more money meant higher academic achievement, Michigan would be a national leader in K-12 education.

In September, the Michigan Chamber Board of Directors voted unanimously to reaffirm support for a state budget process focused on outcomes where each year there should be a healthy debate in Lansing over setting the price and the priorities of government, along with the funding for each priority. And importantly, there should be an annual evaluation of the effectiveness of program expenditures.

The two primary issues regarding the K-16 proposal are first, how much will it cost? Thanks to the House Fiscal Agency, we know the answer to that question, an additional $1.1 billion the first year with escalating increases for the future. And secondly, how will state government pay for it? The options are either a major tax increase on working families and job providers or a substantial reduction in spending in others areas of the state budget such as health care, public safety, or local government.

Parents and job providers who study the K-16 proposal carefully will be surprised and disappointed to learn that nowhere in the lengthy wording of the petition is any reference to education quality, student achievement, test scores, or graduation rates. The proposal also does not include reform measures to reduce administrative overhead and contain health care and pension costs.

The Michigan Chamber’s position on the K-16 proposal is consistent with the Chamber’s stand on similar proposals which tried to lock in guaranteed funding and bypass the decision making process of the Legislature and governor. In 2002, the Michigan Chamber opposed a proposal by the medical community to earmark tobacco settlement revenue for health care-related programs and projects. Proposal 4 of 2002 was overwhelmingly rejected by the voters – 66 percent "No" to 34 percent "Yes." Interestingly, the loudest opposition to Proposal 4 came from school boards, community colleges, teacher unions, state university presidents and other education leaders – people who now want voters to support an attempt to earmark funding and tie the hands of the governor and Legislature in the budgeting process.

The K-16 Coalition will try to persuade voters that this proposal is different but, despite some procedural and definition variations, it is fundamentally the same concept. Protection for funding increases would be afforded to K-16 public education without assurances of improved performance or accountability measures.

In an editorial that appeared in the Detroit Free Press on Oct. 18, 2002, Mary Sue Coleman, president of the University of Michigan and Peter McPherson, then-president of Michigan State University, wrote: "Responsible budgeting demands frequent reassessment of needs and resources and a good deal of compromise which is the hallmark of the legislative process." They also wrote that their opposition to Proposal 4 was "driven by the long-term negative consequences of the lockup of state monies that is at the heart of the initiative." Their remarks also included a statement that rings true with the current K-16 Coalition proposal: "While proponents might argue that this is the only way to fund some important initiatives, it is the Legislature’s constitutional responsibility to ensure that the best use of the public money is tested every year against other crucial and compelling needs."

The Michigan Chamber of Commerce agreed with the rationale put forward by the education community in 2002 and we stand firmly committed to opposing such earmarking tactics now. We agreed with the Michigan Federation of Teachers and School Related Personnel when they urged their members to vote "No" on earmarking because "it would allow the new legislature no flexibility in dealing with the state’s budgetary crisis and would make it impossible to adjust these priorities in the years ahead based on changing needs or circumstances." (Capitol Report, October 2002)

We even agreed with the Michigan Education Association’s Director of Government Affairs, Al Short, when he said, "Proposal 4 will destroy the Michigan Merit scholarship program and rip a huge hole in the state budget." He added, "If this passes ... it’s going to toss the budget in chaos in the future." (Published 10/20/2002)

The education community needs to provide higher levels of academic achievement. Michigan taxpayers should reject guaranteed funding schemes for education or any other state program.

Jim Barrett is president and CEO of the Michigan Chamber of Commerce.