If you're the parent of a student in one of Michigan's public schools, odds are you've been contacted by your local district about the current "funding crisis." You may be invited to a rally or a school board meeting or be asked to review information about declining state revenue.

Many education officials will say that the state's method of funding schools is "broken" and that you should contact your state legislators and demand "fair," "sustainable" or "adequate" funding for public schools. It's completely understandable that school officials feel frustrated by the circumstances that force them to create their budgets before state-based revenue has been collected or approved. But is Michigan's school funding system really broken?

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Before you decide whether or not you agree with your local school officials, here are some questions you might want to ask them first:

  • What is district enrollment this year compared to the last five years, and what did your district predict enrollment would be?

The answer to this question says a lot about why your district has less money and how well your budget team plans ahead. State aid goes to schools on a per-pupil basis. Fewer students mean less money. In many districts declining enrollment is a significant part of decreasing revenue. Your administrative team should be planning ahead on enrollment, asking not only how it will adjust financially, but how to operate with fewer students.

  • What are the utilization rates of the district's school buildings?

Most parents don't want to see their kids' school closed. But if district schools are running at low capacity — and many in Michigan are — then your tax dollars are going to maintain space that isn't being used. Does your district have a plan to consolidate buildings and downsize if necessary?

  • Has your district gone out for bids on non-educational services, like custodial work, food services, transportation and employee health insurance?

The evidence suggests that privatizing support services and bidding out employee health insurance can save money. At a minimum, your district should have done some comparison shopping by now. If it hasn't, or if it isn't willing to show you the results and defend its current choices, then you shouldn't buy into the "state budget cuts" argument.

District-provided employee health insurance is a major contributor to rising school costs and your district should be feverishly looking for ways to control this expense.

  • Is your school district sharing business, administrative and educational services with other districts or local government?

Fewer students and more technology make it reasonable and possible to consolidate programs and services in some cases, up to and including the school superintendent.

  • How much does your district spend on wages and benefits — and are those costs open for discussion?

Wages and benefits typically make up 80 percent or more of school district spending, and those costs are not going down.

Even if your district has announced a "salary freeze," that doesn't necessarily mean employee compensation costs are under control. What it usually means is that the salary range itself is temporarily "frozen," but that teachers still receive "step" increases for moving up the salary scale due to added years of service or for earning a master's or doctoral degree.

Salary levels and benefits are negotiated between school districts and their employee unions, and the district is bound to pay those wages and provide those benefits unless the union and school board agree to re-open the contract to discuss changes.

This leaves school boards with few options when it comes to reducing labor costs: They can go the negotiation table with union representatives for what will almost surely turn out to be a long, tedious process, or they can cut programs and staff. Facing these choices, school boards overwhelmingly choose the latter. This contributes directly to increased class size and layoffs.

Retirement costs are going up, too. School districts are paying an amount equal to nearly 17 percent of payroll this year for health and pension benefits for retired school personnel. The state Legislature sets this mandated amount.

  • Finally, what is your district doing today to get ready for 2011 and beyond?

Michigan's public school system can't — and shouldn't — be sheltered from the state's receding economy, especially a shelter built with higher taxes on individuals and businesses. It's likely that enrollment in many districts will continue to drop, as will state and local tax revenue. Districts should draw up plans now to share personnel and programs with neighboring districts, investigate online education, seek competitive bids for non-classroom work and for employee health insurance, and, probably most importantly, should not sign employee contracts beyond the district's ability to pay.


Lorie Shane is managing editor of Michigan Education Report, which is published by 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.