The Christmas Eve Hijacking

Last summer, the Michigan Legislature stripped away property tax funding for public schools and inaugurated a great debate about the kind of educational system we should have and how it should be funded.

In early October, Governor John Engler weighed in with a package of quality reforms that promised to revolutionize the schools. His proposals would have injected a great measure of choice, competition and accountability into a failing monopoly, empowered teachers and entrepreneurs to usher promising innovations into the educational process, encouraged containment of runaway costs, and delivered a small net tax cut to the citizens of this state.

As late in the debate as early December, school reformers still had reason to be optimistic about what this unique opportunity for change might bring. But when Michiganians awoke on Christmas morning they discovered that Michigan's "education revolution" had been hijacked. The Legislature flunked the test. Sweeping school reform, so desperately needed by the children of this state, must await another day.

The compromise finance package worked out in the final hours before Christmas contains a March 15 ballot proposal and a statutory plan that will take effect if voters reject the ballot question. The fact that Michiganians have a degree of "choice" in the matter is little consolation in the face of this fact: If each plan could be judged on its own merits in isolation from the other, neither would earn a passing grade.

On the "plus" side, the ballot proposal puts an emphasis on taxing consumption, rather than work, savings and investment, because it hikes the sales tax, cuts the income tax and keeps the Single Business Tax (SBT) at its current 2.35 percent. That's preferable to the statutory plan's emphasis on boosting both the income tax and the SBT, which would send a powerful signal to entrepreneurs that Michigan is not a friendly place to be productive. Property taxes, for most Michiganians, go down under both plans.

Both plans require school districts to pay retirement costs and Social Security taxes out of the state's guaranteed per pupil "foundation grant," which starts at $4,200. The State now picks up both, at a cost of almost $900 million. The new policy would encourage districts to be more cost-conscious at the bargaining table.

On balance, the ballot proposal would appear less unpalatable, but mainly because the alternative seems even more so. The question Michiganians need to ask is, "What are we getting for our time, trouble, and money, whichever plan ultimately takes effect?"

That's where the rubber hits the road:

Charter schools-new public schools that can be created by universities, community colleges and certain other public entities-are now authorized, but under conditions much more restrictive than what the Governor initially proposed. Cross-district school choice was completely dropped. Almost no incentives for the schools to spend public money more wisely were passed, even though it is known that substantial savings can be delivered through more competitive bidding of teacher health insurance, food services, transportation, and custodial services. Reforms of teacher tenure and certification were minimal and confined to the new charter schools.

Incredibly, schools came through the debate with about a 9 percent increase in total funding-in spite of an endless stream of studies nationwide that show no positive correlation between spending and student performance in public education. For this reason, Michigan will not get a much-needed net tax cut under either plan.

Furthermore, schools under both plans will be largely freed of millage elections, meaning that the voters' one best way to hold schools accountable has been nearly swept away. That might be tolerable if the foundation grant were to go directly to the parents, who in turn could shop for the school of their choice. But the grant goes to school districts and their administrative bureaucracies, not to parents. And without enhanced choice, most parents will be stuck with the schools to which they are assigned by geography-schools whose administrators now won't have to ask voters for periodic funding renewals. Are the few quality measures gained in this whole debate really worth the loss of local control implicit in a further centralization of school funding at the state level?

The Legislature's work is also top-heavy with new mandates from Lansing. One calls for schools to add more hours of instruction per day or more days in the school year. In the absence of the kind of reforms that would spur excellence, such a mandate is reminiscent of the old canard, "We're losing on every unit we sell, but somehow we'll make it up in volume."

The status quo in Michigan education has emerged in Lansing relatively undisturbed. That will probably please the Michigan Education Association, which fought hard to keep its power and purse intact, but it ought to infuriate parents, taxpayers, teachers and children who had hoped for so much more.

The German leader Otto von Bismarck once said that there were two things people should never see being made: laws and sausage. In light of the way Lansing handled school reform, that comment does a disservice to sausage.