Contents of this issue:
  • Families may not see tuition tax rebate

  • State officials outline plan to repair schools statewide

  • COMMENTARY: Teacher pay policy should be based on performance

  • D.C. government contracts with firms to set up "voucher lottery."

  • Private school students may lose state scholarships

  • District opens 2,000 school choice slots

LANSING, Mich. — As part of an effort to reduce Michigan's budget deficit, state officials may reduce or eliminate a tax rebate normally distributed to families paying college tuition.

The $375 rebate was instituted in 1995 to encourage students to attend schools that restrain tuition increases to levels at or below the rate of inflation. Parents paying tuition and taxes in Michigan are eligible for the rebate if their child attends a school that minimizes tuition increases. However, Gov. Jennifer Granholm and several legislators are considering canceling the rebate to help ease a nearly $1 billion shortfall in state budgets; the rebate program costs the state over $42 million annually.

Officials from the governor's office said they haven't decided whether to cancel the program. "We are in discussions with legislators and universities as to what the best situation would be for all in terms of keeping tuition affordable and accessible," Greg Bird, spokesman for the state budget office, told Booth Newspapers.

Booth Newspapers, "Tuition tax credit hangs in budget-deal balance," Apr. 5, 2004 1080904201147230.xml

LANSING, Mich. — The Michigan Board of Education announced last week plans for an inquiry into how much it would cost to institute a large-scale project to repair schools around the state.

The research, being completed by several research institutes throughout Michigan, will help officials determine the best programs for repairing many dilapidated schools. The plan comes on the heels of the 10-year anniversary of Proposal A, which replaced state funding for some school functions with money from an increase in the state sales tax.

Many districts are levying new millages to finance repair and building projects. "We see this as an urgent requirement of public education, while still recognizing the fiscal constraints facing the state and its taxpayers," state board President Kathleen Straus commented.

Jackson Citizen Patriot, "Officials welcome state push to repair schools," Apr. 2, 2004 108092398450780.xml?jacitpat?NEJ

Mackinac Center for Public Policy, "The Six Habits of Fiscally Responsible Public School Districts," Dec. 3, 2002

Mackinac Center for Public Policy, "Better Debt Policy Can Help Earn Voters' Trust," Nov. 1998

Mackinac Center for Public Policy, "The Need for Debt Policy in Michigan Public Schools," Jan. 1998

Mackinac Center for Public Policy, "Before Cutting Services or Delaying Tax Cuts...," May 17, 2002

Viewpoint on Public Issues, "Michigan's Prevailing Wage Law Forces Schools to Waste Money," Nov. 9, 2001

WASHINGTON, D.C. — A commentary published in a national policy journal this month dispels the common misconception that teachers are poorly paid, and suggests that incentive-based reforms in teacher pay policy would not only attract higher quality educators, but would also provide an incentive for better performance, and clear classrooms of mediocre teachers.

On average, teachers are not underpaid, wrote author Frederick Hess for the Hoover Institution's Washington, D.C.-based "Policy Review." But good and outstanding teachers are not rewarded for their efforts — the current system "serves to dissuade talented candidates while rewarding and insulating ineffective teachers," Hess wrote.

"The steps that need to be taken are straightforward," Hess wrote. "Teachers' compensation should be based on performance rather than simply on experience and credentials." He quotes Russell Miller, of Mercer Human Resource Consulting, an international human resources consulting firm, who said that when organizations fail to reward excellence, "The biggest risk is mediocrity. Your stars are going to look elsewhere, and your average and below-average employees will say 'I'm going to stick around.'"

Policy Review, "Teacher Quality, Teacher Pay," April 2004

Michigan Education Report, "Increase teachers' pay the right way," Early Fall 2000

Michigan Education Report, "Teacher Pay and Teacher Quality: How Do They Relate?" Spring 1999

WASHINGTON, D.C. — The U.S. Department of Education announced last week it awarded a contract to a research firm to help develop a lottery system for awarding vouchers to Washington, D.C. students enrolled in the district's new school voucher program.

The program, which will cost $70 million over the next five years, provides low-income families with voucher scholarships worth up to $7,500 per year to attend the school of their choice, public or private.

Westat, the contract winner, and Chesapeake Research Associates will be working with the Georgetown Public Policy Institute to develop the most fair, random system for distributing the limited number of scholarships to the most people as possible. "We are excited about the challenge," Stephen Q. Cornman, administrator of the Georgetown project, told the Washington Times. "This sets the foundation for the initial evaluation program."

Washington Times, "Firms to create voucher lottery," Mar. 30, 2004

Mackinac Center for Public Policy, "Friedman Says Vouchers and Tax Credits Useful Route to Greater School Choice," March 19, 2002

Mackinac Center for Public Policy, "The Case for Choice in Schooling: Restoring Parental Control of Education," Jan. 29, 2001

LANSING, Mich. — Legislators in Lansing are considering a new plan to reroute funds earmarked for the Michigan Tuition Grant scholarship program to patch up budget problems at the state's universities.

Gov. Jennifer Granholm has worked to reduce the scholarship amount in the past, lowering the total per student from $2,700 to $2,000. Although some students rely on the scholarships to avoid loans, the government's program is out of place in the current negative economic climate according to Joe Lehman, executive vice president for the Mackinac Center for Public Policy. "Should a state that already runs a constellation of four-year universities also be in the business of providing subsidies for people to attend private universities?" he asked the Jackson Citizen Patriot.

Legislators who support the current program say college students at private schools who would otherwise struggle to make tuition payments benefit from the scholarships.

Jackson Citizen Patriot, "Public vs. Private," Apr. 4, 2004 1078159222123650.xml

Mackinac Center for Public Policy, "Michigan Can't Afford Tuition Grant Program," March 10, 2004

GRAND RAPIDS, Mich. — School districts in Kent County are opening a total of 2,000 schools-of-choice slots this coming fall, marking a county record.

The slots, 650 of which are new this year, will help the districts attract students and help alleviate financial shortfalls. "Our goal is to stop the bleeding, and we've been doing a lot of things to that end," Grand Rapids Superintendent Bert Bleke told the Grand Rapids Press.

State law allows districts to limit the number of students joining from other municipalities, but cannot stop a student from leaving. By filling schools-of-choice slots, districts can gain a minimum of $6,700 for each pupil added; Rockford hopes to gain $1.3 million if its choice slots are filled this fall.

Grand Rapids Press, "Kent schools open 2,000 'choice' slots," Apr. 1, 2004 1080835409142430.xml

Mackinac Center for Public Policy, "The Impact of Limited School Choice on Public School Districts," July 2000

Mackinac Center for Public Policy, "The Case for Choice in Schooling: Restoring Parental Control of Education," January 2001

Mackinac Center for Public Policy, "Educational Choice for Michigan," September 1991

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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