Campaigning for governor in 2010 as Michigan was clawing its way back from the abyss of the Great Recession, Rick Snyder created a huge sense of urgency for business tax reform as a way to revive the state’s failing economy.
Just 143 days into Snyder’s tenure as governor, longtime Lansing observer Peter Luke wrote the following for Bridge Magazine:
Gov. Rick Snyder signed the biggest tax overhaul in Michigan in 17 years that finances the elimination of the Michigan business tax with a bundle of changes to the personal income tax.
Overall, it amounts to a $220 million net cut in tax revenues to state coffers, but for Michigan businesses, including some 100,000 that no longer will have to pay the repealed Michigan Business Tax, it’s a $1.65 billion cut.
The difference is being made up with $1.42 billion in additional income taxes, which includes applying the tax to pensions and other retirement income.
“Something fundamentally had to happen to make us a great state again,” Snyder said before signing House Bill 4361 into law as Republican lawmakers looked on.
Snyder did so after adopting wholecloth the Business Leaders For Michigan mantra that it was essential we take bold and decisive action to make Michigan a Top 10 economic powerhouse once again.
Today the governor, along with State Superintendent Brian Whiston and education advocacy group The Education Trust-Midwest, all have their own plans to make Michigan a top 10 state in education. The governor has empaneled a 21st Century Bipartisan Commission on Education to study the issue and make recommendations.
Does anybody really believe the governor’s proposal for education will reflect the same sense of urgency with which he addressed the Michigan Business Tax? I suspect not.
There are myriad reasons for the education reform malaise, even as Michigan continues to plummet in student performance among the states, much as its per capita income ranking fell from 1994 through 2014.
One reason may be that few see the crisis. Parents are still likely to grade their school as an A or a B even as they grade the institution of public education as a C or a D.
A better reason may be the lack of consensus on a cure. Voters and legislators are almost always in alignment on fiscal crises but there is often wide disparity on policy solutions. The education crisis that prompted the Legislature to act in concert with voter concerns, as it did for Governor Snyder in 2011, was the property tax revolt of the late ‘80s and early ‘90s. That resulted in Proposal A, a dramatic redistribution of tax burden from property taxes to sales taxes to finance public education.
There is no such policy consensus for improving academic performance as evidenced by the recent debate over the Detroit Public Schools. While the system’s debt riveted the attention of Snyder and legislators, it was the difference of opinion over a policy decision — a proposed oversight body to govern charter school openings and placement — that stalled the bailout until community leaders abandoned their hopes of a coordinating commission for fear of a total loss through bankruptcy.
Absent agreement on crisis or cure, I’ve something of a counterintuitive recommendation for reform. Follow the lead of Congress. Restore local control. Faced with a failed national policy demanding 100 percent student proficiency in 2014, and with the U.S. Education Department issuing waivers to virtually every state in the union, Congress in December 2015 punted the problem back to the states with the Every Student Succeeds Act.
Michigan and all other states are now struggling to rewrite their own assessment and accountability plans. The vision of a showdown between the Legislature and the State Board of Education already looms as those who don’t want to retreat on the No Child Left Behind standards-based accountability movement are lining up against the school community’s preferred model of growth measurement as opposed to high-stakes testing.
So too do we have a wide division between the Legislature and the school community on funding. Educators believe we’ve too little; legislators believe we certainly have enough despite a recent finance study indicating most schools should receive about $1,200 more per pupil and those students at greatest risk, or those who are English-language learners, should receive 30 to 40 percent more.
Why shouldn’t our new state accountability plan mirror the third-grade reading bill the Legislature recently sent to the governor? It places a great deal of focus on early literacy, sets a standard to be met by educators, and recommends strategies for improvement and discussion between parents and teachers. This is far better policy than that proposed in the original draft, which had Lansing telling parents, third-grade teachers and elementary principals whom to pass on to fourth grade and whom to hold back.
State government should set standards and allow local boards of education, parents and the business community that elects them to determine how to meet those standards. The consequences of failing to meet those standards should be clear, and they should be enforced.
So, too, should our state return to local communities the opportunity to increase their contribution to school operating budgets. The current formula — in the opinion of the Legislature’s own study — fails to adequately fund schools at the base foundation grant and marginalizes those at the top by giving those districts just half the annual increase received by those at the bottom. If annual school spending increases matched or exceeded the rate of inflation for all schools, that may be an acceptable funding policy. But that’s not the case. The House Fiscal Agency reports the high water mark for school funding was sometime just before the year 2000. Today’s inflation-adjusted school revenues buy 6 percent fewer goods, services, salaries and benefits than they did in 2000.
Giving individual communities the opportunity to adequately fund their schools by contributing more from local taxpayers needn’t negate equity or return Michigan to the vast differences in funding before Proposal A. Maintaining equity could be managed through an equalization factor applied to state funding which would not allow a gap any greater between high- and low-funded districts than, say, 25 percent. If we were really serious about equity, we’d do the same thing for school bond levies by equalizing to the statewide average the amount of money raised by 1 mill for those districts in struggling communities with extremely low property values.
Our communities have demonstrated their commitment to education through their contributions to the construction of buildings. Let’s reinforce that commitment with a return to local control where it counts, making them complete partners in the operation of those buildings and the performance of the people they hire and the students they serve.
If there’s a crisis worthy of dramatic response, it’s more likely to come from the parents of children in their neighborhood schools than it isfrom legislators and lobbyists.
