By John Foren
In school finance terms in Michigan, “Kalkaska” is the nuclear option.
The question is: How many school districts are ready to push the button?
“Kalkaska” is when districts do the unthinkable and throw up their hands over money problems and shut their doors, putting the “Closed for summer” sign up early. After numerous failed millage attempts, the Kalkaska School District famously took that tact in 1993, helping lead to the statewide Proposal A school overhaul plan the following year.
With declining enrollment, a mid-year cut in school aid and a further slice projected next year, educators and funding experts say there could be a lot of Kalkaskas in Michigan unless there’s a wholesale change in how we fund education.
“I think that’s exactly what the train wreck is heading for,” said Jeffry Morgan, superintendent of the Kearsley Community Schools near Flint. “Unless the fundamental structure of how public schools are funded changes, I just don’t see a lot of districts surviving in two years.”
And Morgan speaks from a position of relative strength. His 3,400-student district has a fund balance of about $4 million, though it has taken layoffs, consolidations, and a switch in employee health care to maintain it.
There were 21 districts in deficit at the end of the 2007-08 school year; by some accounts, that’s now at 30, with dozens more with dangerously low fund balances.
And some wonder where that number will stand after the potential $268-per-student cut in aid that could happen in the next fiscal year according to Senate Fiscal Agency projections.
Early Closing Considered
Mark Titus, a member of the Clintondale Board of Education in Macomb County, says his district broached the idea of closing in April, rather than June, ala Kalkaska, though it’s unlikely to happen.
Clintondale is a relatively small district, with 2,800 students, but has a $4.5-million deficit. That’s about 15 percent of its general fund budget.
“I believe every school district in the state will be in deficit,” Titus says. “We’ve cut everything we can. We’ve cut everything to the bone.”
After eliminating or reducing instructional aides and maintenance staff and increasing class size, Clintondale school board President Jason Davidson agrees, “We’re at the point, what else can you cut?”
And, yes, Davidson sees districts shutting their doors early, too. The problem, he says, is “the state doesn’t have the capability to take receivership of 200 or 300 school districts.”
Titus, Davidson and other grassroots people involved in the education debate reflect growing unrest with the powers-that-be in Lansing, namely the state Legislature. They contend lawmakers are dawdling while Rome – in this case, the state education system – is burning.
“They have no idea what they’re doing,” fumes Titus.
Says Davidson: “It’s frustrating watching people in Lansing collecting their paychecks and not doing their jobs.”
Calls for Action
In fact, Lansing is girding for a huge battle this year over school funding. Expect to see lots of proposals, Capitol lawn rallies, and opinion page columns on how best to overhaul the system.
One coalition, SOS Michigan (Save Our Students, Schools and State), is drafting reform plans. SOS includes school administrators, principals, business officials and numerous other groups. It’s plans include cuts to school employee benefits and retirement plans in return for tax restructuring to provide long-term funding stability for schools. (See the SOS proposal outline here.)
Business Leaders for Michigan, composed of dozens of top execs, and A Better Michigan Future (including the AFL-CIO and Michigan Education Association) already are touting broader plans to remakes state finances.
All either have endorsed, or are expected to, broadening the state sales tax to include services, on everything from haircuts to legal advice. There are varying components to the rest of their plans, such as eliminating the Michigan Business Tax or having a graduated income tax.
“People say there will be some kind of reform package that will be considered in the next few months,” said Tom White, who heads SOS. “Whether it’s a political game or a public policy game, it’s hard to say right now.”
Proposal A of 1994 de-emphasized local property taxes – trying to eliminate inequities between rich and poor communities – and instead put more onus on an increased sales tax by raising it from percent to 6 percent. Supporters say the finance plan did what it was supposed to, but sales tax funding – and thus school aid money — plummeted when the economy went in the tank.
Services are a growing part of the economy, and implementing a sales tax on them promises steady revenue, proponents say.
Battles over Taxes
There’s going to be a political war over anything that smacks of new or broader taxes, though.
“I’m not so sure there’s anyone in Lansing that’s going to vote to raise taxes,” said state Sen. Ron Jelinek, R-Three Oaks, chair of the Senate Appropriations Committee and its K-12 school aid subcommittee.
” … Do you reach deeper into people’s pockets? I don’t think that’s what people want.”
Jelinek says Proposal A should be left alone and challenges anyone to come up with a better tax structure.
“Proposal A has worked really well,” he says. “When times are good, money rolls in. When times are tough, money slows down.”
Instead, districts simply have to cut back on their expenses, namely salaries and benefits, he said. Jelinek doesn’t think schools have pushed as hard as the private sector for pay cuts from employees or less expensive health care and other benefits.
“That’s what’s happening across the state, people are having to give concessions,” he said. “It’s a matter of giving concessions or losing jobs.”
Former state Senate Majority Leader Ken Sikkema, now a senior policy fellow at Lansing’s Public Sector Consultants, doesn’t take as hard a line as Jelinek. But he agrees increased revenue for schools won’t come unless districts change their spending habits.
Sikkema – who was involved in the Proposal A negotiations in the Legislature – thinks it’s possible there will be more Kalkaskas, given the number of districts facing deficits and declining enrollment after having cut staff and programs.
“A school district in that situation is suffering from a thousand cuts, which is a little different from Kalkaska, which couldn’t get a millage passed,” he said.
But Sikkema said districts also are going to have to get much more aggressive about consolidating and merging services with other communities and cutting compensation packages for employees.
“I think it’s very, very naïve, politically naïve, for people to say if we just have a school district close its doors, like Kalkaska, and the response from legislators and the public is, ‘Let’s put more funding in the schools.’”
Containing Costs
Consolidation historically has sounded obvious but is difficult to pull off because schools are so much part of a community’s identity. Sikkema acknowledges that but says, “I think there’s a sense among the Michigan public that schools can do a lot more on the expense side to stretch the taxpayer dollar, more than they’ve done in the past.”
Not so, says Doug Pratt, spokesman for the MEA.
Pratt says districts already have been cutting for a decade and the funding crisis isn’t about spending.
“The problem is, over the last three years school employees have given up almost $1 billion in concessions,” he says. “How much more are they supposed to give?”
Pratt says public opinion polls show taxpayers don’t want a “cuts-only solution anymore” and are tired of a “let’s take it out of the hide of school employees” attitude.
Parent Valerie Stone of Superior Township agrees she’s sick of cuts. But she also thinks consolidating with another district might be the only remedy for Willow Run Community Schools, where her three elementary-age children attend.
Willow Run, in the Ypsilanti area, faces a $5-million budget deficit and agreed in December to nearly $2 million in cuts. Those reductions drew a huge community outcry and will directly affect nearly every student; two band instructors were cut, 10 teachers were laid off and funding for many sports will be affected.
And that was just the first of two rounds of cuts in 2010, district officials said.
A Parent’s Perspective
“My fears are it’s directly affecting my kids’ education right now on a daily basis,” said Stone, president of one of Willow Run’s parent teacher organizations.
The layoffs meant her 6th grade son’s teacher was shifted to another class and her 4th grader daughter was put in a merged class filled to the brim with 36 students. Some of her children’s friends haven’t handled the changes well, Stone said.
The biggest complaint from the community is that the moves had to come in the middle of the school year, she said.
Still, she admits she doesn’t have answers, and she doesn’t seem to blame anyone in particular for what’s happening.
“What they can do about it I have no idea,” Stone said. “They are in so deep and they’re so small (Willow Run has about 2,000 students). If the money is not there, what else can the schools do but cut, cut, cut.”
Stone, a homemaker whose husband is director of an Ann Arbor finance company, has only been in Willow Run for five years and admits she doesn’t have the emotional ties some longtime residents might.
As a result, she says she’s open to Willow Run consolidating with another district and being no more. Stone sees no other option.
“Realistically, you have to do what you have to do and consolidating is probably going to be it. The longer you wait and put if off, the worse things are going to get.”
6 Comments
My Third Grad class: http://tinyurl.com/yh28hav
Count the number of kids. It stayed that way all the way from First through Eighth.
Get my drift?
The option to combine districts into county wide districts has been proposed before…is it now time to re-visit the pro’s/cons for this option. As noted in the article, there are no easy options remaining.
Mr. Perkins in 1957-58 the expectations for schools were quite different than they are now. There are so many more requirements and technological needs. We would not have a state level core curriculum that requires a different level of teacher preparation and on going training. By law we are required to provide children a free education. We must provide them with paper, pencils, crayons, musical instruments, art supplies, other consumables and textbooks. In the 50’s and 60’s children were required to provide their own supplies. Families had to pay non-refundable textbook fees that covered the costs of textbooks. The textbooks did not cost as much as $75 apiece. If a child wanted to be in the band it was required that he/she buy the instrument. If we went back to 1950’s, we would not need technology personnel and hundreds of thousands of dollars spent on technology software and hardware. We would not need all of the special education teachers and paraprofessionals because our disabled students would be housed in state hospitals, at regional training centers or not in school at all. We did not have the safety laws that govern bus transportation; kids could stand in the aisles or even in the stairwell so they could jam as many kids on a bus as possible. Gas cost $0.25 a gallon and electricity was fairly cheap.
Finally, we have learned so much more about what helps make children successful in school. So the halcyon days of the 50’s might sound good to some, but schools are not what they were, even parochial schools.
Geoff, I spent 8 years in a Catholic grade school with 40 kids in my class. The older grades in our school had so many kids they couldn’t fit in the classrooms so the solution was to have them attend for half days, with a ton of homework to do at home. There are always “solutions”. I want better for my children and my state.
Doug Pratt and the MEA are the most disingenuous group of people I have ever seen. After recieving info. from my local district and double checking info. with the Dept. of Ed. on per pupil funding, facts paint a different picture. The increases are as follows: 2005-2006 $175, 2006-2007 $210, 2007-2008 $119 2008-2009 $112. In 2009-2010 there was a $165 decrease.
The actual problem is the Mea’s policy of not negotiating any savings for the school disticts as reported in a memo sent recently to it’s members. The current system of teacher salaries, step increases, cost of living increases, health care benefits and retirement is unsustainable,broken, not to mention far superior to the benefits the private sector, the tax payers recieve. With 85-90% of funding going to pay these entitlements, and with school boards spending priorities for non-core education,no new tax payer funding should be approved until real reform is achieved. Reforms are needed on BOTH the expence and revenue side of this issue.
While Mr. Zielske is correct that some districts did get per pupil increases in those years, not all did. And, earlier than these years, there have been some “lean years” in funding increases, including years without them. “Hold Harmless” districts like mine, Bloomfield Hills, has over the life of Proposal A, had well below the CPI in funding while many districts have had above the CPI. We are currently $2300 below our per pupil spending pre-Proposal A (1994). Also, BHS gets $4000 of it’s per pupil funding directly from our tax payers, not the state. Part of the problem with the per pupil increases in the past is that they’ve been eaten up by health care and retirement costs which are growing much faster than the CPI. Yes, these need to be brought under control, and the SOS organization that is advocating for school funding reform is including further sacrifice from school employees in the area of benefits. But it is true that many districts have been cutting, cutting, cutting. Districts that lose students, which is almost every district in the state right now, are hard hit under the Proposal A formula. And, one message that does not seem to get out is that we ARE consolidating services, consolidating schools, outsourcing services, and signing concessionary contracts with our employees. Our non-instructional folks took a huge hit in pay this past year – 25% for our custodial services and 18% for bus drivers. And, while they have better bennies than the private outsourcing companies give, I would hardly call them generous. On a go-forward basis, we no longer offer health insurance for family members of non-instructional service employees; only the employee. Yes, some smaller districts need to merge and be more efficient. But each situation needs to be taken individually; there are rural districts in which further consolidation makes no sense because of geography. There is also indication that once a district reaches 15,000 students, there is not cost savings to be had. In fact, there could be dis-economies of scale should districts get too large. Schools are labor-intensive businesses. Also, the way Proposal A and our state taxes are structured, they are not aligned with where future economic growth is going to be. Too often all districts are painted with the same brushstroke, and too many one-size-fits-all solutions. We need fewer rules and regulations from the state and less infringement on local control, and more stable funding. BHS produces outstanding results, and it ranges from outstanding teachers, huge parent support, and yes, more financial resources. But even I question how long we can continue with the projected deficits we face, and I do not think the kinds of salary cuts for teachers that we face without structural tax reform are in the long-term interest of public education in this state. The countries that have oustanding public education pay their teachers better wages than in the US. We cannot cut our way to excellence.
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