Posted on 23 June 2011.
With Rep. Peter MacGregor, 73rd District
I am pleased to announce that the 2011-2012 budget passed before Governor Snyder’s May 31 deadline. We set an ambitious goal to pass the budget early so that schools and local governments could plan for next year without any guess work. The resulting budget is fiscally responsible and structurally sound. This has not been achieved since the Reagan administration.
I want to address K-12 education because I know how important it is to our local school districts. The final agreement distributes $150 million to schools that show “best practices” and $160 million to pay down pension obligations. This restores approximately $200 per pupil from the Governor’s original $300 cut.
These “best practices” include the 1) district paying at least 90 percent of employee health care contributions, 2) the district being the health insurance policy holder, 3) bidding out non-instructional services (the district doesn’t need to necessarily take the bid), 4) creating a performance-based dashboard for parents and 5) service-based consolidation sharing. These are all potential cost saving measures for school districts and therefore can be applied for every district. If a district meets four of the five “best practices”, they will receive an additional $100 per pupil. I am confident that the schools in the 73rd district can, and will, fulfill these “best practices” and therefore qualify for the additional $100 in per pupil funding.
The agreement also provides $160 million to help districts pay for future retirement costs. I wholeheartedly believe that this is the right thing to do because we are applying funds to address long-term debt that cripples school districts. It is no secret that Michigan has pension liabilities it must address ($27 billion in pensions liabilities alone). This funding supports our retired teachers who contributed so much to Michigan’s future. We must ensure that money is in the pension system when our current teachers are ready to retire. It is estimated that paying down this obligation will save school districts approximately $100 per pupil.
The smaller, remaining portion of funds from the revenue estimating conference is being applied to address future needs. Over the last decade, we have reacted to the economy instead of planning for it. The Budget Stabilization Fund (“rainy day fund”) is designed to help offset budget difficulties during economic downturns. In 2001, Michigan had nearly a billion dollars in that fund. Currently, the fund has a balance of $2.5 million. We are now placing $256 million back into that fund so that we can fund education, public safety and other critical departments in times of serious economic need. These dollars meet our present needs while planning for the future.
I also understand many of your frustrations, one being the transfer of money from the School Aid Fund (SAF) to Higher Education. I do not support this, but I worked with leadership to get $50 million restored into the School Aid Fund in the House version and was assured that more was on its way after the revenue estimating conference, which they have done by giving us back the $330 million in the areas mentioned above. If a school district meets the criteria for the additional funding I stated above, the overall cut in education will only be an average of 1.4 percent. If they do not meet either of the criteria, the cut will be 4.1 percent. I understand that funding for our children is critical but I am confident that our schools will continue to thrive because of how much our community values education. As I look at the funding around the state, one thing is clear: funding is not nearly as important as quality teachers, loving families and passionate communities. We can fund many schools to the gills but students succeed because they come home to a loving family that supports their education. That being said, I take the cuts very seriously and understand your frustrations.
The federal stimulus money over the past three years ($900 million for education), which came with much hope and hullabaloo, created as many challenges for our state as it solved. Please keep in mind that from 2004 to 2010 the state has added over $8 billion in spending to a collapsing and shrinking economy. State spending needs right-sizing, because it is not sustainable.
Overall, I am pleased with the budget. Despite our original shortfall, and the elimination of federal stimulus money, we were able to address long term debt that has long been ignored. It’s easy to spend all of the available money, but we must think of our children five, ten or twenty years from now and the Michigan they will inherit. As we move forward, please keep in mind that I am one of 148 legislators. I am committed to continuing the fight for our public schools, keeping in mind that I have a responsibility as your legislator to balance the budget and ensure other core functions of state government such as public safety, roads and caring for the vulnerable are protected as well. Although I am anxious to find inefficiencies in government, cutting vital programs is NOT something I enjoy. However, the state’s ability to pay is limited. We cannot settle for the status quo and my decision-making will always prioritize long term solutions rather than Band-Aid fixes. We are laying the foundation for a long-term economic recovery and job creation for Michigan.