Michigan governor, Senate fight over more school cuts

10/22/2009

LANSING, Mich. — Michigan's Democratic governor and the Republican Senate majority leader are clashing again, this time over whether more cuts to public schools are needed to balance the budget.

Granholm vetoed $51 million in funding for some of the state's wealthiest districts on Monday, and Senate Majority Leader Mike Bishop has accused her of trying to force lawmakers to come up with more money for schools — something he says isn't needed.

The rhetoric heated up further on Thursday, after the director of the nonpartisan Senate Fiscal Agency sent a memo to senators saying the public schools budget is balanced without the veto.

Gary Olson said the budget must be based on figures from a May revenue-estimating conference, and under that scenario, anticipated revenues will cover spending — even if the Democratic-led House doesn't pass $100 million in additional revenue that House and Senate leaders have agreed is needed.

Olson told Senate Republicans on Thursday that the state might not even need to make further cuts to school funding when economists hold their next revenue-estimating conference in January, because the drop being seen now could right itself by then.

"We do not know accurately whether things are going to go up, or going to go down," Bishop's spokesman Matt Marsden said after the meeting. "We should wait until January."

Granholm's spokeswoman Liz Boyd responded that state Treasurer Robert Kleine warned last week that school aid revenues are dropping below the May estimates, leaving the schools budget potentially $264 million in the red if the extra $100 million isn't raised.

"The fundamental question for us is, do we have a revenue problem with schools, and if we do, are we obligated to act on it?" Boyd said. "The governor has said if we need take further steps to balance the budget, we will."

State budget director Bob Emerson said this week that school aid payments may need to be reduced by $120 per pupil on top of the equivalent of $165 per student already cut.

School districts already are reeling under the first round of cuts, which came as they were a third of the way into their school budget year. Officials have said even those cuts will lead to layoffs, crowded classrooms and fewer preschool programs.

Feeling the brunt even more are 39 school districts that get more than the minimum per-student payment from the state, since Granholm vetoed much of their extra revenue. Livonia Public Schools, which is taking the largest hit, is losing $316 per student on top of the cuts all schools are taking.

Granholm wants to raise taxes and fees so more money can be spent on public education, a college scholarship program that has been eliminated, health care and local police and fire protection. So far Senate Republicans have rebuffed her plans, noting that a $2.8 billion deficit needed to be addressed with deep cuts, not higher taxes.

The state already is relying on $450 million in federal stimulus money to balance the public schools budget for the fiscal year that started Oct. 1. Without that, every school district could have been looking at a cut that was the equivalent of $450 per student.

But the state will have only about $250 million of those and other funds to carry over to next year. That could leave it with a shortfall next school year, and is one reason some school advocates are calling for a new tax structure that will provide more money for schools.

The law requires the governor to make across-the-board cuts to education funding if needed to keep the schools budget balanced. But past cuts generally have come after a regularly scheduled revenue-estimating conference.

If Granholm decides to cut funds further at this point, it will make a mockery of the budgeting process, Marsden said, and let "anybody at any time along the way ... change the number to suit their own needs."