Proposal A still hotly debated

Reform hurts some, helps others Thanks to Michigan's school-tax reform of 1994, the once-poor Maple Valley Public Schools has added computer labs, advanced placement courses, and more art, music and foreign language classes. But the landmark change has left wealthier school districts such as Waverly, Okemos and East Lansing struggling in the wobbly economy, with some systems laying off staff, cutting educational programs and even closing schools. Today, on the 10-year anniversary of Proposal A, it's clear the reform has substantially reduced the gap between rich and poor school districts. But debate continues over its success in adequately funding all school systems. "Proposal A has been wonderful for us. We've been able to do so much more for our students that we never could have thought of doing before," said Clark Volz, superintendent of rural Maple Valley, which used to be the area's lowest-spending district. "Proposal A gives equal opportunity to all the children to receive a good quality education." Meanwhile, many school districts are requiring students to pay to play on sports teams and asking parents to underwrite field trips and other extras. Some have pink-slipped teachers and support staff and drained cash reserves to keep the books balanced. "When Proposal A was enacted, there was no plan B for an economic downturn," said Edith Suttles, president of the Waverly Board of Education, which has cut $2.1 million in the past two years. "I'm sure Proposal A has helped taxpayers, but it has not helped the financial stability of our school district." Proposal A was one of the most profound changes in public policy in state history. It came at a time when high property taxes were forcing senior citizens out of their homes and some schools were struggling to keep their doors open. Maple Valley schools, about 30 miles southwest of Lansing, were operating on a bare-bones budget with barely enough cash in reserves to cover payroll. In 1993, the Kalkaska School District in northern Michigan personified the school finance crisis when it ran out of money and officials ended the school year 10 weeks early. And the wide gap between rich and poor school districts prompted talk of a lawsuit potentially resulting in a court-ordered financial overhaul. Lawmakers and then-Gov. John Engler decided to eliminate school property taxes in July 1993 and spent the next several months figuring out how to pay for school operations. They finally came up with the solution in a marathon session that ended on Christmas Eve. The end result was a mostly state-financed plan that switched funding from local property taxes to a higher statewide sales tax and guaranteed all schools a minimum payment. This year's floor is $6,700 per pupil, but it has essentially been cut by $74. Funding gap remains The richest school districts continue to get far more than that, although their annual increases have been relatively modest. Per-pupil funding in the tony Bloomfield Hills schools has gone up only 15 percent since Proposal A. Nonetheless it gets nearly $12,000 per -pupil. Gov. Jennifer Granholm believes the gap still is too large. Last year she wanted to do away with $55 million in funding for the higher spending districts but couldn't get lawmakers to go along. Former state Rep. Lynn Jondahl, an Okemos Democrat who played a key role in crafting the new school finance system, said Proposal A achieved its goal of narrowing the gap. "It was fashioned to bring up the low-spending districts without providing heavy penalties on the high-spending districts," Jondahl said. "We did not anticipate that the gap would ever be (completely) closed." In her fiscal 2005 budget, Gran-holm has proposed taking some of the state money from the very wealthiest school districts but will encounter hurdles with the chairs of the House and Senate appropriations committees, both representing Oakland County, home to some of the richest districts. How much is enough? Debate continues over whether the $11.2 billion in state aid is adequate to fund the school system for 1.7 million children. While state spending for schools grew by 42 percent between fiscal 1995 and fiscal 2002, it has fallen slightly in the past two years. School districts with declining enrollments face extra pressures because fewer students mean less state funding. That's been a huge problem for the 17,000-student Lansing School District, which lost 3,472 students since the 1993-94 academic year. The opening of charter schools and a law allowing students to transfer into other districts under the schools-of-choice option is to blame for much of the decline, district spokesman Mark Mayes said. "It makes it extremely challenging for urban districts to stabilize their enrollment," Mayes said. "If you're able to keep enrollment stable or increasing, then Proposal A won't hurt as much. "But for us, it hurts." Guillermo Lopez, a member of the Lansing school board, said Proposal A has failed urban schools such as Lansing's by not helping to fund infrastructure upgrades. That leaves districts to seek millage increases from voters as Lansing did in November, when city voters approved a $67.5 million bond to pay for a new school and renovations to seven of the district's 40 schools. A call for accountability But economist Patrick Anderson of the Anderson Economic Group said he considers Proposal A a big success, providing adequate funding for all schools. "The promise of Proposal A has been more than fulfilled by the taxpayers," Anderson said. "There's no longer monetary excuses for poor school performance." Lu Battaglieri, president of the Michigan Education Association, said Proposal A helped low-spending schools. But he said about one-third of school districts have received less than inflationary increases since Proposal A was enacted. Now schools are facing the pressure of higher pension costs because of poor investment performance in recent years. "What Proposal A really has done is slow the growth of money available to public schools," he said. "It created a mismatch between the revenue the state has provided and the costs that we're facing." Michigan voters are widely divided on the question, according to a new public opinion survey undertaken by Michigan State University's Institute for Public Policy and Social Research. Forty-three percent of those polled said $6,700 per pupil is too low, while 47 percent said it was about right. Only 10 percent said it was too much. "A large percentage are satisfied," said Doug Roberts, interim director of the institute. "A significant number would say more is needed." Contact Chris Andrews at 377-1054 or candrews@lsj.com. Contact Stacey Range at 377-1157 or srange@lsj.com.

By Chris Andrews and Stacey Range - Lansing State Journal