Michigan Schools:
The state takes more than it gives

May 3, 2004

The State of Michigan will be taking more away from its school districts next year than the increase it promised to give.

Last year, Governor Jennifer Granholm cut $74 per student from the state payments to school districts. Early this year, she promised to restore that money.

But the state then took BACK another $108 per student, leaving school districts $34 per student in the hole.

The state says that the money they're taking from the districts is going into the Michigan Public School Employees Retirement System. It comes out to between $500,000 for smaller districts to almost three million dollars for larger ones.

Until 1994, the state paid the districts' share of the pension costs. Proposal A, passed that year, was supposed to shift the funding of schools from the district level to the state. But a hidden part of that law shifted the burden of pension costs from the state to the school districts.

The increases in what each school system will pay next year weren't caused by school employees getting bigger pension payments. Pensions are not going up at all. Basically, the state claims to have lost money from the pension fund in the stock market.

They claim that this is just a temporary problem, created by the stock market. If so, the state is perfectly capable of bailing out the school districts by paying this cost itself. It bails out corporations all the time, for much more money than this would cost it.

In fact, it's perfectly possible for this Democrat governor to get around the trick played when Proposal A passed under Governor Engler, a Republican, and shift the pension payments back to the state. The per-student payments to the districts are set by the state. The governor could raise those payments by much more than a measly $74.

If Granholm wanted to, that is.

Instead, the state is coming back to the districts to have them foot the bill for its losses. And now that the state has come back to the districts for more and more, the districts AND the state are coming after the school employees.

This comes at a time when many school district budgets are already millions of dollars in deficit. Some districts are laying off a number of teachers and other employees; others are almost completely shutting down. There's been talk about raising the minimum number of years for full retirement from 30 to 35.

Proposal A is turning out to be just another way to take from the working people of the state, to put it into the pockets of the banks and stock brokerage firms. The Republican Governor Engler started it in 1994, and the Democrat Governor Granholm continues it today.