Thursday, December 10, 2009

$127 Per Pupil Cut Paused - For Now

This is good news, but don't think for a second that the school funding problem is solved. From the state release:
Governor Jennifer M. Granholm today announced that the $127 per-pupil reduction in school aid payments to school districts is being paused. The decision is due to school districts spending less than authorized in 2009 and because of an unexpected increase in non-homestead property tax values. A formal letter from Budget Director Bob Emerson advising lawmakers of the pause in the reduction was sent to the chairs of the Senate and House Appropriations Committees today.

School districts cut programs, saving the state $50 million in matching funds. And while the increased property revenue might be a good economic sign (edit update 6:31PM: er, no, it was because a lot of businesses changed hands), there are still miles to go before we are out of the woods.

Granholm emphasized that while today’s announcement is likely to be welcomed by teachers, parents and students across the state, it does not affect the $165 per-pupil cut contained in the 2010 budget or the potential for a multi-million dollar shortfall in the 2011 school year.

“The crisis of how we fund public education is real,” Granholm said. “While the hard work of school officials across the state to cut their budgets has resulted in a larger than expected carryforward from the last fiscal year, we must continue to find a way to ensure stable and adequate funding for public education next year and beyond.”

That will be the next trick, and as it stands, our Legislature is not up to the task. Face it folks, as long as Mike Bishop runs the Senate, there will be no compromise on revenues. Case in point was their behavior yesterday, which is all too predictable by now. Seems there was a bit of a squabble about school funding on the House floor; Speaker Dillon finally stood up and called out the Senate proposal for the budget-busting monstrosity that it is (only two months late, but better than never, I guess). Bishop's reaction to the problem? Sending a nasty letter to the governor that basically said "you and the Speaker better do what I want", as the Senate Republicans still insist on playing "my way or the highway" politics on the whole thing.

Nothing will ever get solved if all Bishop and the Republicans can say is "no". While I give the Speaker credit for finally saying something, it came way too late for this year - and we will see if he and the Democrats decide they want to stand up for the schools (and other things) next year. Parents, school officials, better get the language ready for a ballot proposal, just in case it is needed.

This lets lawmakers off the hook for now, but the bigger battle still looms on the horizon. We will see what the January numbers bring. You may not believe this, but economic indicators in this state are showing signs of recovery. We leveled off in October, but that was after four straight months of the Comerica Michigan Economic Activity Index picking up steam, mostly due to Cash For Clunkers - but there are other areas showing signs of life as well.

“After surging in September, auto production also declined moderately in October. However, in contrast to the declines in auto sales and production, the other components of our index continued to show broad-based strengthening in the Michigan economy. As the national recovery accelerates in the months ahead, our index likely will trend higher, signaling the emergence of a moderate recovery in Michigan in 2010.”

If that is the case, our state revenues should reflect it, maybe save us from complete and total destruction. Keep your fingers crossed that this recovery keeps up.

We just might survive Mike Bishop yet, and that would be a wonderful thing.