Michigan school districts have amassed $1.6 billion in "rainy day funds" while complaining about too little state aid, records show.
As a result, one state senator wants to recapture $282 million of those surplus funds to help balance the state budget.
"For people to be holding that much in reserve, especially with everything that's going on in our economy today, is obscene," said Sen. Jack Brandenburg, R-Harrison Township.
Brandenburg, chairman of the Senate finance committee, said he will introduce a bill to cap rainy day funds at 15 percent of a school district's annual operating expenditures. The more than 300 districts with surpluses bigger than that would have to spend their excess savings before receiving another dime from taxpayers, he said.
Not one more dime! Keep in mind that the total Michigan school aid budget is roughly $13 billion a year, so this isn't any sort of cure-all measure by any means. It's petty theft on that scale. Schools, of course, are shocked, shocked I tell you, that this is being suggested.
"It's the most ludicrous thing I've ever heard," said John Krolewski, superintendent of Genesee County's Bendle Public Schools, which has a $4.6 million general fund surplus equal to 33.2 percent of its annual operating costs.
"We've been very frugal," and now "we've got someone out there who says, 'You've got too much money.'"A report this month by the Senate Fiscal Agency shows that of 789 regular and charter school districts in Michigan, 309 had 2010 fund balances greater than 15 percent of their annual operating costs. Looking only at Michigan's 546 traditional, noncharter school districts, 210 had surpluses beyond 15 percent of operating costs.
The story goes on to explain that not all districts are the same. One that has a three-year surplus is a one-room schoolhouse in Huron County. Another is the Utica Community Schools, sitting on the biggest dollar amount of $32 million, but that is only 12% of their yearly operating costs. And many of the districts with funds "far in excess of 15 percent" are charter schools, who can't turn to taxpayer millage for capital improvements - and besides, do the Republicans really want to offend the charters? Dick and Betsy will be soooo displeased.
You could hazard a guess that the only traditional districts out there with very healthy rainy day balances are the wealthier districts - but a quick check of a few the districts here in Kent County 'burbs show that most of the ones you would consider "wealthy" are in the parameters of suggested savings. Forest Hills and East Grand Rapids come in at 14.7 and 17.1 respectively. Caledonia was one high mark at 22. But surprisingly, Rockford was only at 4.9. The DNews points out that the biggest dollar amounts behind Utica are all in Oakland County, but the percentages compared to yearly operating costs vary a great deal.
Brandenberg goes on to flat-out lie about the state's rainy day fund - known as the Budget Stabilization Fund in technical terms.
Brandenburg said the state depleted its rainy day fund during the lengthy recession and it's time for school districts to spend the surpluses. "It's pouring outside," he said. A 15-percent cap would allow flexibility, he added.
False. The state did not deplete the fund during the "lengthy recession". The Republicans took ALL that money as John Engler was riding off into the sunset in 2002. Check the chart, and nip this talking point right in the bud:
So why is Jack doing this song and dance, and risking the alienation of wealthy school districts and charters? Because he doesn't want to take the tough vote on raising taxes on seniors.
He said he would introduce his bill soon because he wants the school fund money to partially offset Snyder's proposed pension tax, which Brandenburg opposes.
The whole thing sounds like it might be illegal anyway (as most of the latest Republican proposals do), and certainly would be an administrative nightmare to implement. And with Snyder's budget cuts coming, the number of districts with any sort of excess is going to drastically fall very soon, making the exercise a complete waste of time. Not to mention that it does nothing to address the problems of the 42 districts in deficit now, and the estimated 160 districts that Snyder's cuts are going to put closer to bankruptcy.
Something tells me that Jack just wants to avoid having Mr. Perks parked on his street for the next four years. Easier to raid other people's slush funds rather than deal with the mean, mean politics in Macomb County.
(and yeah, those Badgers got me fired up now, if you were wonderin'.)