News Story

Charter School Growth in Michigan is Not the 'Wild, Wild West'

There are 48 more charter schools since cap was lifted in 2011

When in 2011 the Legislature voted to repeal a cap on charter public schools, Democrats warned that “allowing an unlimited number” of “for-profit” charter schools would put students at risk.

Four years later, a new report by the National Alliance for Public Charter Schools finds that while Michigan has the fifth most charter school students in the country at 159,000, growth in the number of schools has been steady. California leads the nation with 547,800 charter school students. Nationwide, there are an estimated 2.89 million students enrolled in charter schools.

The report states that Michigan added 10 new charter schools in 2014, which was 10th most in the country. Buddy Moorehouse, vice president of communications for the Michigan Association of Public School Academies, said more updated information shows Michigan had a net gain of six charter schools in 2014.

“That growth has been very controlled and responsible,” he said.

The most common way charter schools are authorized is by state universities. In the fall of 2011, there were 255 charter schools in Michigan. There were 303 charter schools as of the fall of 2014.

“When the cap was lifted in 2011, there were people who said it was going to be the 'Wild, Wild West,'” Moorehouse said. “And we were going to see a charter school opening on every corner. That has not happened.”

In 2011, former state Rep. Kate Segal, D-Battle Creek, said uncapping the charter schools was “a complete assault on our public school system in Michigan.”

“Senate Bill 618 unfortunately benefits for-profit charter schools at the expense of our public schools and their students,” she said four years ago. “Removing the cap will allow an unlimited number of for-profit schools to open in whatever community they choose and put students at risk.”

Gary Naeyaert, of the Great Lakes Education Project, which advocates for school choice, said the growth of charter schools in Michigan was fantastic news for parents and families.

“There are 1.5 million kids in Michigan and not a single one of them has ever been assigned to a charter school,” Naeyaert said. “People want options.”

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.

News Story

Lower Gas Costs Benefit School Funding in May 5 Ballot Proposal

Michigan’s public schools could collect more state tax dollars than originally projected if voters approve a sales tax increase on the May 5 ballot, and if the price of fuel stays at its current low level. The ballot measure is part of a “just fix the roads” initiative that increases taxes by some $2 billion overall, of which $1.2 billion would go to roads.

The complex package would remove the sales tax from fuel purchases (the proceeds of which do not go to roads), and simultaneously impose a 22.7 cent per gallon increase in the gas tax, and a 26.7 cent per gallon increase in the tax on diesel. (These amounts then increase over time with inflation.)

At higher prices the provision exempting fuel from sales tax would largely offset the gas tax hike, but that doesn’t happen when fuel prices are low.

Simply put, an exemption from the 6-percent sales tax saves taxpayers 18 cents per gallon when gas costs $3, but just 12 cents per gallon when the price falls to $2. In contrast, the fuel tax increases are not affected by the per-gallon price.

Most sales tax revenue is earmarked to schools, and the Senate Fiscal Agency originally calculated that if the May 5 ballot measure passes, schools would gain $336.5 million. But these calculations were based on gas selling for $2.75 a gallon. If gas prices are lower, the arithmetic changes and schools will get even more.

Regular gas averaged $2.11 per gallon in Michigan on Feb. 2. A year ago, the average was $3.26 per gallon. The average gas price statewide has been under $3 since early November.

Here are the additions and subtractions that amount to more money than first projected for schools:

If the sales tax goes from 6 percent to 7 percent, it will deliver an additional $708.6 million to public schools next year. They will also get an extra $151.1 million from a provision earmarking more “use tax” revenue, and another $44 million from a new “Amazon tax” on Internet purchases, enacted to get more legislative votes for the ballot initiative.

On the other side of the ledger, if gas returns to $2.75 per gallon, then schools would have foregone $567.1 million from exempting fuel purchases from the sales tax. But when gas costs just $2.00 or $2.25 per gallon, the amount of foregone revenue is significantly less. 

The bottom line is that lower fuel prices now mean public schools would get an even larger proportion of the “just fix the roads” tax increase than originally projected, and taxpayers will be worse off than projected by an equivalent amount.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.