News Story

Financial Disaster for School Districts Hasn’t Come

Number of districts in deficit stands at lowest in 15 years

Four years ago, then-State Superintendent of Public Instruction Mike Flanagan told the Michigan Legislature that school districts were “spiraling into financial disaster,” according to a March 6, 2015, Detroit Free Press story. Flanagan said that fixing the problem required enrollment stability, which could mean imposing a moratorium on any new charter schools.

Back in 2013, statewide media outlets had reported that a record-high 55 school districts were in deficit, which means they spent more than they collected during the school year and borrowed to close the gap. Flanagan predicted that there could be 100 school districts in deficit “before long.”

That never happened, however. In fact, the number of districts in deficit now is likely to equal the lowest total since 1988-89, according to a report released this month by the Michigan Department of Education.

There were 17 school districts that ended the 2017-18 school year in deficit. That is the lowest number since 15 districts were in deficit in 2003-04. Moreover, the March 2019 report projects that seven of those 17 districts were on track to eliminate their deficits by November 2018. The department won’t verify until June whether that actually happened.

If the projection is correct and there are just 10 school districts operating in a deficit condition, it would tie the lowest number since the 1989-90 school year, the earliest year included in department records. There were 25 school districts in deficit in 1989-90, and the number fell to a low of 10 districts in 2002-03, when Michigan’s “lost decade” of economic woe was taking hold.

Comparisons of district numbers over time are slightly complicated because the state now includes in its definition of school districts something that did not exist in 1988 — charter schools. The state identified 619 school districts in 1988-89 and about 900 in 2017-18. That increase is attributable to the growth of public charter schools, of which there were about 300 in 2017-18. Like a conventional school district, a charter school can go into deficit.

A narrative of a school funding landscape in crisis had been a theme in state news reporting, but it slipped out of the news as fewer and fewer districts overspent their revenues. Most media outlets have stopped reporting on the Education Department’s quarterly report that contains deficit information.

A big reason for the turnaround is the steady increase in funding for K-12 schools, which began early in the current decade.

Total state dollars (not including local and federal) for K-12 schools have increased from $10.8 billion in 2010-11 to $13.1 billion in 2018-19, according to the Senate Fiscal Agency. That’s about an $800 million annual increase when adjusted for inflation.

The 17 districts in deficit include: Distinctive College Prep, Gwinn Area Community Schools, Maple Valley Schools, Michigan Online School, Mt. Clemens Community School District, Vanderbilt Area Schools, Bay City Academy, Beecher Community School District, Detroit Public School Academy, Pontiac City School District, South Lake Schools, Benton Harbor Area Schools, Hazel Park City School District, Pinckney Community Schools, Suttons Bay Public Schools, Macomb Academy and Highland Park City Schools.

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

Michigan Teachers Union Suffers Important Court Defeat

State Court of Appeals says right-to-work law means what it says on compulsory union dues and fees

The Michigan Court of Appeals this week ruled that a teacher has the right to stop paying fees to the union at his workplace despite its refusal to allow him to do so.

The Mackinac Center Legal Foundation, which represented teacher Ronald Robinson in his legal fight against the union, said the decision further enhances Michigan’s right-to-work law.

“The court ruled that these tricks couldn’t stop the teachers from exercising their rights under the right-to-work law,” Derk Wilcox, an attorney with the Mackinac Center Legal Foundation, said in an email.

The court said that the Michigan Education Association and the Ann Arbor Education Association committed an unfair labor practice by continuing to charge Robinson fees after he opted out of the union following the passage of Michigan’s right-to-work law.

A few days before the law went into effect in March 2013, the union local and the school district agreed to extend their collective bargaining contracts until 2016, effectively exempting the union from the law until the revised contracts expired. But in 2014 and 2015, the union and the district revised those renewed contracts, which according to the right-to-work law, made them subject to right-to-work requirements.

According to the law, “an agreement, contract, understanding, or practice that takes effect or is extended or renewed after March 28, 2013,” is subject to the law’s prohibition on compelling employees to pay union dues or fees as a condition of employment. This means that after the Ann Arbor contracts were changed, all workers who wanted to should have been able to opt out of paying union dues or fees.

Despite the law, Robinson – who had been a teacher for 24 years – was still forced to pay the union. Robinson said he feared he’d have his credit destroyed by the union’s collection agency if he didn’t pay.

“The MEA paid its collection agency over $152,500 last year,” Robinson said in a statement. “How many teachers’ credit scores have they destroyed?”

The appeals court upheld an April 2018 decision by Michigan Employment Relations Commission, a state agency that also ruled in favor of Robinson.

Robinson said he opted out of the union because he believes it protects bad teachers, is slow to respond to grievances from members and doesn’t negotiate higher pay or benefits.

“Ronald Robinson is a decorated teacher who did everything he was supposed to [do] to resign from the union,” Wilcox said. “Yet the union kept coming after him to collect fees anyway. Now he is free from the union’s [demands] that he pay them when he is no longer a member.”

Because the case was decided in a state court with an unpublished decision, Wilcox said, the precedent will not extend much further than Ann Arbor schools, but it does show workers elsewhere that they can challenge unions and win.

The appellate court decision was made March 19.

“This ruling by the Michigan Court of Appeals upholds right-to-work protections for workers laid out clearly in state law,” said Mark Mix, president of the National Right to Work Foundation, in a press release. “Time and again, Michigan union bosses have demonstrated that they will stop at nothing to obtain membership dues and union fees from the workers they supposedly represent, regardless of workers’ wishes.”

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.