School District Gets More, But Superintendent Complains About ‘Do More For Less’

Remarks related to some extra internet sales tax revenue going to support roads, not schools

By Tom Gantert | December 21, 2018

Mark Greathead, superintendent of Woodhaven-Brownstown School District, chimed in Thursday on a deal between Gov. Rick Snyder and legislative leaders to get extra money for road repairs and environmental cleanup projects by diverting some expected state revenue increases to them. Without the agreement, most of the new money would otherwise go to the School Aid Fund.

“Every superintendent in Michigan has been forced to work within the ‘do more with less’ model of school administration over the last many years, but I certainly doubt any of us expected to be told we now have to pay to fix Michigan roads,” Greathead said, according to The Detroit News.

Like many claims by public school administrators about having less, this one doesn’t stand up to scrutiny, especially at Greathead’s school district.

Woodhaven-Brownstown has seen its state funding (not including local and federal dollars) increase from $6,391 per pupil in 2010-11 to $8,003 per pupil in 2017-18. After adjusting for inflation, the district received the equivalent of $869 more per pupil in 2017-18.

The district’s general fund revenues (which include state, federal and local funding) increased from $40.5 million in 2010-11 to $54.4 million. Once inflation is factored in, the district’s general fund revenues were $9.2 million higher in 2017-18 compared to seven years earlier.

The Woodhaven-Brownstown financial data was derived from figures obtained from the Michigan Department of Education, the Center for Educational Performance and Information and the district’s own comprehensive annual financial report

On Thursday the Legislature enacted the revenue diversion plan and Snyder is expected to sign it. The money diverted from schools is expected to be made up by higher sales tax collections from taxing internet purchases, which under a recent U.S. Supreme Court will no longer be prohibited under federal law. This means that the School Aid Fund won’t lose money, but going forward it won’t get as much additional revenue as it would have without the deal.

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.

Michigan Pays Off Debt from the 80s

New administration may borrow more

By James M. Hohman | December 20, 2018

The new Whitmer administration will work on a new budget shortly after being installed into office. Its staffers should find that it will reap the benefits of the Snyder administration’s insistence that the state pay down its long-term debts. Those benefits ought to be appreciated as the new administration may face temptations to kick the costs of today’s government onto future taxpayers.

In 1988 voters agreed to let the state borrow $660 million for state park improvements and environmental cleanup, with the general taxpayer responsible for paying the debt. The funds have been spent since then, but the debt remained until this year. The state will pay another $22.9 million on the bonds this fiscal year. After that, it will finally be free of the burden 31 years after it was approved.

When this and other general debt payments are tallied, the state will spend $27.6 million less on bonds in the upcoming fiscal year, and $45.6 million less four years from now, according to the latest state treasurer’s report.

The state also borrowed money to pay for projects to be paid off with transportation revenues, which gave the state more road work at the time it bonded, at the expense of current and future road fixes. This debt is down, too, from $2.5 billion in 2009 to $1.4 billion in 2017. Debt payments here dropped by $38.5 million over the period.

This positive fiscal development will do less for the state budget than economic growth, which is projected to increase state revenues by $1.7 billion over the next three years, but it is another reason why lawmakers have more tax money to budget year after year.

The incoming governor ran on a platform that called for more money for schools, health care, business subsidies and the roads. Growth, less debt, and the other positive budget trends may not provide enough to accomplish all of those goals. Given a Legislature reluctant to raise taxes, she may be tempted to borrow to accomplish her agenda.

That would be a mistake. This kind of debt gives us more spending today at the expense of tomorrow’s taxpayers, and with added interest. If the state needs to spend money for the new governor’s priorities, it can largely get the same by dedicating already-existing revenue without having to pay bondholders extra in interest.

Politicians are often encouraged to spend now and pay for it later. Gov. Rick Snyder fought that temptation. Residents will find out whether Gov. Gretchen Whitmer will do so as well soon.