News Story

Superintendent Claiming Less Money Receives $515 More Per Pupil

West Bloomfield Superintendent Gerald Hill says district gets less than 2010, state numbers say otherwise

As the statewide debate over school funding continues, an Oakland County superintendent whose district receives about $515 more per student today than it did in 2010 says the district is getting less money from the state.

West Bloomfield School District Superintendent Gerald Hill made his claim on April 11 in MIRS, a Lansing-based news site.

The district is receiving less in the "state foundation allowance," which has dropped from $9,116 per student in 2009-10 to $8,676 per student in 2013-14. But the state foundation allowance is only a part of the state funding a school district receives.

West Bloomfield received another $7.2 million outside of the state foundation allowance in 2013-14 that was used to pay for such things as special education, adult education and teacher retirement benefits. That financial data comes from the Michigan Department of Education's status funding reports

Many advocates for more funding for conventional public schools are ignoring the money that districts get in addition to the foundation allowance. 

"The West Bloomfield superintendent is repeating the same misinformation that we have seen from the MEA and other school officials," said Audrey Spalding, education policy director at the Mackinac Center for Public Policy. "By only considering the foundation allowance, he is ignoring nearly $1,200 per student in funding from state taxpayers."

The MIRS article said there were charter public schools around West Bloomfield that were creating competition. Hill said that made the challenges for his district "really complex."

However, West Bloomfield has enrolled 1,642 students from outside the district, including about 750 students from the Pontiac School District through the state's schools of choice program. West Bloomfield has 6,058 students, meaning about 27 percent of the student body is from outside the district.

"West Bloomfield takes in hundreds of Pontiac students through schools of choice," Spalding said. “Clearly the district understands the power of choice and how providing students with a better educational option can improve a school's bottom line."

The MIRS article stated:

West Bloomfield School District Superintendent Gerald HILL said that after the district posted a $1.7 million deficit in FY 10, it made big changes that included a 10 percent pay cut for staff and outsourcing custodial and transportation services. 

Those are big changes, but will they keep the district off future deficit lists? 

'Getting off it is one thing. Staying off it could be another with the continuing flatness of support after a decline from the state,' Hill said. 

There are private schools around West Bloomfield, and statewide districts are facing competition from charter schools. 

'We have fewer students, less money, but we're creating more schools. That makes the challenge really complex,' Hill said. 

Although Hill pointed to a 10 percent pay cut that made statewide news in 2011-12, the district's own payroll records show the district never came close to seeing that kind of cost savings. There were 256 people identified as teachers on a payroll spreadsheet provided by the district for 2011-12 when the 10 percent cut was implemented and also the next year. Overall compensation for those teachers dropped by 1 percent.

Teachers could take on additional responsibilities such as a coaching job as one way to increase their salary. Overall gross salaries of all 689 employees on payroll in 2011 and 2012 increased from $27.7 million to $28.1 million. The district's payroll dropped $2.3 million in 2012, but there were 86 fewer employees on payroll in 2012 than in 2011. 

Hill didn't respond to a request for comment. 

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

Special Deals Allow Detroit To Collect Hundreds Of Millions In Extra Revenue

Casino tax, utility fee, income tax all specially assessed by the city

While some are pitching a storyline in Detroit of a bankrupt city in need of more revenue, the city already collects hundreds of millions of dollars in taxes that no other city can.

The state allows only the city of Detroit to collect a "utility users' tax" and a casino "wagering tax" that combined accounted for $221.4 million in revenue in 2012.

Despite that, Gov. Rick Snyder is pitching a $350 million bailout for Detroit. A recent poll shows the bailout to be unpopular among voters, particularly Republicans and independents.

Both of the special taxes for Detroit are in addition to the city's income tax, which is the highest of the 22 cities in the state that have an income tax. 

"Detroit is the only city allowed to do a lot of things," said Gary Wolfram, a professor of economics at Hillsdale College and an adjunct scholar at the Mackinac Center for Public Policy. "Realistically, why? Because they have enough votes to do it."

There also are 22 other cities in Michigan that have casinos operating within their boundaries, but those cities are are not getting extra tax dollars from the gambling operations. Only Detroit gets to collect a special "wagering tax" from casinos, which amounted to $181.4 million in 2012.

Wolfram said it makes sense Detroit would collect taxes from a casino because it attracts a lot of people from outside the city, which can put a strain on city resources, such as police and fire protection.

James Hohman, assistant director of fiscal policy at the Mackinac Center, said Detroit also is allowed to assess up to a 5 percent tax on their residents' utility bills. That includes electricity, telephone, natural gas and steam bills. Detroit charges the maximum rate. 

The law states that a city has to have a population of 600,000 or more to enact the tax, meaning Detroit is the only city that meets the requirement to implement the tax. That population figure has been lowered to specially benefit the city as population dropped. The "utility users' tax" brought in $39.8 million in 2012 and is used to fund the police department.

Wolfram said if the revenue is used to do what residents want government to do — protect life, liberty and property — than it is an efficient way to do it.

On average, Detroit police took 58 minutes to respond to an emergency call in 2013, according to its June 2013 Proposal to Creditors. The national average is 11 minutes. 

"The real problem is not on the tax side, but on the spend side," Wolfram said. "The real problem is what the hell Detroit did with the money."

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.