2010-09-26 / Front Page

Barnes says state is using school tax dollars as a 'Rainy Day Fund'

Sawyer recounts shell game state plays to rob school funds
BY JEANNE MARCELLO STAFF REPORTER

CHESANING - “The State's budget is closer to being settled,” Chesaning Union Schools Finance Director Scott Sawyer told the Chesaning Board of Education, as he began his report during the Sept. 20 board meeting. “There's a lot of us wondering how there's a balance forward,” he said expressing concern.

Chesaning Superintendent Don Barnes accused the state of playing politics with school funds, “They're making this year look pretty good. But next year, watch out! The state is creating a rainy day fund from the school aid fund,” he stated.

Each year, the Michigan State Legislature determines how much money each school district receives on a per pupil basis. In recent years, the state has started at approximately $7,300 per pupil in state aid funding. Last year, the state cut that funding by $165 per pupil from the previous year; then they back filled it with American Reinvestment and Recovery Act (ARRA) funds. As a result, Michigan schools had to spend time and money changing their bookkeeping systems to track the use of ARRA funds, which could only be used for certain programs. The state used this tactic to get around the federal government's requirement that the state maintain school funding levels in order to qualify for ARRA.

The schools still lost money due to inflation and contract obligations, and spending cuts were necessary.

Then the state turned around and reported that the School Aid Fund had a surplus of $238.2 million carried over from last year.

“We took a cut last year. How is it that they have a surplus?” Sawyer asked rhetorically, addressing the Chesaning Board of Education.

Sawyer talked about the games legislators are playing with school funding.

He cited a recent Michigan State Senate report, where under the proposed budget the state would “give” the School Foundation Grant Fund $30 million. However, if you look at the expenditures, you'll find the state is taking away $208.4 million, shifting it towards community colleges and prison education programs.

“They claim the $208.4 million is to subsidize community colleges. But community colleges aren't part of the school aid fund,” Sawyer argued.

The cost of MEAP testing had previously been paid through the general fund as well, but now that's another $20 million taken out of the school aid fund, he explained. This means the state is mandating the school aid fund cover the cost of additional programs without providing the revenue to do so, Sawyer reasoned. Consequently, schools lose and students lose.

Sawyer told the board that the state says they're going to give $7,316 per student this year. But, then they're going to cut $165 per student like they did last year. Then they're going to give back $11 per student, which brings the reduction to $154 per student. To make matters more complicated, the state cut $302.60 per student from state funding and replaced the same amount with federal funds (with more restrictions and complicated reporting requirements).

“They're cutting us more than they make up,” Sawyer told the board.

He further stated, almost $2 billion of the state's $13 billion school aid budget is now in federal dollars; a combination of the ARRA and the EdJobs program subsidy, both of which are one-time grants.

In addition to the funding challenges the state has presented schools, Sawyer pointed out that the state mandated retirement allocations have increased 60 percent.

Barnes commented, “We have to be very careful about the number of employees we have.”

According to Sawyer, in the past five years, the amount of state aid schools received has increased by one percent. Inflation is up six percent during those five years. “The cost of everything went up in the last five years. We've all had to cut at least five percent!” Sawyer said.

Looking back over the past nine years, Sawyer listed: state aid to schools increased just 13 percent; while retirement costs are up 60 percent, insurance costs up 89 percent and inflation rate up 20 percent.

“That shows the problem. That's where our crisis is; if your paycheck doesn't go up, but inflation does,” Sawyer stated.

The $208.4 million that the state is taking out of the School Foundation Grant is $150 per kid in the State of Michigan, according to his calculations.

“The state has the money. They're just not handing it out to us. There doesn't need to be more taxes, it just needs to be spent on the things for which it was collected,” Sawyer concluded.

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