K-12 Education

1. K-12 Education What reporters need to know

2. Governmental structure • K-12 education is both • A creature of state government • And a unit of local government • Special case: Charter schools • Creature of chartering agency

3. Unit of local gov’t • School districts • Geographically defined • Governed by elected Board of Education • Administered by superintendent

4. Boards of education • Elected by the people • At large • On non-partisan ballot • Exercise legislative power • Establish policies • Hire/fire superintendents

5. Superintendents • Professional educators • Experienced • Advanced degrees • Highly paid • Oversee all school operations • Recommend and supervise staff

6. Creature of state gov’t • State government controls • Curriculum • Teacher standards • Funding

7. Curriculum • Core curriculum • Math, science, language arts, social studies • Grade-level expectations • Graduation requirements • Recently expanded beyond Govt/econ

8. Teacher standards • Requires all teachers to be certified • To teach in Michigan • At their grade level or subject area • Sets certification standards • Enforced through university programs

9. K-12 Funding • Governed by Proposal A, a constitutional amendment approved by the people in 1994.

10. Before Proposal A • Schools funded by combination of • Local property taxes • State funding if property tax revenue fell below a certain level • Level of funding mostly depended on • Local tax base • Local decisions on tax rate • Millages subject to voter approval

11. Before Proposal A • Two main flaws in funding mechanism • High property taxes • A third higher than U.S. average • Eventually led to ‘tax revolt’ • Disparity in per-pupil spending • Richest districts spent almost four times as much as poorest.

12. Funding disparity example • Per-pupil spending in 1993-94 • Lowest: Sigel Township, Huron County • $2,762/pupil • Highest: Bloomfield Hills • $10,294/pupil • Gap: $7,531 or 3.7:1

13. What caused disparity • Funding depends on local tax base • Which depends on land value • Industrial, commercial land worth more per acre than • Residential, agricultural, gov’t-owned

14. Impact of disparity • Constitution guarantees free public education to every Michigan child • At a 4/1 funding disparity, was that guarantee being met? • Many Michigan residents said no.

15. The crisis • By early ‘90s • Collision of funding disparity and tax revolt • Many districts struggling to make ends meet • Poster child: Kalkaska • Couldn’t pass operating millages • Ran out of money • Shut down three months early

16. The crisis • Kalkaska galvanized Legislature • Property tax abolished as primary K-12 funding source • Voters given a choice • Return to income tax as primary funding source Or • Pass Proposal A

17. Proposal A of 1994 • Established state as primary funding source • Raised sales tax from 4 to 6 percent • Levied 6-mill state education tax • Big tax decrease for homeowners • Guaranteed a minimum per-pupil funding level • Big increase for poorest districts • Didn’t immediately reduce funding for well-off districts • Capped growth in taxable property value • Established schools of choice and charter schools

18. Proposal A • Adopted in March 1994 • Margin of 61 to 39 percent

19. Implementation • School Aid Fund is established • Revenue stream set up • From 6-mill State Education Tax • From sales tax, other sources • State becomes funding source • Foundation allowance per pupil • Set annually by Legislature • Distributed to districts by formula

20. Impact on schools • Richer districts • Funding levels protected, but grow more slowly • Poorer districts • Get substantial increase, plus catch-up funding • Sigel Township, 1993: $2,762 • Sigel Township, 1994: $4,200

21. Growth in per pupil funding • Minimum foundation allowance • 1994-95 -- $4,200 • 1999-00 -- $5,700 • 2004-05 -- $6,700 • 2008-09 -- $7,316 • (CPI = $6,013) • Bloomfield Hills • 1993-94 -- $10,294 • 2008-09 -- $12,433 • (CPI = $15,116)

22. Selected districts in 08-09 • Shepherd, Beal City, Chippewa Hills, $7,316 • Mount Pleasant, $7,376 • Alma, $7,584 • Buena Vista, $8,246 • Midland, $8,904

23. Reduction in disparity (2009) • Lowest-funded districts • Numerous, at $7,316 • Highest-funded district • Bloomfield Hills, $12,433 • Ratio • 1.7/1

24. Pros • Proposal A works well when • Enrollments are rising at moderate rate • State economy is okay • Costs are contained

25. Cons • It works less well when . . . • Enrollments fall • Costs are less elastic than enrollment • Costs rise more rapidly than revenue • State economy is poor

26. Trouble Ahead? • Enrollment • Michigan birthrate below national average • More people leaving than moving in • State’s economy • Highest unemployment rate in nation • Annual budget crises • Costs rising • Health costs going up at twice rate of inflation

27. Bottom Line • Proposal A has accomplished some of its most important goals -- • Coming through on the state’s guarantee of a free public education • Reducing -- but not eliminating -- the disparity in funding between rich and poor districts.

28. But . . . • It is not working well in a time of declining enrollments and a struggling state economy • It is losing support among key constituencies • Sentiment is building for change in the way Michigan funds K-12 education.

29. Questions? • Today’s PowerPoint design is “Desk Lamp”