DOC Discussion Week One: School Finance Problem

For our first DOCS Discussion, we’re going to look at an example from Michigan’s recent past.

In 1993, the Kalkaska School District in the northern lower peninsula of Michigan made headlines when it ran out of money and had to close its schools three months early. On three occasions over the previous year, the Kalkaska School Board put proposals before district voters, asking for an increase in the local property tax rate (an increase that would have resulted in an annual tax increase per taxpayer ranging from $200 to $400 a year) to keep the schools open, and the voters rejected each proposal. Faced with the prospect of cutting bus service, arts education, and band on the one hand, or of not paying employees on the other, the district opted to close in March, despite the active intervention (and opposition) of Michigan’s then-governor, John Engler. This event set the stage for the passage of “Proposal A” the following year, which not only dramatically changed the way that schools are financed, but also altered the structure of Michigan’s entire school system and fundamentally influenced the way that the state collects and spends money across the board.

 

As you’ll read in the attached article by Chastity Pratt Dawsey (Bridge Magazine, April 29, 2014, retrieved from: http://bridgemi.com/2014/04/school-funding-fight-turns-on-two-visions-of-michigan/) schools are funded through what we call a “per-pupil allotment.”  Depending on where a child lives, she or he will bring a certain amount of state funds with her, whether that student attends a regular public school, or a publicly funded charter school.

 

Rather than tell you the specifics of what was decided, though, we want to challenge you all to do a little historical problem-solving. In order to do this, you need to know some key details about the situation in Michigan before Proposal A:

 

1)   The United States has a strong tradition of locally funding our schools. In practical terms, this means that American states, including Michigan, fund their schools on a district-by-district basis, largely via locally-assessed property taxes.

 

2)  While linking school funding to property taxes has kept funding local, it has also built inequity into the system. Wealthier districts have a larger tax base to draw upon such that the per pupil funding available in one district could easily be twice, or even three times as much as that available in another district. For example, in 1993, the per pupil allotment for a student in Marquette was $4,112, while in Ann Arbor it was $7,279, and in Bloomfield Hills it was $10,358.

 

3)   To add to what many perceived as a painful irony, residents of poorer districts actually had to tax themselves at a higher rate, just to increase the amount of money they generated for schools and keep it even close to that generated by wealthy districts.

 

4)   The debate over school finance frames some big questions related to fairness, and to our sense of what’s best for Michigan students. Would it be fairer, for example, if every district pooled the money it generated with that generated by all of the other districts across the state, and the money was redistributed evenly? Many would counter that if a district has a richer tax base, that fact is reflective of work done and earnings generated by that district’s residents. They would claim that pooling all of the school funds and distributing them evenly across the state would, in effect, punish residents of wealthier districts who deserve the fruits of their labor.  Advocates of “fairness” could argue on both sides of this question (and since we’re talking about this, let’s be frank and say that it’s likely that the majority of people in the class come from districts that would be on the high end of this scale).

 

5)   A propos of point #4, it should be noted that only one American state, Vermont, has enacted a system wherein the “per pupil allotment” across the state is basically the same. In 1997, Vermont’s legislature enacted “Act 60” in response to a Vermont Supreme Court ruling that the system that was in place before 1997 was unconstitutional. The law took property value out of the school finance equation, and though it was deeply controversial at the time, the law (with some amendment) has remained in place.  Here’s an account from 1999 by David Goodman (Mother Jones, September/October 1999, retrieved from: http://www.motherjones.com/politics/1999/09/americas-newest-class-war).

 

The central question for you to answer is do you think that this situation was a problem and, if you do, what kind of a problem is it? Is it, for example, a relatively minor policy problem, such that things could be tweaked, perhaps by adding some $ to the per pupil allotment of districts on the low end of the scale? Is it a major policy problem, requiring far-reaching measures like those implemented in Vermont? Maybe the problem requires that we think differently in some way about how schools get funded? On the other hand, you might feel that there is no problem here beyond, perhaps, the district in question doing a better job of persuading voters that a millage increase was warranted. Perhaps you would feel that making changes, especially dramatic changes to the statewide formula for school funding would be a mistake and a damaging over-reaction to a specific, local incident.

 

Following from your analysis of and conjectures about the situation, please EITHER discuss what kind of solution you would have advocated for and why OR, if you think instantiating potential “solutions” would be misguided and might create worse problems, explain why you feel as you do, and why you don’t think this is a problem in need of being solved legislatively.


(Next week, we’ll learn what actually happened in Michigan in 1994, and we’ll ask you to do a little reading and to offer your analysis of and opinions about what happened)