For years and years, Michigan voters have clamored for a property tax cut. Now that they are about to get it, they are wondering “at what price?”
One month after the Michigan legislature stunned taxpayers by abolishing the property tax for support of local public education, school districts across this struggling industrial giant are worried about what happens next.
Schools will open next month, but next year is another matter. With a $6.3 billion hole carved out of school funding for next year, no one knows how or when lawmakers will remodel the state’s public education system.
In one of those impulsive moments that rarely strikes a legislative body, lawmakers ended more than two decades of debate over the state’s education funding system and killed the property tax, effective next summer.
In its place is nothing.
Carving out two-thirds of the school budget is pretty bold stuff for politicians who, like most, are condemned as hopeless windbags who nibble at the margins of important issues.
“Let no one underestimate the magnitude of the change taking place,” state Sen. Richard Posthumus, the chamber’s Republican leader, said last week. “Never will education be the same.”
That’s a big part of the problem. No one knows how the schools will operate next year, but it is almost a given that they will not have the same amount of money to spend that they do now.
It is all part of the brave-and risky-new world that Gov. John Engler rang in last Thursday as he signed the repeal into law.
Retooling the $9 billion industry of public elementary and secondary education would be daunting under any circumstances. But establishing tax and education policy in a highly partisan atmosphere by the unofficial deadline of Dec. 31 is asking a lot.
When the property tax was repealed, lawmakers didn’t suggest a replacement because there was no consensus. Now the repeal has created a crisis that will force the legislature to act within the coming months.
What few blueprints that exist are in dispute, and there are bound to be ideological battles over school choice, vouchers and work rules.
The education funding crisis is being cast as “an opportunity” by the Republican governor and supporters of the repeal.
Others are more prudent.
“I think it holds some promise. I don’t see it being all negative,” Coldwater Public School Supt. William Chinery said. “But this may be much more complex than what they thought at the beginning.”
Chinery’s caveat is important.
On one hand, Michigan could set the national model for eliminating public education’s overreliance on the property tax and establish a more stable financial base for schools.
At the same time, Michigan can show other states how to narrow, if not eliminate, the wide spending chasm between rich and poor districts.
“It’s kind of exciting to be faced with a massive call for restructuring school finance and what that could mean,” said Terry Whitney, an education policy specialist for the National Conference of State Legislatures. “If Michigan is successful . . . it might be an impetus for other states to deal with the issue in a broader scope instead of messing around at the fringes.”
Doing that, however, means upsetting the established order in a business notorious for its bedrock bureaucracy. It is not at all clear that Michigan officials are up to the fight that pits the educational haves versus the have-nots.
“My concern is that in solving the problem they not ruin those school districts that are excelling,” said William Mitchell, superintendent of the 4,000-student East Lansing Public Schools.
In the working class community of Romulus, next to Detroit Metropolitan Airport, voters in 1990 gave overwhelming approval to a $45 million bond package that paid for high technology in five elementary schools, with five computers and a 35-inch television monitor in every classroom. Property taxes are paying for it.
“The governor just cut our legs off and said, `Don’t worry, we’re going to put new legs on,’ ” complained Art McPharlin, administrative assistant to the district’s superintendent.
“Don’t cut the instructional programs of the Birminghams and Livonias and now the Romuluses so that Podunk” can get more, he said. “Help the other school districts . . . but don’t take it away from the others.”
A second major worry is replacing the dollars lost. It does not appear likely that all of the $6.3 billion cut will be replaced, and if that happens the rich districts will probably take the biggest hit.
State Treasurer Douglas Roberts said the most the state will legally be able to raise in replacement taxes is $3.8 billion. Local schools should be given the option, he said, to raise the remaining money.
Mitchell warned there could be serious political repercussions from that because voters have been conditioned to expect last month’s tax cut will remain largely intact. If the legislature raises the income tax and other levies and gives locals the option to implement a local income tax or a property tax, some voters will soon wonder what happened to the great tax cut of 1993.
“When it’s replaced, they’re going to be angry and they won’t take it out on the legislature. They’ll take it out on the schools,” he said.
They’re taking it out already. In the last year it has been much more difficult in Michigan to obtain voter approval for property tax levies for education.
Only 28 percent of June ballot requests were approved this year, compared to 47 percent in 1992, according to figures from the Michigan Association of School Boards.
Kalkaska Public Schools closed two months early this year because voters rejected a property tax increase. Voters in that northern Michigan district said no to a second request last week, raising again the prospect of schools closing early.
Nationally, the trend is similar, suggesting the patience with the property tax is wearing thin.
Perhaps the biggest obstacle in Michigan is determining the agenda.
Republicans are talking about major structural changes in the operation of schools, while Democrats are talking money. Both have talked of the need for bipartisanship, putting the interests of children above politics.
But at last week’s signing ceremony, in front of the brick, one-room schoolhouse where auto pioneer Henry Ford went to school, Engler attacked the state’s “monopoly on mediocrity” and “unyielding (school) administrations and inflexible unions.”
The unfolding Engler agenda includes school choice, cost-cutting and union-bashing.
“There are a lot of vested interests that are threatened. The power and the control that teacher’s unions have had over education policy in Michigan ended this morning,” Engler said.
The Michigan Education Association, the state’s biggest teacher union, is digging in for what may be the fight of its political life.
“In cutting $6.3 billion in school property taxes without providing replacement dollars, the legislature has acted for the sake of political expediency rather than what’s good for children,” complained MEA president Julius Maddox.
Ironically, the MEA supported the repeal when in was in the Senate in an effort to embarrass Engler. But when it passed the Senate, the MEA could not block its passage in the House.
The debate will come as Engler prepares his 1994 re-election bid and Democrats try to regain control of the governor’s office. Even in a politically sterile atmosphere, reworking the school finance system would be an awesome task. The approach of an election year and the prospect of schools not opening right before the election may not help matters.
“My major concern is that it not get political and get tied up in the election,” said state Sen. Fred Dillingham, a Republican from Fowlerville. “But my fear is that’s where it’s headed.”
