Michigan Votes Forum

Introduced in the House on March 18, 2003, the House version of the FY 2003-2004 K-12 school aid budget, with $12.5 billion in gross spending. The amount expected to be spent in the 2002-2003 school year is $12.545 billion. The budget increases the minimum per-pupil foundation grant to $6,700, an amount which had been reduced in the 2002-2003 school year due to revenue shortfalls. The House version includes $198 million in general fund revenue which the governor had proposed replacing with savings realized from an accounting change, and assumes savings of $134.5 million in savings to be achieved by refinancing borrowing by the school bond loan fund, rather than savings of $100 million proposed by the governor. It leaves in place the current school pupil count formula the governor had proposed revising. (The revision would save $40 million by sending more to schools with falling enrollment and less to those which are growing.) The House also restores funding for a contract with Standard & Poor's to analyze and publish school performance data which was cut in the executive budget proposal, increases the monetary incentive for school districts to merge, cuts 25-percent from grants to encourage smaller class sizes, and makes various other revisions in smaller budget items. The budget retains the $6,700 minimum foundation grant proposed by the governor. (Note: Gov. Granholm’s proposed budget for this department is House Bill 4419 .)Much more information on Michigan’s budget is available at Hot Topics: Michigan’s Budget Challenge at www.mackinac.org/4964

The vote was 60 in favor, 44 opposed and 5 not voting

(House Roll Call 83 at House Journal 31)

Click here to view bill details.

Reps. Waters, Accavitti, Minore, Gillard, Tobocman, Dennis, Hunter, Anderson, Zelenko, Hopgood, Condino, Byrum, Reeves, Elkins, Law and Farrah, having reserved their right to explain their protest against the passage of the bill, made the following statement:
"Mr. Speaker and members of the House:
I voted no to House Bill 4401 (H-1) because it is not a balanced budget, and it is fiscally irresponsible to continue expending funds we simply do not have. Our State is facing a fiscal crisis, and it is time to make tough decisions to
fix the structural deficit. The time of living beyond our means is over. This budget is based on pie-in-the-sky revenue estimates of savings
from refinancing of the School Bond Loan Fund. This creates a $38.7 million hole in this budget.
Further, the swap of Revenue Sharing funding for GF/GP funding takes money from a general fund that has no more money to give. Additionally, at a time when Wall Street has put Michigan on its "watch list" for credit ratings, putting
the general fund at risk will mean our bond rating probably will be downgraded. This will cost the State even more money. While I would love to restore funding to all of the educational programs within this budget, it is simply not possible. We must be fiscally responsible, or we risk mortgaging our children's future. Therefore, I voted no on this bill."

Rep. Vagnozzi, having reserved the right to explain his protest against the passage of the bill, made the following statement:
"Mr. Speaker and members of the House:
I voted NO on HB 4401 because it represents fiscal irresponsibility in that it contains some $240 million in
expenditures not supported by revenues. This type of "vodoo" economics practiced in the near past is what got the state in trouble resulting in deficits of over $2-billion in our current budgets. We are not the federal government that can run up deficits without limits. The state must have a balanced budget. This bill violates that requirement and would cause us problems down the road."

Rep. Meisner, having reserved the right to explain his protest against the passage of the bill, made the following statement:
"Mr. Speaker and members of the House:
Today I joined with my Democratic colleagues in taking a stand for fiscal discipline. Governor Granholm sent the Legislature a balanced budget, yet the K-12 Education bill we considered today had $38.7 million hole in it. The days of spending without regard to our budgetary constraints are over. We must operate within our budget to dig our way out of the $1.8 billion deficit we face. Trading Revenue Sharing funding for GF/GP funding takes money from a general fund that has no more money to give. What's more, at a time when Wall Street has put Michigan on its "watch list" for credit ratings, putting the general fund at risk will mean our bond rating probably will be downgraded. This will cost the State even more money."

Rep. Spade, having reserved the right to explain his protest against the passage of the bill, made the following statement:
"Mr. Speaker and members of the House:
I voted no on House Bill 4401 (H-1) because at this time it is not a balanced budget, and it is fiscally irresponsible to continue expending funds we simply do not have. Our State is facing a fiscal crisis, and it is time to make tough
decisions to fix the structural deficit. The time of living beyond our means is over. This budget is based on pie-in-the-sky revenue estimates of savings from refinancing of the School Bond Loan Fund. This creates a $38.7 million hole in this budget. Further, the swap of $198 million in Revenue Sharing funding for GF/GP funding takes money from a general fund
that has no more money to give and creates an additional hole in the budget. Additionally, at a time when Wall Street has put Michigan on its "watch list" for credit ratings, putting the general fund at risk will mean our bond rating probably will be downgraded. This will cost the State even more money. While I would love to restore funding to all of the educational programs within this budget, it is simply not possible. We must be fiscally responsible, or we risk mortgaging our children's future. Therefore, I voted no on this bill."

Rep. Adamini, having reserved the right to explain his protest against the passage of the bill, made the following
statement:
"Mr. Speaker and members of the House:
I voted no to House Bill 4401 (H-1) because it is not a balanced budget, and it is fiscally irresponsible to continue expending funds we simply do not have. Our State is facing a fiscal crisis, and it is time to make tough decisions to
fix the structural deficit. The time of living beyond our means is over. This budget is based on pie-in-the-sky revenue estimates of savings from refinancing of the School Bond Loan Fund. This creates a $38.7 million hole in this budget.
Further, the swap of Revenue Sharing funding for GF/GP funding takes money from a general fund that has no more money to give. Additionally, at a time when Wall Street has put Michigan on its "watch list" for credit ratings, putting
the general fund at risk will mean our bond rating probably will be downgraded. This will cost the State even more money. Furthermore, this budget only provides an additional funding amount of $4,000,000 for Declining Enrollment
districts, which is 33% less than from previous years. This funding decrease affecting predominantly rural districts is unacceptable. While I would love to restore funding to all of the educational programs within this budget, it is simply not possible. We must be fiscally responsible, or we risk mortgaging our children's future. Therefore, I voted no on
this bill."

Rep. Bieda, having reserved the right to explain his protest against the passage of the bill, made the following statement:
"Mr. Speaker and members of the House:
While I would love to restore funding to many of the educational programs within this budget, with the State's current budget mess, this is simply not possible. Michigan is facing a fiscal crisis, and it is time that we roll up our sleeves and make the tough decisions to fix the structural deficit we have inherited. I voted against this budget bill because it is based on unrealistic revenue estimates of savings from refinancing of the School Bond Loan Fund. Putting the general fund at risk at a time when Wall Street has put Michigan on its "watch list" for credit ratings will most likely result in a serious degradation of Michigan's bond ratings-costing our taxpayers even more money. Again, this legislature has failed to squarely address the problem facing all of us in the face-this time to a tune of almost $40 million dollars. The swap of Revenue Sharing funding for GF/GP funding takes money from the general fund that has no money to give. In other words, the legislature is writing another bounced check. And the losers are the school children, teachers
and taxpayers of this state."

Who dares to deny a parent the right to choose their childs education? We don't want children assigned to a school we want to choose any school with our own tax credit money following the child. It is not the State's business to decide what education is best for our children!

I cannot believe what I just read. Did the Governor propose to send more to failing schools and less to growing schools? That is the exact opposite of the Free Enterprise system that has stood the test of time and Constitution. This bill isin't good enough. We are still rearranging chairs on the Titanic. Schools talk of rules and resources but they are not held to the Free Enterprise standards of incentives. To the winner go the spoils!!! The public school system is a failure because it has no incentive to compete in the real market. The parents need to control the money through universal tuition tax credits (machinac.org) and send their child to ANY school of their choice with their taxpayer money credit following the money. Then we can deal with real issues, real education and not rearranging a 12.5 BILLION budget that has 80% of prisoners in jail illiterate after attending public schools!!!

The Carnegie program called Turning Points Educating American Adolescents for the 21st Century says all teens are "at risk" How do you parents feel about that nannyism. Cut taxes and spending so that these 0-5 year-olds can stay home with their moms.Do the research.

Shame on 100% of Democrats who voted against taxpayers and for educrats.It's time for education to enter the free-market system and stop the siphoning of taxpayer money in special "rainy-day" funds that would have a continuous open spigot to our wallets by stopping tax cuts or increasing taxes.

If those monies could be sent to each family who wish to home school $7000 per child instead of paying high perks and privileges to omniscient administrators we would have better educated children. A home school or private academy can better spend the money than our corrupt arrogant existing public school system. For about 500 dollars a college prep home school curriculum can be purchased. By the time a child is 16 that child could have an associates degree from a community college. Also a person can by provide healthier lunches than our current school system of junk food that is void of nutrition. We could take field trips to museums and better manage the funds better than our existing school system.
What are we waiting for? Write your legislators and lets disband the system that is leaching off us.

ssjake@japanimation.com

Senator Cropsey, under his constitutional right of protest (Art. 4, Sec. 18), protested against the adoption of the amendment offered by Senator Switalski and moved that the statement Senator Sikkema made during the discussion of the amendment be printed as his reason for voting "no."

The motion prevailed.

Senator Sikkema's statement, in which Senator Cropsey concurred, is as follows:

I rise to oppose this amendment. I just want to make a couple of observations. As the chairman of the subcommittee pointed out, we already have two rainy day funds for K-12 education. The School Aid Fund, in fact, acts as a rainy day fund because in normal years, we carry a balance in that fund. In fact, if you look to the decade of the '90s, there were a couple of years where the balance in that fund carried over from one year to the next amounted to $5 million, $6 million, $7 million, and even $8 million. It is only in these lean years that we're experiencing right now where there isn't one.

My point is that the School Aid Fund is in essence a rainy day fund. That's rainy day fund No. 1 is for K-12 education--totally dedicated to K-12 education. The second rainy day fund we have for K-12 education is called the Budget Stabilization Fund. That also has been used in the past as a rainy day fund for public schools. In fact, we have used it that way in the last couple of years, and it works very well. I would submit that we don't need a third rainy day fund for K-12 education.

Now let's just go back to a few weeks ago when there was a shortfall in funding for K-12 education, and there was a proration order issued by the Governor, according to law. The problem was not that we didn't have a rainy day fund for schools. The problem was we didn't have any money in the rainy day fund for schools. And the solution is very simple. You put money in the two rainy day funds that we have. Now, if you remember just a few short weeks ago--and that is the May revenue estimating conference--we were faced with that very similar prospect. There was a $61 million shortfall in the current School Aid Fund which would have triggered another proration order. But this Senate in its wisdom said, "Hey, wait a minute; we are not going to do that. We are going to immediately transfer $61 million"--essentially borrowing it from next year to shore up K-12 education. So we, in fact, shore up K-12 education without rainy day fund No. 3.

So the problem is not that we don't have a rainy day fund for K-12 education; we have two of them. The problem is we don't put money in each one of those, and that's what we need to do. So I would hope that we would oppose the amendment. If you look over the history of how we have protected K-12 education in these severe economic times, we've clearly made that a priority, we've met our obligation, and this idea is basically a solution looking for a problem.

Let me just make one final point. There has been a suggestion that if you put money in a rainy day fund, it helps maintain the AAA bond rating the state enjoys, which is very important. It is good for the state expenditures, it is good for school expenditures, and I even think it is good for municipal expenditures. I would submit to you that a multi-purpose rainy day fund, which is what the BSF is, is far more protective of that bond rating than a narrowly construed rainy day fund. From a Wall Street perspective, there can be more than just a school funding emergency or shortfall in the state. The more narrow you define a rainy day fund, I think the more you put in question where you can deal with a lot of different financial problems, rather than just one financial problem.

So there are a lot of reasons why this amendment and this idea really isn't necessary, and I think in one respect at least counter productive. So I would oppose the amendment.

Senator Sikkema's statement is as follows:

I rise to oppose this amendment. I just want to make a couple of observations. As the chairman of the subcommittee pointed out, we already have two rainy day funds for K-12 education. The School Aid Fund, in fact, acts as a rainy day fund because in normal years, we carry a balance in that fund. In fact, if you look to the decade of the '90s, there were a couple of years where the balance in that fund carried over from one year to the next amounted to $5 million, $6 million, $7 million and even $8 million. It is only in these lean years that we're experiencing right now where there isn't one.

My point is that the School Aid Fund is in essence a rainy day fund. That's rainy day fund No. 1 is for K-12 education--totally dedicated to K-12 education. The second rainy day fund we have for K-12 education is called the Budget Stabilization Fund. That also has been used in the past as a rainy day fund for public schools. In fact, we have used it that way in the last couple of years, and it works very well. I would submit that we don't need a third rainy day fund for K-12 education.

Now let's just go back to a few weeks ago when there was a shortfall in funding for K-12 education, and there was a proration order issued by the Governor, according to law. The problem was not that we didn't have a rainy day fund for schools. The problem was we didn't have any money in the rainy day fund for schools. And the solution is very simple. You put money in the two rainy day funds that we have. Now, if you remember just a few short weeks ago--and that is the May revenue estimating conference--we were faced with that very similar prospect. There was a $61 million shortfall in the current School Aid Fund which would have triggered another proration order. But this Senate in its wisdom said, "Hey, wait a minute; we are not going to do that. We are going to immediately transfer $61 million"--essentially borrowing it from next year to shore up K-12 education. So we, in fact, shore up K-12 education without rainy day fund No. 3.

So the problem is not that we don't have a rainy day fund for K-12 education; we have two of them. The problem is we don't put money in each one of those, and that's what we need to do. So I would hope that we would oppose the amendment. If you look over the history of how we have protected K-12 education in these severe economic times, we've clearly made that a priority, we've met our obligation, and this idea is basically a solution looking for a problem.

Let me just make one final point. There has been a suggestion that if you put money in a rainy day fund, it helps maintain the AAA bond rating the state enjoys, which is very important. It is good for the state expenditures, it is good for school expenditures, and I even think it is good for municipal expenditures. I would submit to you that a multi-purpose rainy day fund, which is what the BSF is, is far more protective of that bond rating than a narrowly construed rainy day fund. From a Wall Street perspective, there can be more than just a school funding emergency or shortfall in the state. The more narrow you define a rainy day fund, I think the more you put in question where you can deal with a lot of different financial problems, rather than just one financial problem.

So there are a lot of reasons why this amendment and this idea really isn't necessary, and I think in one respect at least counter productive. So I would oppose the amendment.

Senator Jelinek's statement is as follows:

I would point out that we do have a rainy day fund. It's called the School Aid Fund balance, and as money is available, we have it in the School Aid Fund balance. I don't know that it's necessary to label it rainy day fund. I have heard of the proposal about the school aid rainy day fund, but I haven't seen the mechanism. What are the triggers? Is there a ceiling or a bottom? How can it be used? How can it be taken out when needed?

So I would discourage this amendment. I am not sure that the dollars are meant to or are going to end up in the School Aid Fund. If they do, that's great, but I think they have to be appropriated for that purpose first. So I would discourage this amendment.

Senator Switalski's statement is as follows:

I think K-12 education should be a nonpartisan issue. I also think for the most part we've done that here. I think a lot of the members would agree with what this amendment does. It is really prudent with our money. We've all heard about the $655 million federal windfall that we are going to get. We know that $317 million of that will go exclusively for Medicaid. That leaves about $338 million.

In this budget, we have had to use $108 million of that because of the consensus revenue conference and another $61 million because of this year's shortfall in the consensus revenue conference. That still leaves $167 million. What this amendment does is appropriate $98.4 million of that and puts it into a rainy day fund for K-12 education. I think that is the prudent thing to do. We may have a shortfall in this upcoming budget year, and we've got a lot of one-time money in this budget already.

I know there is $300 million just in the refinancing of the school bond loan funds and the revenue sharing account. So I hope members will do what is prudent, and let's set aside some of this money in a savings account to fund K-12 Education and avoid a future proration.

Senator Emerson's first statement is as follows:

What we have here is an amendment that fully restores funding for school readiness programs. Those are programs that ensure that poor children are coming to school ready to learn--its 4- and 5-year-olds--ensuring that they have pre-school programs. It restores 21st century money, which is after-school programs, to ensure kids who do not have full access to mentoring and tutoring programs, have access to those programs. And it adds money for adult education. It takes this money from section 20j of the School Aid Fund and Section 20j, for those of you who don't know, is a section of the School Aid Fund that provides money to the wealthiest school districts in the state of Michigan. What we have is a provision that was not there when Proposal A passed. What we said to the wealthiest school districts in this state at the time we passed Proposal A is that they could go out and ask their local voters for increased millage to ensure that they kept their foundation allowance where it was before we passed Proposal A, but it would be above the foundation allowance that was established under Proposal A.

That foundation allowance was originally that $1,500 amount between $5,000 and $6,500. So those school districts that had a foundation allowance above $6,500 at that time could go out and ask their voters to increase their millage to give them $8,000, $9,000, or $10,000--whatever they were getting before Proposal A passed.

We also passed as part of Proposal A a provision that said you could only raise property taxes in subsequent years equal to inflation or 5 percent, whichever was less. So in the last few years where inflation has been very, very low, we created section 20j to ensure that those school districts that are at the very, very top end of the scale outside of the foundation, the basic foundation grant, those schools would get some additional money from the state to make up for the fact that they could not raise property taxes as much as the foundation allowance increase would have granted them. So we made up for the taxpayers not having to tax themselves but held them harmless for many cuts. We have heard a lot of discussion this year about fairness and priorities and as we make budget cuts, we need to figure out what are priorities are, and how to make those priorities fit with our whole concept of what is fair. I guess when I look at cutting school readiness programs, which are pre-school programs for poor children; when I look at after-school programs being cut; when I look at adult education being cut, and I see us still providing money to school districts all of whom have fund balances that range up to $40 million. The one with the largest fund balance is Troy School District of whom we give about $4.5 million to, has a $40 million fund balance. Others have $29-$30 million fund balances. So the question becomes, as we are making cuts here, where should we make cuts in order to be fair to the citizens of the state of Michigan? In my mind, it certainly seems that when we talk about fairness and equity, our intent was never to enrich those school districts from money that could legitimately be used both for the foundation allowance and other categoricals. So I would encourage members to support this amendment.



Senator Emerson's second statement is as follows:

I don't think the promise of Proposal A was ever to hold those at the top forever harmless from any of the effects of the other parts of Proposal A. However, I would like to withdraw this amendment.



Senator Emerson's third statement is as follows:

I am not quit sure I understood some of the Majority Leader's arguments here. First, he argued we don't need a rainy day fund in the School Aid Fund, because the School Aid Fund is in itself a rainy day fund. Well, I would ask, why do we need a Budget Stabilization Fund because if you carry out the same logic and say that every year, especially in the '90s, we carried forward a balance in the General Fund?

So the General Fund doesn't need a budget stabilization if you buy that argument. However, we have found in times that if we did not or had not transferred money into the Budget Stabilization Fund, we would have spent it. While you would have argued that those of us on this side of the aisle would have been the ones spending the money, I think we have found over the years we all figure out ways to spend money if it's there and not transferred into a rainy day fund where we impose a little self-discipline on ourselves.

I would argue that it makes sense to have a school rainy day fund because I think after the passage of proposal A, we did change the landscape here in Michigan and the financial landscape because we now are responsible for 90 percent of the funding of schools, and that funding for schools essentially equals the General Fund budget of the state of Michigan. I think there ought to be an additional safeguard and additional self-discipline imposed upon us.

So I would encourage people to vote "yes" on this amendment. If not "yes" on this amendment, I would encourage people to take up Senator Switalski's legislation that would create this fund. I think if you look at this amendment, it does exactly what the Majority Leader said we should be doing. He said we should be putting money aside, and that's the real issue here, not whether we ought to create a separate fund.

Well, I think the separate rainy day fund within the School Aid Fund makes perfects sense, and what this amendment does is actually take $98 million of the federal money and put it into that rainy day fund. So we are doing in this amendment exactly what he asked us to do. That is to put money into that fund to ensure that we have money to take care of problems in the future.

39.3 million to buy computers for sisth graders?It would be better spent replacing their politically correct textbooks with research based quantitatively proven excellent curriculum based on national standardized tests.Saxon math is an example of proven excellent curriculum when its methodology is followed in traditional schedules. Get rid of educational fads such as the proven 2-10% harmful block schedules. What a waste of taxpayer money.

Rep. Meisner, having reserved the right to explain his nay vote, made the following statement:

"Mr. Speaker and members of the House:

It is with great pain that I vote against HB 4401, the conference report on the K-12 budget for the next fiscal year. The reason I can not support this bill, despite its many benefits - and there are many - is because it represents the abandonment of our adult and community educational system and poor public policy. We need to face the fact that not everyone follows the traditional path. Some are deterred from that path by their own actions and some by the actions of others. Adult education is a cost-effective way to help these people get back on track. The alternative, an alternative which the Legislature today seems to favor, is to spend this money and much more on dealing with these people when they can't get a job. When they turn to a life of crime and now we're spending ten times more than we could have on incarceration."

Rep. Farrah, having reserved the right to explain her nay vote, made the following statement:

"Mr. Speaker and members of the House:

I voted no on House Bill 4401 CR-1 because of the tremendous cut to the Adult Education Program. I realize that we must make tough decisions to make it through this fiscal crisis; however, adult education is more than an education program. It is a prevention program. If we do not help these individuals who wish to help themselves become contributing members of society, then we will end up paying for them in the future in corrections costs. Adult Education is cut from $77.5 million to $20 million in this conference report. Because of the devastating effect of this cut, I voted no on House Bill 4401 CR-1."

Rep. Tobocman, having reserved the right to explain his nay vote, made the following statement:

"Mr. Speaker and members of the House:

I voted no on House Bill 4401 CR-1 because of the tremendous cut to the Adult Education Program. I realize that we must make tough decisions to make it through this fiscal crisis; however, adult education is more than an education program. It is a prevention program. If we do not help these individuals who wish to help themselves become contributing members of society, then we will end up paying for them in the future in corrections costs. Adult Education is cut from $77.5 million to $20 million in this conference report. Because of the devastating effect of this cut, I voted no on House Bill 4401 CR-1. In addition, the bill fails to live up to the commitment made to the Detroit Public Schools at the time that the elected School Board was removed and a Reform Board was put into place. This bill will deprive Detroit Public School children from funds that have been committed to their education."

You don't want the State to choose the school for your child - you want the LIBERTY (remember that word?...) to choose for yourselves. And yet, you want the State to step in and make morale decisions for the citizens, so people like you can feel that 'oh so false, sense of security'. You'd better decide how you really want to live - in oppression?...or freedom? It's one or the other, sister - the more you put on the State's shoulders - the more freedom you throw away. And yes - as hard as it might be to accept, it is risky to be alive...always has been - always will be.

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