Legislative Update for the Week of March 19, 2007

SENATE KILLS REVENUE PLAN, CUTS SCHOOLS

Negotiations with the Governor and the Democratic-led House having stalled, Senate Republicans pushed through a budget-balancing plan today for the current fiscal year that cuts schools by $34 per student

The Senate approved a plan which reduces the overall school aid budget by $377 million, but just $54 million of that in reducing the per pupil allowance for schools.  Mr. Bishop said the proposal was able to save categorical payments, which he said school superintendents preferred to see saved.

To stamp an exclamation point on their insistence that the $942 million hole in the Fiscal Year (FY) 2007 budget can be filled with no tax increases, the Republicans shot down the Governor's 2-cent sales tax on services and proclaimed throughout the day that tax increases for 2007 were "off the table."

In reality, the Republican-led Senate and the Democratic administration are only about $320 million apart in solving the FY 2007 budget.Republicans approved Granholm's $344 million executive order. All but $70 million of the $377.4 million in the changes made to the School Aid Fund were suggestions the governor made last month.

The real difference between the two sides boils down more to process. Granholm and the Democratic-controlled House want to bundle the FY 2007 and FY 2008 shortfalls with the hole left by the soon-to-be-eliminated Single Business Tax (SBT). Combined, Granholm called the budget hole a $3.4 billion problem.
 
The Republican bill, opposed by all Senate Democrats as well as one Senate Republican, means immediate cuts in funds for the current school year for every school district in the state.  Below is a detailed breakdown of the cuts to education:

PSERS Assets:  Mark to Market (175.6)

PSERS: Interest on accrues Liability (86.4)

Eliminate Various Categorical Grants (5.0)

Refinance Durant and School Bond Loan Debt (40.5)

Reduce Lottery Advertising and Shift Revenue to School Aid (10.0)

Reduce Foundation by $34 (57.4)

Reduce ISDs(2.5)

Appropriations Reductions(377.4)

In tough economic times, when it is critical to invest in our people and our economic future and prepare for the knowledge-based jobs that will grow Michigan's economy, the legislature refused to support a revenue plan. Instead, they want to cut education first.

We cannot afford to slash investments in education at the exact moment when the economy demands this kind of investment to ensure our state is competitive. Michigan needs a comprehensive, lasting solution.  If you have not contacted your lawmakers yet please CLICK HERE to do so. 

2007 Legislative Conference - April 26, 2007

The Crisis Continues: Hold Lansing Accountable!

Registration is now open for the Fourth Annual Legislative Conference, jointly hosted by MASB and the Michigan Association of School Administrators (MASA). Register today and reserve your spot at the 2007 Legislative Conference. CLICK HERE TO REGISTER