The Michigan Education Association’s official position on spending Fund Equity in response to the K-12 funding challenge says it better than I could. They acknowledge it is a “band-aid.” The leadership of the Grosse Pointe Education Association would be well served by not cherry picking the position of the MEA and taking a long-term view for the well-being of the Grosse Pointe Public School System.
I’ve written about Fund Equity previously and we need to revisit the topic now.
The topic got statewide attention last week when the House Education Committee Chairman, Rep. Tim Melton, sponsored legislation that would not allow K-12 school districts to maintain fund equity levels greater than 15% of their budget.
To provide some context for Grosse Pointe Public Schools, our Fund Equity is about 17% of our $105,000,000 General Fund budget. So this bill would require us to spend $2,500,000. To put THAT into context, our projected budget shortfall for next year is about $7,500,000. So this would amount to Lansing “helping us solve” 1/3 of our problem.
So in the grand scheme of things, is this that significant? After all, we DID spend $2,600,000 of our fund equity in October 2009. Did our problem go away? Of course not. Spending more to mask rising salary, health care, and retirement costs never solves the problem. But here is the significance of these discussions:
- By taking this action, Lansing is acknowledging that 15% is an appropriate level of Fund Equity. The leadership of the Grosse Pointe teachers union, the GPEA, disagrees. They have publicly advocated that Grosse Pointe’s Fund Equity levels should be reduced to 7%. This provides their justification to fund additional annual raises (on top of the standard steps and lanes) of nearly 6% over the next three years. Why would they think this way?
- The GPEA is an affiliate of the Michigan Education Association (the MEA). The MEA’s lead economist, Ruth Beier, testified in Lansing in support of this bill. This is no surprise. But what is more significant? The MEA thinks 15% is too high. They believe 5% is the right amount. So the leadership of the GPEA is more fiscally conservative than the MEA…by2%. So we’ve got that going for us.
- Of greatest significance is that the MEA acknowledged that even spending fund equity is not a long term solution. The direct quote from Ms. Beier is, “While we (the MEA) support this bill, we know that this is a short term solution. It is a band-aid rather than a cure. We caution against relying on this one time fix, and urge the legislature to come up with a way to close the structural deficit in the School Aid Fund.” Ms. Beier, you and I could not agree more on that point.
So the GPEA leadership is dutifully singing from the MEA hymnal locally, but conveniently ignoring the second leg of their proposed “strategy” – one that is dependent on Lansing to solve the long-term problem. The leadership of the GPEA wants the taxpayers of Grosse Pointe to fund nearly 6% of additional raises to those on the top end of the salary scale by using fund equity when the leadership of the MEA acknowledges that without other structural change from Lansing, spending Fund Equity is nothing but a band-aid. How many taxpayers in Grosse Pointe want to buy a $10,000,000 band-aid?
Lansing politicians haven’t shown the skill, will, or resolve to address the K-12 budget problem. The politically convenient solution for them is to kick the can down the road, as they’ve been doing for years. I’m not willing to bet the future of the Grosse Pointe Public School System on a sudden transformation in Lansing.
I’ve asked before and I will ask again. How many of the taxpayers of Grosse Pointe have any faith that Lansing will address the structural deficit in the School Aid Fund that the MEA acknowledges exists? The fact is they either don’t know how to do it, don’t have the will to do it, or are content to let the local school districts solve it on their own. Until I see a shred of evidence to the contrary, I’m betting we need to solve this on our own.
I’ve been saying this for my nearly five years on the Board. This problem is real and it is all ours. There is no back door. There is no way to avoid it. Ignoring it only makes it worse. The responsible school board takes a long-term approach to this problem. Spending $10,000,000 of fund equity to fuel escalating salary, retirement, and health care costs without a pre-identified and agreed upon long-term solution would be nothing short of irresponsible. I believe the taxpayers of Grosse Pointe want the school board to take the long-term view. I’ve written about it before. This is the New Normal. We had better be able to deal with that.
Kudos to my friend and Birmingham Public School’s school board trustee Rob Lawrence for raising this issue in his blog. Rob was able to get the documented testimony on this bill and posted it online. You can see it below with Rob’s comments typed in red within it.