Local Districts To Ask Voters To Increase Special Education Millage Again
By Amy Polk

As summer slides into the school year this week, school funding issues remain unsettled. This fall, local districts will again ask voters to increase special education funding, and Michigan legislators will debate a school funding proposal that addresses perpupil funding inequities and needs unique to certain districts.

A 0.75-mill tax increase to boost special education funding in the Eastern Upper Peninsula will be on the ballot November 6. The Eastern Upper Peninsula Intermediate School District (ISD) filed the petition Tuesday, August 28, to levy 0.75 mills on homestead and non-homestead property.

It is the same proposal voters rejected in May, 3,309 to 2,924, and would raise about $1.4 million over three years.

Increasing the special education millage from its current 0.77 mill to 1.52 mills will help maintain the level of special education services local schools now provide, said ISD Superintendent Pete Everson, and leave more general fund money in those districts to spend on other things.

The ISD board voted unanimously to send the proposal back to voters at a meeting August 8. If passed, the ISD will distribute the money to Eastern Upper Peninsula schools, from $3,700 to as much as $445,000, depending on the level of special education services each school provides. Districts spend the most money to educate students with cognitive impairments (formerly called mental retardation) and severe multiple impairments.

Mildly impaired students comprise the highest percentage of Eastern Upper Peninsula students needing special education services, said Sue Kabat, assistant superintendent for special education at the ISD, and they represent a steadily growing cost to the district. The Eastern Upper Peninsula collects and spends about $166 per pupil (in addition to the per-pupil foundation allowance) for special education.

Legislative School Funding Bill

On another front, the Michigan Legislature is attacking the foundation allowance. Mr. Everson said current school funding practice of assigning the same perpupil allowance for students everywhere in the state does not address unique challenges some districts face. Rural transportation can cost more per pupil than city bussing, for example.

The 2005-2006 Upper Peninsula Transportation Study Mr. Everson compiled is helping convince lawmakers to recognize extra costs to rural districts like those in the Upper Peninsula, and why Michigan's public school funding should not remain a "onesize fits-all" system.

The Michigan House of Representatives adopted a budget last week that gives more state aid to rural districts like Tahquamenon Area Schools at Newberry, where school buses cover more square miles than any other school district east of the Mississippi River, Mr. Everson said. Tahquamenon buses travel across 1,281 square miles, racking up transportation costs of $610,842 during the 2005-2006 school year, according to the Eastern Upper Peninsula ISD's Transportation Study. Pickford Area Schools, by comparison, collect students from a 212-squaremile area, costing the district $212,758. Pickford has about three students per square mile and Tahquamenon has about one student per square mile.

Other Upper Peninsula districts with high transportation costs include Marquette Public Schools, which spent $1.3 million on transportation in 2005-2006, Escanaba, which spent $1.17 million, Sault Ste. Marie, which spent $761,257, and Gwinn, which spent $699,340.

Transportation is paid by the general fund and competes against other education programs.

In addition to providing money to offset transportation costs, the latest House School Aid Fund budget calls for a $100 increase in the per-pupil foundation allowance and a $100 "equity payment" to districts getting $7,600 or less through its per-pupil foundation allowance. The bill would also provide more declining enrollment money for districts losing students, and more money for early childhood education programs. The "equity payments" are intended to bridge the gap between the schools with lower foundation allowances and districts with higher per-pupil funding.

Some Michigan districts receive more than the minimum foundation allowance of $7,085, but 88% of EUP schools receive only the minimum allowance.

"This is the first time we've ever recognized the unique costs of rural and Upper Peninsula school districts," State Representative Gary McDowell of Rudyard told The St. Ignace News, although he admits there is no additional revenue in state coffers to finance the budget increase.

The House School Aid Fund budget proposal would increase public school funding by 2.3%, or $300.2 million more over last year's statewide education budget of about $13 billion, Mr. Mc- Dowell estimated.

"We're going to have to find that money somehow to increase our investment in our schools," Mr. McDowell said. "We're going to have to raise revenue somehow. Michigan's public school system is the backbone of our state's economy."

Public Education

Funding Dwindles

Like many in Michigan, Mr. McDowell believes investing in schools is an investment in the state's future, but he recognizes how Michigan's struggling economy is not providing the additional revenue needed to give more to schools.

Michigan's public education fund is filled by sales, income, property, use, tobacco, and real estate transfer taxes. Lottery sales and miscellaneous revenues comprise the balance. Of the various sources contributing to the State Education Fund, Michigan sales tax contributes the most. Last year it pumped $5.1 billion into the state's $13 billion education fund. State Education Property taxes, the six mills levied against all Michigan properties, added $2.1 billion, while income tax provided another $2.1 billion. When retail sales in Michigan are slow, or Internet stores don't collect Michigan's sales tax, there is less sales tax money to give to education, Mr. McDowell added. The salary cuts, business closures, and job eliminations Michigan has experienced in recent years are taking a toll.

"The thing that really hurt us last year were the real estate sales," he said of the real estate transfer tax fund. "The real estate market was slow, so people weren't really buying and paying that transfer tax."

Lottery revenues have been creeping up, contributing $695 million to the education fund.

The legislature is scheduled to finish the 2007-2008 fiscal year budget by the end of September and adopt it before the new fiscal year starting October 1.

Schools are supposed to receive their first checks from the State Education Fund in October, and local schools have already adopted their budgets based on last year's per-pupil allowances. Despite warnings in the spring that allowances would be cut by as much as $125 because of the state's funding crisis, Michigan avoided the cuts by transferring some of its deficit into the next fiscal year. Michigan's 2006-2007 deficit was $1.2 billion. The 2007- 2008 deficit is projected to grow to $1.8 billion.

Whether all or any of the latest school funding proposals will be adopted remains to be seen. The House recommendations must get Senate approval, and final adoption by Governor Jennifer Granholm. Mr. Everson is hopeful that his work on the Upper Peninsula Transportation Study will pay off, and that the state will at least provide more money to offset transportation costs in some form. A separate transportation assistance proposal was made in the spring, and now rolled into the House school budget proposal. The issue of transportation is getting more attention from legislators seeking creative ways to send money to schools within the constraints of Proposal A. "We're really positive about that," Mr. Everson said.