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Snyder criticized in school aid move

Feb 11, 2013 by

Lansing — For the third year in a row, Gov. Rick Snyder’s budget is balanced by diverting nearly $400 million from a fund normally reserved for K-12 public schools to fund community colleges and four-year universities.

Snyder’s usage of School Aid Funds to make appropriations to community colleges and universities historically funded by the General Fund is a source of ire for public school leaders who contend that the Republican governor is raiding their revenue source to meet obligations elsewhere in state government.

Though former Gov. Jennifer Granholm once dipped into the School Aid Fund for year-end budget balancing, year-after-year use of the fund for appropriating money to community colleges and universities is a new trend, said Kyle Jen, deputy director of the nonpartisan House Fiscal Agency.

“I consider this a shell game — you pull from K-12 education to shore up a General Fund that doesn’t have as much money as a School Aid Fund,” said William Mayes, executive director of the Michigan Association of School Administrators.

Michigan’s Constitution allows School Aid Funds to be used “exclusively for aid to school districts, higher education and school employees’ retirement systems.”

“I’m just following the constitution,” Snyder told The Detroit News Editorial Board on Friday. “I don’t fully understand why people make such a big deal out of that.”

The diversion of $400 million from the School Aid Fund for community colleges and universities is the equivalent of $260 per pupil for cash-strapped school districts this year.

“What it did is in effect hurt public education by $400 million,” Mayes said.

Snyder’s Democratic critics say the annual diversion is a side effect of the Republican governor cutting business income taxes, which help support the state’s $9.3 billion General Fund.

“I think is a direct result of giving a $1.8 million tax cut to businesses, and we had to find the money somewhere, and we took it out of the mouths of children and out of classrooms,” said Rep. Vicki Barnett, D-Farmington Hills. Barnett said giving universities and community colleges School Aid Funds, which include sales and income taxes and proceeds from the lottery, violates “the general understanding” voters had in 1994 when they overhauled public school funding through Proposal A.

But Rep. Joe Haveman, chairman of the House Appropriations Committee, doesn’t understand the fuss. He said in past years lawmakers haveusedGeneral Fund dollars to shore up deficits in theSchool Aid fundto stave off education funding cuts”and nobody seemed to complain.”

“It’s a little disingenuous to complain when it goes the other way,” said Haveman, R-Holland. “Forgetting where (the money) comes from or where it goes, I think we’ve made valid investments in education.”

The proposed 2013-14 fiscal year budget Snyder submitted to lawmakers Thursday takes $200 million from the $11.4 billion School Aid Fund to supplement a $1.43 billion appropriation for Michigan’s 15 public universities.

To provide the state’s 28 community colleges with about $336 million next fiscal year, Snyder proposes getting 59 percent of the money from $198 million in School Aid Funds.

During Snyder’s first two budget cycles, the 2011-12 and 2012-13 fiscal years, he’s gotten the Legislature to spend about the same amounts annually from the School Aid Fund for higher education institutions, Jen said. “He made a reduction in appropriations on the School Aid Fund and effectively moved that money over to the General Fund side to help balance out the budget,” Jen said.

In Granholm’s second term, her administration used $208 million from the School Aid Fund to balance a deficit in the General Fund and applied the money toward community colleges, Jen said. Community colleges went along with the accounting gimmick in 2010.

“We often say we were the plumbing through which this was flushed,” said Mike Hansen, president of the Michigan Community College Association. “We didn’t condone it. We didn’t support it. It was just an accounting switch on the books.”

But after hearing an outcry from public schools over the past two years, Hansen said, “we don’t want to be part of the K-12 School Aid Fund.”

Universities are more focused on reversing a decade of $1 billion in state funding cuts, said Mike Boulus, executive director of the President’s Council, State Universities of Michigan. “Where the money comes from for us is a nonissue, it’s all green,” Boulus said. “If there was exclusivity, it would have been written into the constitution.”

Tom Watkins, a former state superintendent of schools under Granholm, said Snyder’s philosophy that funding public education should span preschool to college is the right approach.

via Snyder criticized in school aid move.

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