David Hecker
President

Lois Lofton Doniver Secretary-Treasurer

Louise Somalski
Legislative Coordinator

March, 2007

Links to current Advocacy Campaigns
may be found in the Legislative Action Center

State Must Act Quickly to Resolve Fiscal Problems

A recent report from Standard & Poors said that, "Michigan cannot simply grow its way out of this fiscal crisis." They warned that Michigan could see more declines in its credit rating if the Legislature does not act quickly to address the current problems. The report also indicates that Michigan's outlook could return to stable if the Legislature passes a tax restructuring package and acts on other structural budget issues.

Standard & Poors was the only Wall Street rating agency that did not direct action against the state's credit rating in January. At that time Fitch Ratings lowered the state's credit rating and Moody's Investors Services changed the state's outlook from stable to negative. Standard & Poors already had the state on a negative credit outlook, the only state it has ranked as such.

The report specifically said that cutting taxes or providing economic incentives for businesses is not going to create enough revenue to address the current shortfall. The report acknowledged the difficulty in passing the tax proposal and in forecasting its actual effect when imposing a completely new tax on a new revenue stream. Standard & Poors also questioned if the state could make the cuts needed to balance the budget for 2006-2007, and whether the cuts would be palatable and sustainable.

The report makes it clear that the state has a fiscal crisis that cannot be handled by tax cuts and economic growth alone. This is exactly what Governor Granholm told legislators when she made her proposal for a 2-cent tax on services. Michigan is at a crossroads with this fiscal crisis and it requires immediate corrective action.

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AFT Michigan Supports Governor's Budget Proposal

Governor Granholm has presented a reasonable budget proposal that makes a major investment in education with the promise not to make any school funding cuts this year. This package provides the proper balance between investment, budget cuts, reforms and revenue increases. The Governor's 2007 - 2008 proposal contains a 2.5 percent increase in state aid for K-12 public schools, community colleges and universities.

In order to raise the money needed for these important investments, the Legislature must enact key elements of her economic package, including a 2-cent tax on services and a new business tax to replace revenue lost with the repeal of the Single Business Tax. The Legislature must enact these new taxes quickly in order for this package to fix the current year's budget crisis.

If the Governor's tax package is not enacted this spring, the future of public education in Michigan is in jeopardy. Late-year funding cuts will erode the quality of education that our children deserve. Additional cuts will mean larger class sizes, fewer critical educational programs, larger tuition increases, and further reductions in the number of qualified staff to help our students.

Governor Granholm has notified the Senate and House Appropriations Committees that she plans to present her second Executive Order on March 22 aimed at balancing the 2006 - 2007 budget, if an agreement has not been reached by then. Under Michigan's Constitution, the Governor has no other choice than to issue another Executive Order cutting all budgets to eliminate the $900 million General Fund and School Aid Fund deficit.

In the mean time, nothing is scheduled on the Senate on voting on the Governor's Tax package. The bills were discharged from the Senate Finance Committee on March 15. Officials said the vote may be held off while discussions are underway on the budget agreement.

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Senate Budget Proposal Still Looming

Although the Senate Appropriations Committee has rejected Granholm's plan, saying the budget can be balanced without any revenue increases this year, Senate leaders have not made any assurances that education funding will be spared from a list of budget cuts proposed for 2006 - 2007. A recent Senate Fiscal Agency memo listed the following items as potential options to balance the FY 2006 - 2007 budget. This list is being used as a menu of cuts from which Legislators my choose.

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Senate's Potential School Aid Budget Cuts

The following is an alternative plan to eliminate the School Aid Fund deficit by reductions in appropriations:

1. Reduce all non-mandated categorical grants by 46.0%. These include: at-risk, adult education, school readiness, youth challenge, interagency early childhood, great start, bilingual education, special education millage equalization, special education lending libraries, gifted and talented, vocational education, pre-college engineering, and math and science centers: $238,475,638.
   
   
2. Eliminate all funding for new grant programs. These programs include: middle school math, equity payments, declining enrollment, Inkster Public Schools, FIRST robotics, and health/science middle college: $62,275,000.
   
   
3. Eliminate Sec. 20J funding of hold harmless mills for certain schools and allow these school districts to ask the voters to approve an operating property tax increase to make up for the lost revenue: $52,800,000.
   
   
4. Reduce recent funding increases for other grants. These include: adult education, interagency early childhood grants, great start, and math and science centers: $7,174,000.
   
   
5. Eliminate funding for the following categorical grants that have already been placed on hold pursuant to action by the Department of Education. These categorical grants are: Mercy education project, children of incarcerated parents, book a month, early intervening, conductive learning center study, international baccalaureate, Kalamazoo pre-college engineering, automatic external defibrillators, school mapping, positive behavior support and web-based testing: $5,225,000.

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Senate's Potential Community College Budget Cuts A 10.0% General Fund/General Purpose reduction equates to $28,987,900. On the average, GF/GP funding accounts for 22.3% of total Community Colleges operating budgets. The impact of the 10.0% reduction in State appropriations equals a 2.2% reduction in the average operating budget for Community Colleges.

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Senate's Potential Higher Education Budget Cuts

A 10.0% General Fund/General Purpose reduction equates to $162,478,900. The major components of this reduction would include:

1. Reducing funding for all 15 universities, Agricultural Experiment Station, Cooperative Extension Service, Higher Education database, and the King-Chavez-Parks competitive grants by 9.32%: $142,478,900. State appropriations as a percentage of total university general fund revenue are not uniform, and range from 49.5% at Wayne State University to 27.9% at the University of Michigan-Ann Arbor.
   
   
2. The Office of the Auditor General has recommended the establishment of an account payable for unclaimed scholarships in the Michigan Merit Award program. This proposal would eliminate the funding of the accounts payable: $20,000,000.

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Budget Talking Points

• Funding for our public schools has been prorated twice and programs including adult education and gifted and talented programs have been cut, totaling more than $500 million.
  
  
• Higher education funding has been cut by more than $250 million, forcing students and their families to endure double digit rate increases.
  
  
• Despite these difficult cuts, Michigan's budget is more than $3 billion short of the revenue it needs to provide the current level of services over the next year.
  
  
• The state has cut $240 million, or 15% of funding for universities in just 18 months.
  
  
• The School Aid Fund is $377 million short equaling approximately $224 per student cut.
  
  
• General Fund shortfall is reported at $442 million. (Note: This fund provides money for higher education and community colleges.)
  
  
• Tax cuts have not proven to be economic simulators. State revenue peaked and unemployment was at its lowest in 1999 when income tax and single business tax rates were 12% and 18% higher, respectively, than they are today.

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Bills Would Prohibit Harassment and Bullying at School

House Bill 4091 (Vagnozzi, D-37) would require the Department of Education to develop a model policy applicable to grades K-12 that prohibits bullying or harassment at school, and make the model policy available to schools. This bill strongly encourages schools to adopt the Department of Education's model policy and to work with local law enforcement agencies in the implementation of the policy.

House Bill 4162 (Byrnes, D-52) would require schools to adopt and implement a policy that prohibited harassment or bullying at schools. The board must hold at least one public hearing on the proposed policy, which may be held as part of a regular board meeting. No later than thirty days after adopting the policy, the board must submit a copy of the policy to the Department of Education.

The Department of Education will then submit a report to the Senate and House standing committees on education summarizing the status of the implementation of policies prohibiting harassment and bullying in schools.

The policy would apply to bullying on school buses and at school-sponsored events as well as on school premises. Bullying that occurs using a telecommunication access device such as a computer would be prohibited.

Under House Bill 4162, "bullying or harassment" means conduct that meets all of the following:

• is directed at one or more pupils;
  
  
• substantially interferes with educational opportunities, benefits, or programs of one or more pupils;
  
  
• adversely affects the ability of a pupil to participate in educational programs or activities by placing the pupil in reasonable fear of physical harm or by causing emotional distress;
  
  
• is reasonably perceived to be motivated by an actual or perceived characteristic, such as height, weight, religion, race, color, ancestry, national origin, age, sex, sexual orientation, or general identity or expression, or by socioeconomic status or a mental, physical, or sensory disability or impairment, or is reasonably perceived to be based on association with another person who has or is perceived to have any of these characteristics or any other distinguishing characteristic.

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School Board Members as Volunteers

House Bill 4220 (Espinoza, D-Croswell) would allow a school board member to be appointed to or serve as a volunteer coach or supervisor of a student extracurricular activity, if the following conditions are met:

• The school board member received no compensation for service as a volunteer coach or supervisor.
  
  
• During the period he or she served, the school board member abstained from voting on issues before the school board concerning that program.
  
  
• There is no qualified applicant available to fill a vacant position if the school board member is excluded.
  
  
• The appointing authority has received the results of a criminal history check and a criminal records check as described in the Revised School Code.

AFT Michigan lobbied to have this bill amended by adding these last two requirements. House Bill 4220 has passed the House and is currently before the Senate Education Committee.

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Department of Education Releases Curriculum Guide

The Department of Education has released a new guide detailing the new high school graduation requirements, how students can fulfill the new online learning requirement, and information on the Michigan Merit Exam and other tests.

The 2007 High School EduGuide was created with the Partnership for Learning and will be distributed to school districts. EduGuides are free and versions are also available for elementary school, middle school and college students. These publications are also available online at: http://www.partnershipforlearning.org/.

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2006 - 2007 Michigan Department of Education Grants

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