Wednesday, October 28, 2009

Why do we ignore school spending?

Everyone seems to have an opinion on government spending at the federal, state, county, and even city level. I don't understand why parents will get involved in the school FUNDING debate, but ignore school SPENDING.

Michigan's Governor just announced a shortfall in tax revenue, and the subsequent reduction in school funding. The predictable outcry from schools drove me to write this article:

Detroit News – Schools often don’t budget wisely – (10/27/09)

It ran the day after Governor Granholm used the Rochester Schools Administration Center for one of the stops on her PR Tour to raise taxes in Michigan. I was told that the by-invitation-only event included superintendents, board presidents, union presidents, and PTA presidents. You really couldn’t tell for sure because most of them snuck in the back door of the building.

Senate Majority Leader Mike Bishop and House Representative Tom McMillen were also invited. They walked in the front door.

You can imagine the conversations that took place… all designed to pressure Bishop and McMillen to raise taxes. Schools pleading poverty, claiming that they have already cut everything that could be cut, threatening that further cuts to schools will directly impact the classroom.

That was Monday afternoon.

Monday evening, Rochester had a school board meeting.

There was not any mention of the Governor’s visit, nor did the board discuss the additional $1.9 million reduction in state funding that had been announced since the last board meeting.

What the board did do was approve a $45,000 expenditure for wireless microphones “to be used throughout the district in the three auditoriums for events such as Plays, Musicals and Summer Music Theater.”

I’m a “theatre parent”, and agree that wireless microphones certainly enhance the performance. I’d be happy to personally contribute to a fundraising event designed to fund the purchase of these sorts of theatre enhancements.

But I don’t think this purchase can be considered a critical and necessary district expenditure after the board approved a deficit budget of $2.5 million. It seem especially excessive after the additional state funding reductions, which will presumably push the deficit to $5 million.

It was approved on a 6-1 vote.

Its one small example that shows how school boards are oblivious to the situation they’re in.

==> Mike.

I’ve based the article below in case the link doesn’t work.


Schools often don't budget wisely


When Gov. Jennifer Granholm cut $54 million in "hold harmless" education funds, some critics suggested she did so for political reasons. Michigan Republicans should have accepted at face value that Granholm was following the GOP lead in trying to balance the budget without tax increases. But they didn't.

And schools are playing on that fact by turning up the heat and hyperbolically suggesting the government is cherry-picking whom they want to punish. Superintendents are bemoaning the cuts, using taxpayer resources to lobby parents and direct them to flood legislator phone lines and e-mail boxes with demands that education remain a priority.

No superintendent has acknowledged the fact that the state does value education and already spends one third of its budget -- about $16 billion -- on K-12 education.

The missing counterbalance to this outcry is spending oversight. There is an assumption that schools spend prudently, and their budgets can't absorb cuts. Just ask them, and they'll quickly offer meaningless sound bites like "We've already cut muscle, and are now cutting into the bone."

Somehow school boards get a free ride on spending accountability. Where is the critical eye on local school spending? School board meetings are sparsely attended with a handful of regulars in the audience and few from the media. School budgets are published in a way that even seasoned certified public accountants can't scrutinize.

Yet many parents jump -- without question -- when schools issue a call to action. Schools shamelessly threaten that our child's future will be harmed if we as parents don't jump.

This reflexive parental response is perplexing given that whenever the specific warts in a school budget are revealed, taxpayers are appalled. Gold-plated insurance benefits and a generous pension plan are among the best known. Superintendents make more than the governor. School boards approve multiyear contracts with guaranteed increases despite knowing future revenue is at risk. It's irresponsible, yet nobody holds school boards accountable.

Even school claims that "we've already cut" go unexamined. They will typically call a reduced spending increase "a cut." And when true cuts are made, they are typically made to preserve other poorly managed programs or contracts.

In the most recent round of state reductions, the per-pupil funding is decreased $165 per pupil. Schools are upset because it's coming mid-year after budgets have been established.

This is a bogus argument.

Schools have known for a year or more of the state's distressed financial condition. Groups like the Michigan School Business Officials monitor state revenues and provide guidance. In January, the School Business Officials group predicted cuts in the range of $100 to $150 per pupil. In Rochester, the school board chose to budget for a revenue cut of $110 per pupil.

Any school board that did not budget some sort of cut has no excuse for not doing so.

The $54 million line-item veto by Granholm is a different story. But even though it came as a surprise, it still merits examination.

The so-called 20j or affluent districts levy additional taxes on their residents and receive a $54 million supplemental payment from the state because they were spending more per-pupil in 1994 than the then-new Proposal A formula allowed. It's this supplement that was vetoed.

It's certainly a painful cut, but will it be fatal? Nearly $20 million of the cuts will come from Oakland County districts. Collectively, the 12 districts affected are sitting on nearly $140 million in "rainy day funds."

The question of whether it's fair for them to shoulder another $20 million in cuts is as subjective as the question of whether it's fair that they've continued to receive an extra $20 million for 10 years.

There is no clear right or wrong answer. But it's reasonable to ask -- especially in tough economic times -- whether affluent districts could bring spending more in line with other successful districts. At a minimum, taxpayers should be entitled to understand specifically what would be lost should the cuts be made.

But if few are questioning anything, schools are free to continue with business as usual, using our children as funding shields, accountable to no one.


Anonymous said...

The 20J Train Wreck.

By law most tax millages sun set in 20 years in Michigan. Does the 20J sunset in 2014?

If so... There is a real train wreck coming for some districts.

Bill said...


I read your piece when it appeared, and I want to give you credit for at least having a unique perspective on the issue and being consistent with your views.

At the community college level, there are many successful "foundations" run that bring in sizable dollars to each school. I've often wondered why K-12s don't do that more (turf wars within the district between various schools' PTOs?)

That said, I strongly believe there needs to be improvements made to the tax structure. I like the idea of lowering the sales tax but including more businesses in it. Right after Prop A was passed, Engler and the legislature quickly make a mountain list of things that would be exempt from taxes that would bring in revenue.

And schools were promised money from Lotto. But the State neglected to say that what they'd do is give Lotto money--but back that amount out of the regular budget. Well, whoopee! That's not "getting" anything.

Yes, there needs to be accountability on the spending end--but the revenue end is horribly broken as well.

Diana Huetteman said...

RCS does have a foundation; it hosts an expensive golf extravaganza every year. But let's get back to school spending. Mike, I've asked you many times about specific spending items before the BOE and when you didn't know the answer to my question you've sent me in search of those who might. While I get one answer from those in the finance department it is followed up with another response by the person in charge of community relations. The two numbers never match. Why is that?

Why is it that requests for an independent financial audit are met by the RCS BOE with "there's no support for this item at this time"? When will it be time? I've watched a change in superintendent, a change in financial officer, long term no bid contracts, questionable MIS consultants hired and still no independent financial audit. I've seen special interests fully fund the elections of certain BOE members to supposedly volunteer positions yet no independent financial audit.

I've written letters to the BOE. I've shown up for meetings and still no financial transparency, no accountability. Each year there's a big "ta-doo" about superintendent evaluations and pay increases yet cuts are demanded of lower positions. What would get the attention of my local BOE that spending money on PR firms to develop plans to push millage increases because the BOE failed to plan adequately is insane when the same group approves MIS consultants who add nothing to bring coherence to our district's technology mess?

Lobby For Your Own Kids said...

I caught one of the recent meetings and saw board member Coutteau talking about his kids at the Summer Music Theater.

I'm sure this $45K spending was payback for his quick jump to the rubber stamp side.

Bill said...

If you're going to target the arts, why stop there? Why not sports, too?

Mike Reno said...


When I was in school, we had plays and musicals. Somehow we managed to have them without wireless microphones. We were taught to project our voices.

As I said above, I fully agree that wireless mics enhance the performance. But I question whether they are NECESSARY or CRITICAL when the district is looking at a $5 million deficit.

And I have also questioned the districts level of expenditures for sports. In Rochester, the district could document spending nearly $1000 per pupil on secondary sports, and that didn’t even include all sports-related expenses. Seems a bit much, especially when the district cut strategic planning dollars – money that has been able to achieve some impressive results in reading intervention programs.

School spending is no different than business spending, or your own personal spending. It’s all about the choices we make when spending a limited number of dollars.

These are all important programs, and they all have value. But the problem with schools is that is impossible to have a rational discussion about spending reductions without somebody accusing you of “targeting” them.

Mike Reno said...

Re: the 20j Train Wreck...

That 20j money was passed in 1999-2000, when the state was giving out increases that exceeded the rate of inflation.

The "hold harmless" districts would've had to reduce their local taxes. Prop A allowed them to tax their residents, but the combination of their state aid and their local millages could not increase faster than the rate of inflation.

Section 20j was designed to end-run that provision of Prop A.

The state provided increases that exceed the rate of inflation for at least three years in a row, beginning in 1999-2000.

I believe the 20j funds are discretionary, and therefore must be approved annually.

Bullseye said...

Lobby for Your Own Kid':

You've pinpointed the 3-headed hydra of the Rochester Bored of Ed.The others are:Lobby for the Union & Lobby for Your Cronies in the 'Hood.

Mike Reno said...


You have been tireless and determined in your efforts to understand the school budgeting madness.

I really didn't mean to imply that "nobody" watches.

The problem is that SO FEW watch that school boards can easily dismiss them.

I sincerely appreciate your efforts... don't give up!

Mike Reno said...

Re: Trustee Coutteau...

The board was not informed of the origins of the wireless mic request, but I would imagine that the idea surfaced before Mr. Coutteau's children became involved in the SMT.

And, I really don't think Mr. Coutteau would attempt to use his position in that way.

Bullseye said...

The 'origins" ofnon-essential budget requests isn't quite as important as the actions taken by those who vote to approve such foolish public spending in times like these.Coutteau voted with the herd.Disappointing to say the least.

Bill said...

Isn't there a new law about having to post district finances online?

Sister Check Writer said...

If there is, you can thank the Mackinac Center once again, for leading the charge on guarding the public trust.

Bill said...


Multiple sources have said that if the personal income tax exemption is frozen that could generate around $50 mill (and cost the average taxpayer around $5). A tobbacco tax on things currently not covered could conservatively bring in another $150+ mill.

But why is that so hard to believe yet (I assume) you believed the crap about PA 106 saving $400 bazillion dollars?

I find it humorous that a neo con says "cutting the piss out of worker bee pay and benefits will save $100 trillion dollars" and conservatives nod their heads like robots--but if someone says "gee, how about lowering the sales tax from 6 to 5 percent but including all services" that person is obviously crazy and/or a communist?