Traverse City Record-Eagle

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OTHER RECENT LEGISLATION

The state House recently approved a plan to address a roughly $303 million general fund deficit this year. Included in the bill, which passed 57-47, is the use of a School Aid Fund surplus for community colleges.

The money typically is used for K-12 schools.

About $208 million would be transferred to colleges under the bill, which needs Senate approval and Gov. Jennifer Granholm's signature to take effect.

The funds would need to be restored by 2015-16.

State Rep. Wayne Schmidt, R-Traverse City, voted no. He said K-12 schools deserve the money and lawmakers need to find more cuts in the general fund.

But state Rep. Dan Scripps, D-Leland, who supported the bill, said community colleges could receive payments on time and general fund dollars could be spent on other departments.

The move was part of Granholm's deficit recommendation this month.

September 2, 2010

School equity may return

'2X' formula gives more to lowest-funded districts

BY LINDSAY VANHULLE lvanhulle@record-eagle.com

TRAVERSE CITY — Equity aid payments for Michigan schools, relatively new when they disappeared in the recession, could resurface this year if lawmakers succeed in using federal dollars to close the gap.

Local school administrators hope a return of the "2X" formula that until last year had given more money to the state's lowest-funded schools won't be temporary.

Legislators who represent the region aren't sure, but said the action would offer much-needed cash for districts starting the year on lean budgets.

The state House recently approved a bill that would use the equity formula to distribute more than $300 million to schools to preserve education jobs. The bill now moves to the Senate.

All districts last year absorbed a $165 per-student state cut. This year's schools budget, already approved, reduced the structural loss to $154.

Under the bill, districts would receive enough federal funding to bring their per-student allocations back to 2008-09 levels, when the base was $7,316 per student, plus another $17. The lowest-funded districts, including many in northern Michigan, would receive an additional $17 in equity aid.

A 90-14 vote included support from state Reps. Wayne Schmidt, R-Traverse City, and Dan Scripps, D-Leland.

"It's great that occurred, even with the stimulus," Schmidt said. "The real question is what happens next year."

Equity payments recently were given in 2007-08 and 2008-09, but were cut last year.

Should the bill pass, the boost would mean nearly $1.9 million in extra revenue for Traverse City Area Public Schools, which receives the base amount. This year's school budget is around $85 million.

"We have to be careful not to spend one-time money on ongoing needs," said Paul Soma, chief financial officer. "How many times can you rely on a federal bailout?"

Districts that receive the federal money have to spend it on salaries and benefits "necessary to retain existing employees, to recall or rehire former employees, and to hire new employees," according to U.S. education department guidelines.

A number of positions are covered by the legislation, including teachers, principals, counselors, classroom aides, coaches and social workers.

Soma said he will recommend to the school board how the district might use the funds. TCAPS, and others like it, hired new employees and promoted some to full-time after a recent state pension incentive led to widespread retirements.

Michigan's school funding system was created with Proposal A in 1994, which was meant to ease the reliance on property taxes and close the gap between the highest- and lowest-funded districts.

Some have been able to collect additional revenue from local millages and a provision in the state School Aid Act.

Scripps said the future of "2X" depends on how fast Michigan's economy — namely, sales taxes and property values — recovers.

"Those are two of the big pieces of the school funding picture," he said. "It's better to essentially use the equity formula with the money we do have, and then make sure that we're growing."

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