Our lawmakers are once again at a crossroads, figuring out how to manage the tremendous decline in revenues for public services, including schools. Time is running out.

Constant readers will notice the shortage of news on the state K-12 education budget in recent months. There is a good reason: there hasn’t been any.

Rushing to get budget bills passed before adjourning for the July 4th recess, the state Senate on 24 June passed its version of the K-12 school aid budget bill. Senators made only minor changes to the amended bill reported from the Appropriations Committee and voted along party lines to approve a budget that includes some $413 million in cuts to schools, including a $110 per pupil cut to local school districts and the near-elimination of several early childhood and school-readiness programs. More….

After some floor dramatics last week, the state House succeeded in passing HB 4313, which expands what school districts can purchase with sinking funds. Opponents of the bill, mostly Republicans, argued to no avail that it would constitute an increase in property tax rates that required a super-majority vote in both houses. Other attempts to amend the bill at the last minute also failed. Even so, the legislation passed on a 74-35 vote, with eleven Republicans voting in favor while three Democrats voted against the bill. The bill now heads to the Senate, which allowed similar legislation to die at the end of last session.

This Friday (9 January), the state’s top economists will meet, as required by law, and project how much tax revenue Michigan will gather this fiscal year. That’s when we find out how bad things are. If, as most observers suspect, they estimate that revenues will be less than expected, the governor is required by law to propose spending cuts for the current year to bring the budget into balance – unless the Legislature can find a way to plug the hole. This process includes K-12 school funding; the vast majority of the money to operate Michigan’s schools comes from the state School Aid Fund and is supported by state-wide taxes. This is not the first time our schools have gone through this ringer, but maybe it should be the last?

No EO cuts for schools – yet – and sinking fund legislation moves.

Michigan’s school districts received two somewhat unexpected doses of good news this week, at a time when good news is pretty sparse.

The biggest news came on Wednesday, when state Budget Director Bob Emerson told a joint session of the House and Senate Appropriations committees that education funding would not be touched in Gov. Jennifer Granholm’s executive order detailing $134 million in budget cuts.

Legislators head towards budget compromise, but no new thinking in sight.

Most parts of the State budget for next fiscal year are in the final stages of negotiations, as House/Senate conference committees meet this week to hammer out versions acceptable to the Democratic House and the Republican Senate. The school aid budget bill (SB 1107), which supports K-12 education, is part of this process. The good news is that, despite the continued slide of Michigan’s economy, lawmakers will probably not have to cut school funding for the current year, which they avoided last year only after some creative accounting. The bad news is that revenues earmarked for schools will be even lower next year than projected in January, making any attempt to simply keep up with inflation impossible. State government’s main budget, the general fund, is in even worse shape, ruling out help from that direction as well.

Having narrowly avoided a government shutdown on October 1st, our legislators got perilously close to Halloween before approving final budget documents for the fiscal year that was already one month old. One of the less controversial, but still critical, items, was the School Aid budget, which determines per-pupil spending limits and state aid payments to local school districts. Constant readers will not be surprised that we – like many others concerned about school funding – found the budget bill to be a mixed bag. The bill does provide for a modest increase in per pupil funding, and resumes closing the gap between lower and higher-spending districts. But overall state spending for school aid is flat, and our lawmakers have made no clear commitment to invest in education. School aid revenues remain vulnerable, and the future of the extended services tax – the one part of the compromise revenue package which increased direct revenue to the school aid fund – became more uncertain as the month wore on. Our forecast: storm clouds ahead.

In the early hours of Monday morning, our lawmakers prevented a state government shutdown with a deal that left both sides bloody. However, all it bought us was time: a final agreement on the state budget remains to be sealed.

When efforts to broker budget compromises on the floors of the House and Senate failed, our lawmakers essentially punted: the two houses sent gutted, but still incompatible, versions of an income tax bill to conference committee, where a handful of lawmakers will get to try again.