Lori Harrow, an English teacher in Novi, had just closed on her new house one week before being given a layoff notice. So her summer is being spent wondering what the fall will bring, and she is not alone.
Worse yet, many administrators and school officials fear the worst is yet to come. With reduced tax revenues due to the economic downturn, some fear school districts across the state could be pushed shortly to the brink of crisis.
"It is really stressful, because I am back to square one," said Harrow, who is married and had finished her first year at Novi High School. "I have to apply and hope I get an interview, which is very unlikely in this economy. It's scary because a lot of teachers around Michigan are getting laid off who have been tenured and who have five or six years of experience."
The anxiety felt by teachers and staffers is shared by students and parents, who get less from and sometimes have to pay more for education. In Hazel Park, the superintendent feels making parents pay for their children to play sports is not an adequate solution.
Shortfalls in the state's budget have become annual events and have forced cuts in educational spending, including layoffs. Lately, districts across the county have explored privatizing services, and Southfield made the switch earlier this year.
In two years, it will be much worse, many officials fear.
With the current economic downturn gripping both the state and the nation, funding schools is reaching a crisis level with no light coming from the end of the tunnel. Many are pointing their fingers at what is known as Prop A.
School and state leaders continue to grapple with the 15-year-old law, Proposal A, and the national economic downturn that has brought both the housing market and automotive industry to their knees. These issues will wreak havoc on school districts in the coming years, leaders say.
Now, some school officials wonder if the state's residents will be forced to vote on changing the law again in an effort to stabilize funding for public schools, some saying a wholesale change in taxing will be needed.
Adding his voice to the chorus calling for change is Hazel Park Schools Superintendent Dr. Victor C. Mayo, who laments not being able to go to the community and ask for support on a mileage.
Having parents pay for their children to play sports is a hardship for many of his parents. Cutting programs that are important to students will have a great effect on the students.
"The state really needs to let the voters take a look at doing something different than Proposal A," Mayo said.
Proposal A falters
"When Prop A was introduced, people said that in the long run, it would be a serious problem," said Mark Gutman, a retired public school administrator who lives in Commerce Township. "It is now. The problem now is that the money available for education is diminishing rapidly and, within two years, we will be at crisis level for most school districts."
In 1994, Michigan voters passed Proposal A, which was a constitutional amendment that fundamentally changed the way schools are funded.
Proposal A rearranged school funding by cutting property taxes and then making up the difference by increasing the sales tax from four to six cents per dollar. This proposal had some positive effects, such as allocating resources more fairly between districts. Another popular result of Proposal A was cutting property taxes, with the average annual savings to property owners of $2,000.
But now, sales tax revenues are falling with reduced spending and property tax revenues are dipping with the decline in home values.
"Many of us will ask for reductions on our taxes, thus reducing city and township income as well as school taxes," said Gutman, who retired from Garden City. "The huge amount of federal dollars coming to Michigan schools from (President Barack) Obama will be offset by major drop in Michigan funding, especially in 2010-11."
Leaders feel the law is an unreliable way of funding schools, causing all the districts in Michigan economic woes. The proposal does not allow cities to raise taxes for school operations, only for capital expenditures such as facilities. School districts now find themselves in a position where their revenue is cut and they have no way to make it up.
Not going to the community and telling them what the schools can provide for their child contributes to the sense of community being lost, Mayo said.
How much more can be cut?
Now districts are feeling the pain.
In Farmington, school leaders feel they have cut as much as possible and they have no place else to cut from.
Mary A. Reynolds, Executive Director of Business Services for Farmington Public Schools sees the crisis in school funding as a structural problem because the state sales tax is not a stable source of funding for schools.
"The unfortunate thing is, I think the legislature is waiting for the next Kalkaska, that is we will have to shut our doors, and until we actually shut our doors I don't think the reality will set in," Reynolds said. "Things will not get better unless we get help from the legislators."
Some of Reynolds ideas for improving the school funding situation include: a statewide salary schedule for teachers with some regional differences, help with the retirement of employees and a state wide health plan.
"Michigan's recovery is not likely to come soon," said Steven Norton, executive director of Ann Arbor-based Michigan Parents for Schools. "We all need to stop pretending and talk seriously about what it will take to preserve the schools our state so desperately needs.
"We must choose today to make a small sacrifice for our future, and ensure adequate funding for schools. We also need to take a second look at our how schools are funded in Michigan, so that this does not keep happening."
Can Lansing change the tax system?
No district is immune to the budgetary headaches.
Bloomfield Hills Schools Superintendent Steven A. Gaynor sees the funding issue differently because two thirds of their school tax dollars go to other districts because of Proposal A's redistribution.
"I don't think we can continue that or increase that amount," said Superintendent Steven A. Gaynor. "It is clear that the state does not have sufficient money to fund education or other important basic services the public demands in this economy."
Gaynor said he fears that once beyond the crisis point, the state legislators won't have a plan for repairing the school funding system.
Lansing is hearing the message that schools are in trouble.
Michigan House Education Committee Chairman Tim Melton, D-Auburn Hills, said he is aware of the problem and he and his colleagues are looking for ways to solve the school funding crisis. Legislators are looking for a stable source of funding for schools, he said.
"It's got to be part of a big tax reform bill, it's not going to be just a school aid piece," Melton said. "When Proposal A was voted in, many other funds were impacted. We're looking for a holistic approach to tax reform and that's not an easy thing to do. Education funding is very important to us and we are trying to rack our brains to find the best way to deal with it."
Ellen Hoekstra is a lobbyist for the American Federation of Teachers and she also lobbies for school personnel unions and she said her perspective is similar to the superintendent's.
Hoekstra said she wants a more stable way of funding schools and thinks a graduated income tax along with property taxes would be a good idea. Any changes would require a vote of the people, she said.
The legislators are working over the summer and if the voters are to be asked to decide on a tax reform package in November, it would have to be ready by August.
"In 2004, the State Senate Fiscal Agency did an analysis where they found that 95 percent of school districts are worse off than they would of been under the old system," said Doug Pratt, Director of Communications for the Michigan Education Association, the states largest teacher union.
"It has not gotten better," Pratt said. "All of these numbers have gotten worse."
Tough decisions for school boards
Rochester Community Schools Community Relations Manager Debra Hartman agreed that Proposal A is giving schools a problem and the structural problem with Proposal A was not as apparent until the economy had problems.
Eighty-five percent of Rochester's budget goes toward payroll. This spring, administrators reached an agreement with several unions after exploring privatizing custodial and transportation services, sparking a community-wide controversy.
"Something very drastic needs to be done," said Hartman.
Privatization of services is being explored in Novi and was implemented in Southfield earlier this year for custodians, bus drivers and maintenance workers.
Funding shortfalls hurt learning
Even some who like Proposal A say that reforms are needed from the state, though districts will need to be ready to reduce their spending because of falling budgets.
"I've always been in favor of Proposal A because it brought stability to school districts until this downturn in the economy," said Dr. William A. Pearson Superintendent of South Lyon Community Schools. "The school districts need to take a look at their contracts, take a look at every facet of their organization and see where they can make reductions. It's getting dangerous for a lot of school districts."
As far as fixing the school funding process, Pearson thinks that it is Lansing's job to come up with a solution.
Schools are heading toward a funding cliff in the 2010-2011 school year because the stimulus money that was meant to last three years is already about half used to pay for last year's costs, according to Waterford School District Superintendent Robert R. Neu. He said schools will have to learn to live with about 20 percent less that they have become accustomed to because of the downturn in Michigan's economy and the auto industry.
"This is a complex issue with no simple answer," Neu said.
