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untanglingwebs
El Supremo
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News Feed
Pam Faris
6 hrs ·
From MIRS
Snyder's New Income Tax Shift Goes From Frying Pan To Freezer
Gov. Rick SNYDER quickly shelved until next year a new proposal that would have made the School Aid Fund (SAF) accountable for some $446.2 million in annual income tax refunds after a Detroit News article this afternoon spotlighted the scheme.
With the General Fund facing future pressure from Medicaid expansion and road funding costs, among other things, the Governor was looking to revamp a leftover road funding package bill currently in the Senate and race a bill through in lame duck.
The "Proposal for Allocation of Income Tax" plan slated to be baked into Click to add MIRS Bill Hound HB 4605 would have forced income tax refunds to come equitably from both the General Fund and the $14.1 billion SAF as opposed to just from the $10 billion General Fund, which a Snyder briefing memo given to Senators said "is an accounting unfairness between the funds."
"In other words, as taxes are collected into each fund, the refunds should come out of each fund in the same proportion in which they were collected, which is not done today," the memo read.
Snyder's team insisted that the proposal would not have created a mid-year reduction in what the state gives K-12 schools. Rather, the memo states that Snyder is expecting to offer a budget next year that increases per pupil spending in 2018, even with the new scheme in place.
The education community didn't buy it. They cited a SFA report that saw the plan costing nearly $300 per pupil for Michigan's 1.5 million students for 2017-18.
"Governor Snyder's newly-revealed proposal to siphon money from the School Aid Fund to bail out the state's General Fund would threaten to weaken the quality of our children's instruction, spark widespread teacher layoffs, increase class sizes and even force school closures," said Mark BURTON, Executive Director of the Tri-County Alliance. "We call on lawmakers from both parties to reject this dangerous and ill-conceived proposal, which works against Michigan's goals of becoming a 'top 10 education state in 10 years.'"
After word got out about the plan, Snyder's Press Secretary Ari ADLER said the Governor would not be pushing for the policy change in lame duck, saying, "It's the right thing to do, but not the right time to do it."
Asked why the change in tack, Adler said, "We didn't change tack. We just dropped a sail to reduce momentum."
In the meantime, the school lobby has been circulating a policy brief that further explains what Snyder is trying to do. Under current state law, a 23.8 percent portion of the gross collected income tax revenue automatically goes to the schools, netting education about $430 million.
The governor wants to figure the contribution to schools after all tax refunds are sent back, to taxpayers, thus making the net figure for schools much lower.
"That's a reduction of roughly $287 in per pupil funding statewide," the Michigan Association of School Administrators (MASA) is telling lawmakers.
In its release, it noted that the administration is telling legislators that despite this $430 million cut, the SAF will be "taken care of," but this is far from a guarantee in the eyes of the MASA.
Snyder is trying to shore up the General Fund, but one administration source conceded the other side has the upper hand in the messaging war. They are arguing the Governor is taking money away from school kids, while he will say it is trying to protect the General Fund from future losses of revenue.
One lobbyist thinks the governor is using this SAF issue to force the school lobby to back off its opposition to the energy bill pending in the House.
While the administration source revealed that the Governor is "spending 99.9 percent of his time on energy," the shifting of income tax revenue away from the schools is not linked to the energy discussion still pending in the House, where the numbers in the GOP caucus for the Senate-passed plan is short.
Pam Faris There is a huge concern about the School Aid Fund shift the Gov was pushing this week in Lansing. Many people contacted legislators about this last minute push. It is bad policy! So for now, all of the push back has taken it off the table for Lame Duck. For now.....
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Fri Dec 09, 2016 2:02 pm |
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untanglingwebs
El Supremo
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Fri Dec 09, 2016 2:03 pm |
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untanglingwebs
El Supremo
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Snyder abruptly ends push for $425M school aid shift
Jonathan Oosting , Detroit News Lansing Bureau 8:59 p.m. EST December 8, 2016
GOV Rick Snyder
Lansing — Michigan Gov. Rick Snyder on Thursday evening abruptly dropped his lame-duck push to pay a portion of income tax refunds out of the School Aid Fund, backing off a plan that had infuriated K-12 advocates because of a potential $425 million shift in dedicated education funding.
The Detroit News first reported on the proposal Thursday afternoon. Three hours later, the administration said Snyder had decided against pursuing the idea any further this year.
“It’s not going to happen during lame-duck,” Snyder spokesman Ari Adler told The News. “The governor has asked for it to be held. It’s the right thing to do, but it’s not the right time to do it.”
Snyder is expected to continue discussing the proposal with legislators in the next two-year legislative session, which begins in January.
An executive outline obtained by The News shows the Republican governor promoted the plan as a way to create “equitability” in how the state collects income taxes and pays out refunds, but critics said it would jeopardize a “fair and consistent” stream of funding for K-12 schools.
Under current law, about 24 percent of all income tax collections are deposited into the School Aid Fund, but “when income tax refunds to taxpayers are made, the entire amount comes out of the general fund, creating unfairness between the two funds,” the Snyder administration said in a memo circulating this week in Lansing.
The state is projected to pay out $1.8 billion in income tax refunds in the current fiscal year, according to the non-partisan Senate Fiscal Agency. Drawing 24 percent of those refunds from the School Aid Fund starting Jan. 1, as Snyder proposed, would likely reduce fund revenue by about $425 million. The figure could top $446 million next fiscal year.
But officials were discussing the possibility of phasing in the income tax refund shift, minimizing the immediate impact on the School Aid Fund.
“I think this is something the governor and the Legislature are both looking at,” budget department spokesman Kurt Weiss said earlier Thursday. “It’s not just one-sided.”
One school group blasted the idea as a $300 per-pupil cut to public education.
“Gov. Snyder’s newly revealed proposal to siphon money from the School Aid Fund to bail out the state’s General Fund would threaten to weaken the quality of our children’s instruction, spark widespread teacher layoffs, increase class sizes and even force school closures,” said Mark Burton, executive director of the Tri-County Alliance.
The Snyder administration, in its memo shared with some legislators, stressed that the plan would “not translate into a reduction in school spending,” suggesting supplemental appropriations would be made to replace any lost School Aid funding.
“The governor expects to offer a budget that INCREASES per pupil expenditures in 2018,” the memo read, noting School Aid spending has increased significantly in recent years.
The new proposal had not been formally introduced. But with only three full days left in the lame-duck session, it was positioned to see quick action through a vehicle bill sitting in the Government Operations Committee chaired by Senate Majority Leader Arlan Meekhof, R-West Olive.
Meekhof spokeswoman Amber McCann confirmed Senate Republicans had talked about the plan.
“That is extremely concerning,” said state Rep. Adam Zemke, D-Ann Arbor.
Zemke suggested Republicans were considering the move because they have “over-committed with some of their promises,” including dedicated road funding and local reimbursements because of the phase-out of most personal property taxes.
“They’re going to have continued decreased revenue issues in the general fund, and I think they’re very nervous about it, quite frankly,” he said. “My argument is, find it somewhere else. Don’t take it away from schools.”
Recent economic projections suggest state revenue will continue to grow in coming years, but Weiss said there is some concern about long-term “spending pressures” associated with areas such as public safety and roads.
Sen. Dave Hildenbrand, R-Lowell, said he is interested in the concept. The state’s two major funds have been somewhat “fungible” in recent years, he said, noting Michigan has used School Aid dollars for higher education and the general fund to support schools.
The state is expected to spend $497.5 million in School Aid Fund dollars on post-secondary education in the current budget year, according to the Senate Fiscal Agency, and $219 million in general fund dollars supporting K-12.
“Money’s been transferred, and I think this gives this Legislature and any future Legislature more ability to move money around to reflect the priorities of the state,” he said. “I know the concern, but conceptually I like having that flexibility when you’re in the appropriations role.”
Annual K-12 appropriations have jumped roughly $1.5 billion since fiscal year 2011, according to the Senate Fiscal Agency. However, a good portion of that new money has gone toward teacher pensions rather than direct classroom funding.
Education groups said the Snyder administration’s promise to continue increasing School Aid spending despite a potential income tax refund shift is far from a long-term guarantee.
“The School Aid Fund was designed to ensure Michigan’s public schools receive a fair and consistent stream of funding — free from the many changing political interest found during the budgeting process,” the Michigan Association of School Administrators said in a policy brief.
“Altering this system is not in the best interest of Michigan students or teachers, and sets a poor precedent for future fund allocation.”
joosting@detroitnews.com |
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Fri Dec 09, 2016 2:06 pm |
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untanglingwebs
El Supremo
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Hands off of Michigan's School Aid Fund
Chris Wigent and Don Wotruba 11:30 p.m. EST December 20, 2016
636178439829026611-IMG-IMG-IMG-School-class-1-.JPGBuy Photo
(Photo: MANDI WRIGHT, Detroit Free Press)
Story Highlights
Chris Wigent is the executive director of the Michigan Association of School Administrators.
Don Wotruba is the executive director of the Michigan Association of School Boards.
It seems that memories in Lansing are running short these days. It wasn’t too long ago that accounting gimmicks and convenient budget shifts were decried in the Capitol chambers as the root of all of Michigan’s financial woes.
Fast forward to Lame Duck 2016, in which Lansing lawmakers were kicking around a dangerous plan that seeks to drain more than $430 million a year — roughly $300 per pupil — from the School Aid Fund, harkening back to those days of budget games.
The plan was billed as a “technical fix” by the Snyder administration that would more equitably distribute income tax revenue. What it really amounts to is an income tax shell game that would seriously threaten reliable school funding in Michigan.
Thankfully, Gov. Rick Snyder has backed off his plan for now, but he has indicated that it will be revived in the 2017-18 legislative session. According to his spokesman, the plan is “the right thing to do, but it’s not the right time to do it.”
We want to be clear: There will never be a right time for any plan that would divert more than $430 million away from our schools while guaranteeing no future protections for school funding.
►Related: Amid backlash, Michigan GOP shelves health, pension cuts
►Nancy Kaffer: Why would Snyder seek $430M cut in school aid?
For years, the go-to tactic in Lansing to plug any hole in the General Fund has been to raid the School Aid Fund like a piggy bank. This practice must stop.
The School Aid Fund is the life blood of our schools. It provides per-pupil funding, as well as critical support for special education programs, at-risk programs, early childhood education, career-tech training, vision and hearing screenings, school lunch and breakfast programs, and more.
During the lame-duck session, when this “technical fix” was still being considered, lawmakers promised that the School Aid Fund would be “taken care of.” Increased revenues, they said, would make up for any shifting funds. But gambling funding for our schools on hoped-for increased revenues is foolhardy since they are in no way guaranteed. Quite frankly, we know what “trust us” looks like, and Michigan’s hundreds of school districts can’t afford to fall for it again.
►Nancy Kaffer: 'Trust me' legislation lets companies control taxes
►Editorial: Legislature is building a weaker Michigan
Additionally, because of term limits, the lawmakers making promises to protect our schools today won’t be here down the road to make good on them. While their stated intent to take care of schools is laudable, their ability to follow through is beyond their control.
Michigan will never be able to achieve the goal of state Superintendent Brian Whiston’s ambitious “Top 10 in 10” plan if we don’t have protected and reliable funding for our schools. If we want every child in Michigan to get a quality education so they are prepared to be our state’s leaders one day in the future, we must demand that policymakers fiercely protect the dollars that support our schools.
Chris Wigent is executive director of the Michigan Association of School Administrators. Don Wotruba is executive director of the Michigan Association of School Boards. |
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Wed Dec 21, 2016 12:25 pm |
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