Preserving Education in FY13
The AAPS Board of Education has now had our first official public meeting on the AAPS budget for FY13 (this is in addition to community forums, emails, phone calls, and other discussions). While the debate continues, there are a few areas of agreement that are part of what will keep the AAPS a great school district – despite the inordinate defunding efforts in Lansing. Those areas of agreement are:
- Preserving teachers: education is what we do. We believe that small class sizes do make a difference in the quality of education that we can provide for an increasingly diverse student population in increasingly demanding academic times. As such, we will NOT be reducing any teachers this year as part of the budget reduction plan.
- Preserving programs: again – education is what we do. In AAPS, we offer a wide variety of options for our students, especially at the high school level. Our academic programs are very important to our students, and to us. We will want to review programs more thoroughly, but those reviews will be led with the best thinking about what our students need and how we can better support and prepare them for the next stage of their life. Efficiencies will always be sought, but that will follow; not lead the program and academic curricula offered in the AAPS.
- We are able to maintain tools and processes that help support a differentiated learning environment; our way of ensuring that all AAPS students make progress – including our top performers. With the passage of the IT bond in our community, tools can be better-equipped to help us with this aspect of our academic programs in a cost efficient manner. We will also be able to continue to innovate in our classrooms with IT.
It is difficult to reach agreement on other reductions, when we know all of them are not what’s best for students. We should have long ago been investing more in our students – and I believe this would contribute even more aggressive economic growth in our area.
Nonetheless, I am proud of the AAPS, my fellow trustees and our ability to put education first in even the most difficult times.
The debate will continue until we have finalized our budget. More work will be asked of our administrative team to accommodate reductions and changes while preserving programs so that in the Fall, our students and community have a smooth transition in to the new year.
We will continue to assess programs, work to make improvements and then monitor the impact of those changes. This work is never done. Nor is the work of looking for more efficient operations and fiscal responsibility. As was discussed in our last Board meeting, we will continue to see savings as a result of our earlier hard work. This is true in the case of energy efficiency, healthcare costs, etc.
There is a lot to be proud of here – and this is as good a time as any to take a moment and acknowledge our dedication to an excellent education in the AAPS.
Michigan Revenue Projections are Up, But the SAF will Continue to Decline
The May Revenue Estimating Conference took place in Lansing today.
Key Take Aways:
- The School Aid Fund (SAF) is expected to decline 3.9% this year, because of the new Michigan Business Tax bill that will continue to provide less revenue to the SAF going forward (this was what the $1.1B reduction to the SAF was partially used to offset $1.7B in revenue). What was less clear when the Michigan Business Tax break was issued, was the recurring long-term negative effect on the SAF. In fact, some indicators suggest that the losses will be even greater, given that business revenues are down even more than expected and could continue in that direction.
- Overall, between increased revenue to the general fund and less costs (primarily due to decreases in Medicaid), the state will have $300M in incremental revenue than they were expecting in January 2012.
- State revenue is expected to increase 2.7% this year (although the reductions for the SAF will be 3.9%).
The impact of the Michigan Business Tax break will continue to deplete the SAF in Michigan in an ongoing fashion. Interestingly, the increases in employment are largely coming from manufacturing and fields that require a higher education. My take-away on this is two-fold:
- We have not ‘redefined’ the Michigan economy based on knowledge-based services and jobs yet.
- To the extent that the future of Michigan becomes more dependent on our ability to move toward a knowledge-based economy, we are increasingly putting our community at risk as we continue to defund public education.
Increases in revenue are not expected to go to offset education reductions, but may instead go to the state’s ‘rainy day fund’ or to other one-time expenses.
Not great news – AAPS will have to continue on the path we’re on, addressing a $17.8M gap for FY13. It would not surprise me to see additional reductions come our way.
Michigan Revenue Estimating Conference May 16 2012
The state’s revenue estimating conference will occur this Wednesday, May 16, 2012. We expect to see that revenues are up relative to estimates from both the January revenue estimating conference and relative to this time last year.
The House Fiscal Agency (HFA) has released their estimates, which can be found here: http://www.house.mi.gov/hfa/PDFs/revreview%20may12.pdf
In summary, the HFA expects revenue to be up $313M or 3.5% YTD.
The next question is whether any of these increases will be used to offset severe reductions put in place last year. This kind of increase would be very helpful as K12 school districts (and many other public institutions) work on their budget plans for next year.
We expect that the state budget will be approved by June 1. School districts must approve their budgets before July 1, so the timing is aligned such that districts will have a reasonable idea of what kind of funding and expenses they can expect.
I do hope we see the increased revenue impact final budget decisions at the state level.
Education is Highly Valued in Ann Arbor, MI
This year we learned that Ann Arbor was the most highly-educated city in the U.S., having beat out cities like Cambridge and Berkeley in the number of citizens with bachelor and graduate degrees. It has long been a distinction of Ann Arbor that we place a very high priority on education – not just for our adults, but also maybe especially for our children.
That was certainly the case when Proposal A was enacted in 1994, as Ann Arbor was taxing itself $1,234 dollars per student more than what the Proposal A state average would be in its first year. That number stays with us today as part of the ‘Hold Harmless’ legislation component of Proposal A, which promised communities that the state would not deplete their funds to get to the new state foundational allowance amount. At the time, 39 other districts in Michigan were ‘hold harmless districts’.
Yesterday, the Ann Arbor community told the state and its own citizens that we still place education as one of our most highly regarded values and we are willing to fund it. This was reflected with the 70% approval of the IT millage proposal, which will fund upgrades to technology for the AAPS.
This is a strong message at a time when school districts are prohibited from reflecting their values in education.
We need to solve that problem next – we need to push for local levy authority so that communities across the state can engage in a democratic process to provide an education for their own community, instead of being beholden to statewide partisan politics. We need to mobilize people here, and in other communities, to change the law.
We know that you cannot grow an economy on failing school systems. We know that we want to continue to make Ann Arbor an excellent community to live in, from birth to the end of life. That comes from a strong and vibrant educated community.
The current impact of the state’s funding priorities will come in to laser focus at the AAPS Board meeting tonight, as we hear from many community members that do not want to live with the cuts to programs and services that we are forced to make.
The passage of the millage reminds me of what makes Ann Arbor such a great place to live in that we are willing to fund education. We are also willing to fund it in a very cost effective way, where homeowners might pay $26 dollars a year to upgrade technology. The alternative way is to continue the cost shifting to families with children in the district, which is not cost effective and it inordinately effects a smaller portion of the population.
Thanks for reminding everyone that Ann Arbor values education – as such, it continues to be an excellent place to live.
Vote for the AAPS IT Millage Today
If you have not voted yet today, please do so.
This is the only form of a millage where 100% of what is raised in our district goes back to our district. For every $1 raised here, $1 comes back to the AAPS.
This is also the only form of a millage that is just for our district. We do not have to have the other 9 districts in Washtenaw County support this in order for it to pass. If folks in Ann Arbor want to support education, this is a great way to do it.
Proposal A turned AAPS into a donor district. Currently, our ‘donor’ status is pretty significant, as 76% of the revenue raised in Ann Arbor to support K12 public education goes to other districts, at the State’s discretion. We receive $0.24 of every $1 raised in Ann Arbor.
This millage is also one of very few options for our community to reflect the value we place on education, without being mandated to devalue and defund education, as is the State’s current trend.
Please go vote today to support the IT millage. There are many, many reasons that this is needed:
- Technology continues to change, challenging the equipment we currently have in place.
- The average age of IT equipment is 6 years old currently; that means many are much older and do not run current software for academic programs.
- The state is mandating more and more testing and reporting, making an investment in IT a much more long-term cost effective move for our district.
- We anticipate more and more academic content to move online.
- We do not have the current bandwidth capacity to support students and families devices in our buildings. We need to provide this kind of access with the typical security controls that most other businesses already provide.
- Our current budget situation reflects the very low priority that the legislators place on education in Michigan. This millage will allow us to preserve more of our depleting funds to academic programs, where that funding belongs.
- Take local control – voting yes is local control in action. Send a message to everyone else in our State that we still value education in Ann Arbor. It’s part of what makes us a great place to live, raise your family and grow a business. Let’s keep it that way.
If you have not voted yet, please do so.
Budget Reductions that Reflect Education as Our Core Mission
I have spent half a day at Roberto Clemente and A2 Tech High School recently, trying to conduct my own due diligence on the impact of closing the RC building. While I can’t do a comprehensive assessment in two half-day visits, I am forming my own opinion on the issues at hand.
First, each and every cut that we are proposing this year (excluding the $500,000 energy cost savings – that is a good thing), will negatively impact our students and the quality of education in the AAPS. Nonetheless, I expect that we will fare better than other districts, partially because of the high value that our community places on education. However, we essentially gave up local funding control with Proposal A and now the state determines how much money we will have each year. Our community can no longer raise funds toward our general operating budget to reflect the high value that we place on education. If any change could be made in the near term, this would have the greatest impact: local levy authority.
Context for this one proposed reduction:
If my memory serves me well, Principal Sheila Brown and her team presented the Planning Committee (I was Chair at the time) with a long-term plan for A2 Tech. This plan included the name change, which was implemented last year. But that was just the beginning of the plan. The rest of the plan would unfold over the next couple years, eventually resulting in a Middle College model for A2 Tech. That means that we would eventually move the students into a college setting, which would accomplish many things for that program. For AAPS, there would be some cost in renting space on a campus to host the program, but there would also be cost reductions in building expenses for the current space.
In meeting many students at A2 Tech, many would benefit from that environment. Not all would, but many would. I think this warrants continued exploration and a commitment to see this plan through.
In the half day I spend at Roberto Clemente, I had wonderful student hosts that took me to all of their classrooms and I had the opportunity to meet many students and teachers there. I also spent some time with Principal Ben Edmondson discussing the program’s objectives, history and current performance.
The visit to both programs was truly a wonderful and enlightening experience. Both have a specific focus and are addressing some of our most at-risk students. Both programs help keep our students engaged in school and, in many cases, provide the only source of stability in their lives.
We have spent an inordinate amount of time this year asking our administrative team to develop reports on the discipline and achievement gap. As a district, we have made a commitment to our community to provide resources and help our most needy in ways that we believe will have an impact for those students.
My impression is that we need to continue with our commitment to our most needy; especially in providing them with an education. We also need to continue to raise the bar and expectations – move forward with the Middle College option (UM would be a good partner and we could expand our partnership with them from K-8 to K-12 and beyond); continue to improve the students’ performance in a supportive environment at RC.
We can ask these programs, and others, for some savings in other ways.
At the same time, it was apparent to me what years of cuts are doing to our programs. Each of those buildings has no media center staff, no librarian and so the very access to additional reading material (if we think that’s important – and I can’t imagine anyone who doesn’t), is eroded. Maybe not entirely, but it is definitely not being optimized.
There are many other examples.
I really appreciate the time that folks took out of their day to host me at both RC and A2 Tech. I had a truly wonderful experience at both places. We need to stay focused on our core mission of education – even as the state continues to drain our resources. We also need to help these students improve their own lives and be as prepared as they can be so that they can be constructive citizens that are working and improving our communities.
MPSERS and SB1040
The Senate Bill that is being considered (SB1040) would address some of the issues with MPSERS - one of the single largest cost drivers for K12 public education today. School districts have been advocating for change to the program for years, especially since inordinate increases have been issued annually since 2004.
The primary issues are the following:
- A defined benefit is too expensive as less and less people are working to offset the costs of benefits (current ratio of working to retired is 1.23; used to be over 4 and has been shrinking since Proposal A was in place, starting with 2.75 in 1996) AND the cost of benefits has increased substantially on a per person basis as healthcare costs have risen and people are now living longer.
- MPSERS is controlled by the State. Local districts have no opportunity to impact the MPSERS rate. They are told what it is each year, and must pay for it. The increase in MPSERS has eroded the foundation allowance to rates in FY00.
- ‘Stranded costs’ continue to be an issue, as more and more people have left the system through cuts, privatization and outsourcing. Charter schools exacerbates the issue further, and the recent lift on the cap for charter schools means this could become even more of a problem fairly quickly.
FY14 assumes a retirement rate of 31.2%. For each 1% increase, the AAPS needs to reduce its operating budget by $1.1M. Over the past several years, this single item has required the AAPS to reduce its operating budget $3M – $5M each year. The increase from 27.37% in FY13 to 31.21% in FY14 will, again, require almost $5M in reductions to our general operating budget alone.
These are dire circumstances that must be addressed – and can only be addressed at the State level.
Two recent articles provide a good overview of the history of MPSERS and talking points for SB1040: http://www.masb.org/Portals/0/Headlines/HLMay1/index.html
http://www.mlive.com/education/index.ssf/2012/04/a_look_at_the_history_of_mpser.html
With the overhauls introduced by SB1040, there are changes that can also negatively impact the ability for K12 education to recruit high quality people into teaching positions. This is exactly the opposite direction of what we know we need to impact improving education in the US. Michelle Rhee’s Students First organization touts the ability to pay better teachers more as a foundational theme of education reform. Yet again, in Michigan, we tend to run in the opposite direction of progress.
While reforms are needed to MPSERS and education in general, we need more thoughtful reforms than what is being proposed today.
A quote from a recent CRC report states the impact of SB1040 in these terms:
“A number of the provisions contained in Senate Bill 1040, if enacted, represent real compensation reductions for school employees and additional out-of-pocket expenses for former school employees. Teachers are the most important ingredient in the education equation. In addition to affecting the financial situation of current teachers, the contemplated legislation could certainly influence the type and quality of teachers that schools are able to recruit in the future.”
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