By Peter Spadafore, associate executive director for advocacy and communications
Over the years, you’ve probably read a lot of alerts and updates from MASA that urge you to contact lawmakers over very small tax policy changes – sales tax exemptions on prosthetics, for instance – or very large tax changes – like those associated with the enterprise data center exemptions proposed in the Legislature. You’ve read them, thought about them, maybe even contacted legislators about these messages, but have you ever thought about the overall impact of these bills on schools?
Every legislative session, legislators propose hundreds of bills, some with good intentions, that have negative impacts on the revenues for schools. In fact, over the last six years, over $275 million has been cut through small and large revenue cuts. This equates to over $185 per pupil on an annual basis. We have stood in opposition to each of these bills, and won some and lost some.
These tax policy decisions all help contribute to the fact that total revenue for Michigan schools has declined by 30 percent since 2002. According to research conducted by Dr. David Arsen from Michigan State University, “If Michigan devoted the same fraction of its economy to state and local taxes today as in 1972, it would generate an additional $15 billion in tax revenues per year. That represents 76 percent of total K-12 education revenues from federal, state, and local sources in 2015.” That’s huge. But every session, Dr. Arsen points out, “State revenues are down because policymakers have chosen to cut tax rates, create tax breaks, and rely on revenue sources that do not grow with the economy.”
This must stop. We advocate against these tax policy changes because Michigan once surpassed the national average for tax effort, but since 2002, the state’s tax effort has fallen significantly below the national average and has declined in general. As Dr. Arsen points out, “If Michigan devoted the same fraction of its economy to state and local taxes as the national average, it would generate an additional $3 billion in revenues per year, an amount nearly sufficient to lift school funding to the level that prevailed in 1994,” and fund much of the proposal developed by the School Finance Research Collaborative.
“Between 1995 and 2015, Michigan was dead last in revenue growth—50th out of 50 states. Michigan’s 2015 education revenue was only 82 percent of the state’s 1995 revenue.” It’s time to change that. It’s time to stop cutting revenue options, and it’s time to start looking at ways to fund Michigan schools.
We appreciate your efforts in advocacy. Know that while we may sound like a broken record, lawmakers need to be held accountable for talking about so-called record funding for schools but voting to decrease revenues year after year.