The Ugly Truth Behind Michigan's Budget Surplus
Michigan is a model of fiscal recuperation. At least that’s what the headlines said as I stepped off a plane in Detroit recently: its spending was slashed so ruthlessly in the past few years that the New York Times quoted a former state budget director as moaning, “We were so far down that the floor looked like up to us.” But now there is a budget surplus projected for 2013, of anywhere from half a billion to a billion dollars, with yet sunnier fiscal predictions ahead. This apotheosis is generally credited to the enactment of Republican Governor Rick Snyder’s stern austerity policies, which include replacing “a business tax with a corporate income tax that is expected to save businesses $1.5 billion a year,” according to the same Times article. “To make up lost dollars, lawmakers agreed to tax public workers’ pensions, reduce the state’s Earned-Income Tax Credit for the working poor, and remove or reduce other tax exemptions and deductions.”
On the ride from the airport, my friend Dee gave me an earful about what he described as “Snyder’s for-profit governance, while for us ordinary non-corporate humans, things just get bleaker.” The schools are decimated, he told me. Infrastructure is crumbling, zoos and parks are being eliminated, libraries closed and daycare all but nonexistent. Snyder has slashed funding for the state’s colleges and universities by 15 percent in the past year alone.
Moreover, Detroit is on the verge of financial ruin, in no small part because since 1998 it has been hobbled by a law requiring all cities to cut personal income taxes every year, for residents as well as nonresidents. Exemptions are given only if a city is in financial distress—a status virtually guaranteed by such cuts. “Financial distress” in turn triggers Public Act 4, an insidious law—detailed by Chris Savage on page 6 of this issue—that permits the governor to appoint an “emergency manager” (EM) whose job is, no joke, to displace elected officials and run local governments as though they were private, profit-driven corporations. Yet for all their considerable power, EMs lack the one thing that cities like Detroit need most (Republican dictum notwithstanding): the power to raise taxes. (Not that one would want a trickle-down executive branch boss like an EM tackling taxes, in addition to disappearing local legislative structures like city councils and school boards.)
EMs are balancing budgets by gutting government itself: selling off water and sewer lines (Flint), “redeveloping” public parks into private golf courses (Benton Harbor) and threatening to dissolve school districts (Highland Park). Detroit public schools, 80 percent of which fail to graduate any students with a college-qualifying ACT test score, have been taken over by GM’s former vice president for North American vehicle sales.
Meanwhile, in response to Governor Snyder’s recent intimation that funding for public universities may eventually depend on their graduation and student retention rates, the third-largest school in the system, Wayne State University, hastily revamped its admissions policy to include what a corporation might call “dashboard” measures that evaluate learning and retention as a matter of “value added.” “Value added” is a term widely introduced to the world of education as part of the Bush administration’s determination to turn learning into a business. Derived from economics and contract law, it ordinarily refers to the difference between production costs and sale price. While such arithmetic works well in the manufacturing of steel ball bearings, it’s somewhat less utile when grading an archaeology seminar or the translation of a poem.
“Value added,” snapped Dee, “is the ultimate emblem of a ‘knowledge economy’ rather than regard for actual knowledge.” He fears it will push Wayne State further from its mission as the only urban campus in the system, one that has historically served predominantly blue-collar students who may be working multiple jobs and supporting families while going to school. Like the City University of New York, Wayne State has served as a portal for generations of strivers whose circumstances might constrain them to a trajectory of eight, ten or even fifteen years to earn enough credits to graduate. Such hard-working students will now be written off as failures for dragging down the value-added goal of four-year graduation rates. The Detroit Free Press reports that in screening for applicants most likely to graduate in the requisite amount of time, Wayne State plans to create three groups: “those accepted, those who first need to complete an eight-week summer ‘bridge’ academic program, and those who will be counseled to attend a community college, trade school or even the military.”
Not surprisingly, many fear that students in Detroit’s already underserved public high schools will be passed over in even greater numbers as university seats are outsourced to wealthier students from out of town, from out of state or from other countries—from anywhere primary education is better funded.
But what of the budget surplus? I asked Dee. Surely that found money could be put to the rescue? Alas, no. Of more than $1 billion in cuts to school budgets last year, Snyder is restoring less than half—and not to per capita expenditure on pupils but for incentive programs. Schools that perform best will get the most money; those that “fail” could be eliminated. In other words, those with the most troubled students or least experienced teachers or children who speak little English or with high percentages of learning disabilities—those are the schools most likely to be assigned less assistance, less investment, less hope.
“Michigan’s future is dependent upon the education system,” says Michigan State Representative Jeff Irwin, who has called for funds taken from K-12 to be reappropriated. And to those in the Snyder administration who would prefer to squirrel the bulk of the surplus away for a rainy day, Peter Spadafore, who sits on Lansing’s school board, has a curt riposte: “It’s raining.”