Mich. board asks gov, lawmakers to reduce ed cuts

Michigan's bipartisan State Board of Education urged Gov. Jennifer Granholm and lawmakers to find money to reduce cuts in public education and buy time for a long-term funding solution.

The 8-0 vote on Monday came after a series of blows delivered to public schools last week.

Democratic governor signed an education budget that contains a cut of $165 per student. But she also vetoed $51 million in extra funds for 39 wealthier districts and ordered another $127 per-pupil cut for all districts because of falling tax revenue.

The reductions will take effect unless more money is raised within a month.

The board heard from superintendents, former legislators and others in the public. Yet it was the testimony of three economic experts that prompted optimism that money for schools could be found if the political will existed.

The experts, who have different political backgrounds, agreed Michigan should lower its 6 percent sales tax but tax services that are exempt now - such as entertainment and landscaping, for example. Business-to-business services such as accounting and engineering would not be taxed.

"There was really agreement or consensus about the need for long-term restructuring of the tax system," said Board President Kathleen Straus, stressing that schools also must cut costs by consolidating transportation and other operations among districts.

Granholm and the Legislature tried taxing some services during a budget crisis in 2007 but reversed themselves following backlash from businesses that would have been affected. Consumers are generating less sales tax because they are buying fewer goods, which are taxed, and more services, which are not.

East Lansing economist Patrick Anderson, a former deputy budget director under Republican Gov. John Engler, said the 2007 attempt at tax restructuring was botched, but changes are still needed because the tax base has declined during what he called Michigan's "lost decade."

"We are now paying the price for our own negligence," he said.

Lou Glazer, president of Michigan Future Inc., a nonpartisan research organization in Ann Arbor, and a former member of Democratic Gov. James Blanchard's administration, said taxing services would better align the tax system to grow with the economy so there is money to prepare children for college. Having a work force with college degrees is crucial to revitalizing the state, he said.

"The places with the greatest concentration of talent win. If we don't do it, we're going to be one of the poorest places in the country," Glazer said.

Phil Power of the Center for Michigan, an Ann Arbor think tank, also backed a lower sales tax that would be applied to more things along with consolidating school janitorial services, maintenance contracts and bus systems, and ending or reducing term limits.

"You are beginning to find a coherent reform agenda," he said.

The board moved up its meeting by two weeks after learning of the cuts to public schools last week.