1. 1 “The Practitioners Summit” to Reform Public School Funding in Michigan

2. 2 “The longer an organization waits, the greater the risk that events will take control, and the organization will lose the ability to shape and direct its own future.” -William S. Woodsice, 1990 Chairman, Executive Committee Chairman, Board of Directors Institute for Educational Leadership (IEL)

3. 3 Areas of Emphasis Optimizing operating efficiency More equitable allocation of resources Stable and predictable funding

4. 4 What to do instead? The Expenditure Side

5. Issue #1 School District Consolidation 5

6. Vocabulary Adjustment Save “Reduce Costs” 6

7. 7 Administrative Cost / Pupil by Enrollment Category Michigan School Districts * * Data from the “1014 Report”, Michigan Department of Education, Administration and Business Expenses, 2007-08. 375 School Districts

8. Cost Studies on Consolidation Syracuse University study on cost implications of consolidating school districts. –http://www-cpr.maxwell.syr.edu/cprwps/wps33abs.htmhttp://www-cpr.maxwell.syr.edu/cprwps/wps33abs.htm Mackinac Center study on the optimal size for school districts. –http://www.mackinac.org/8530http://www.mackinac.org/8530 Maine’s attempt to force consolidation of school districts is voted down. –http://ballotpedia.org/wiki/index.php/Maine_School_District_Cons olidation_Repeal,_Question_3_(2009)http://ballotpedia.org/wiki/index.php/Maine_School_District_Cons olidation_Repeal,_Question_3_(2009) School district consolidation efforts in other states –http://www.nyslocalgov.org/pdf/School_District_Consolidation_in _Other_States.pdfhttp://www.nyslocalgov.org/pdf/School_District_Consolidation_in _Other_States.pdf 8

9. 9 Standardize Job Content THEN Consolidate Administration (If there are REAL savings) Position Point #1

10. Issue #2 Statewide / Regional Teacher Salary Schedules 10

11. Selected Average Teacher Salaries (2007 - 08) 11

12. 12 States with Statewide or Regional Teacher Salary Schedules Alabama Arkansas Delaware Georgia Hawaii Idaho Illinois Indiana Kentucky Louisiana Maryland Mississippi North Carolina Ohio Oklahoma Pennsylvania South Carolina Tennessee Texas Washington West Virginia 21 States!

13. Move to a Statewide / Regional Teacher Salary Schedule Position Point #2 13

14. Skyrocketing Cost of Health Care and Associated Administrative Cost Issue #3 14

15. *Tests found no statistical difference from estimate for previous year shown (p<.05). Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2009. Average Percentage of Premium Paid by Covered Workers for Single and Family Coverage 1999-2009* 15

16. Premium Co-Pay Options Hard Cap Soft Cap Using a Percentage Soft Cap with Fixed Employee Co-Pay 16

17. 17 Typical local consortium based health insurance bids

18. Interesting Factoid Annual Full-Family Teacher Health Insurance Premium (Cobra): $16,379.88 Annual Full Family State Employee Health Insurance Premium: $19,517.16 State Legislature refused to disclose but are self funded and fully vest after 6 years. 18

19. 19 Establish a Statewide Pool for Bidding Health Insurance With Premium Co-Pay Position Point #3

20. Skyrocketing Pension and Retirement Benefit Cost Issue #4 20

21. Citizen’s Research Council (Presented: October 28, 2009) 21

22. 22 Fix employer contribution? Defined benefit vs defined contribution? Health care? Issues to be Examined

23. 23 Review and Reform the Retirement System Position Point #4

24. Unequal (“Inadequate”) Resource Allocation of Instructional Staffing Issue #5 24

25. What’s the problem? Elimination of positions due to budget pressures vary from district to district –Increasing class sizes –Instructional support –“Specials Unfunded mandates –Special education –All day kindergarten –Michigan Merit Curriculum 25

26. 26 Standardize Instructional Staffing by Implementing a Position Allotment System Based on Enrollment Position Point #5

27. Simple, “One Size Fits All” Funding Formula Issue #6 27

28. Per Pupil Funding in Michigan (Why a competitive education system can’t be taken seriously) 28

29. 29 Funding Formula Concept A + B + C +…. = Total Funding Where: A = Transportation B = Textbooks C = Materials D = Technology E = Administration F = Certified Instructional Salaries

30. 30 Use Categorical Funding to Ensure Funding of Key Instructional Areas Position Point #6

31. 31 Who should pay for government? Question: Defense Universities Correctional System Court System Fire Protection Police Protection Schools Roads Oversight of Financial Institutions Social Security Medicare

32. 32 The SYSTEM for funding Michigan’s public schools is FAILING! Reality Points #7 & 8

33. 33 Revenue (Tax) Issues Non Homestead Property Tax –6 mill State Education Tax is exempt from Headlee…..18 mill Non Homestead tax is not exempt. Why? –Reduction in the personal property tax for business –Taxable value appeals

34. 34 Impact of “Tax Cuts” Grand Ledge Public Schools (Local Revenue for Operations)

35. 35 Impact of “Tax Cuts” Per Pupil Foundation Grant Grand Ledge Public Schools

36. 36 Michigan’s Constitutional Revenue Limit (Billions) Source: May 2009 Revenue Consensus Conference

37. 37 Tax Effort Has Reduced Substantially Michigan’s Per Capita Rank…#25

38. 38 Revenue (Tax) Issues Other “Revenue” Options? –Progressive Income Tax (4.35%) –Sales Tax (6% excluding food and Rx) –Sales Tax on Services (26 items) –Gas Tax ($.19 + sales tax) –Diesel Tax ($.15 + sales tax) –Corporate Income (4.95%)

39. Bottom Marginal Tax Rates in State Individual Income Taxes, 2008 1. North Carolina 6.00% 26. Alabama2.00% Tennessee 6.00** Kentucky2.00 3. Minnesota 5.35 Louisiana2.00 4. Massachusetts 5.30* Maine 2.00 5. New Hampshire 5.00** Maryland2.00 Oregon 5.00 Virginia 2.00 Utah 5.00* 32. New Mexico 1.70 8. Colorado 4.63* 33. Idaho1.60 9. Wisconsin 4.60 34. Missouri1.50 10. Michigan 4.35* 35. Hawaii1.40 11. New York 4.00 New Jersey1.40 Dist. of Columbia 4.00 37. Arkansas1.00 13. Vermont 3.60 California1.00 14. Kansas 3.50 Georgia 1.00 15. Indiana 3.40* Montana 1.00 16. Pennsylvania 3.07* 41. Ohio0.618 17. Connecticut 3.00 42. Oklahoma0.50 Illinois 3.00 43. Iowa0.36 Mississippi 3.00 44. South Carolina0.00**** West Virginia 3.00 21. Arizona 2.59 22. Nebraska 2.56Source: Federation of Tax Administrators 23. Rhode Island 2.50*** 24. Delaware 2.20 * Flat-rate income tax 25. North Dakota 2.10 ** Tax applies only to dividend and interest income *** State tax is 25% of federal tax liability **** First $2700 of “taxable income” has zero rate; next rate is 3.00% 39

40. Top Marginal Tax Rates in State Individual Income Taxes, 2008 1. California10.30% 30. Maryland 5.50% 2. Rhode Island 9.90 *** Oklahoma 5.50 3. Vermont 9.50 32. Massachusetts 5.30 * 4. Oregon 9.00 New Mexico 5.30 5. Iowa 8.98 34. Alabama 5.00 6. New Jersey 8.97 Connecticut 5.00 7. Dist. Of Columbia 8.50 Mississippi 5.00 Maine 8.50 New Hampshire 5.00 ** 9. Hawaii 8.25 Utah 5.00 * 10. Minnesota 7.85 39. Colorado 4.63 * 11. Idaho 7.80 40. Arizona 4.54 12. North Carolina 7.75 41. Michigan 4.35* 13. Arkansas 7.00 42. Indiana 3.40 * South Carolina 7.00 43. Pennsylvania 3.07 * 15. Montana 6.90 44. Illinois 3.00 * 16. New York 6.85 45. Alaska 0.00 17. Nebraska 6.84 Florida 0.00 18. Wisconsin 6.75 Nevada 0.00 19. West Virginia 6.50 South Dakota 0.00 20. Kansas 6.45 Texas 0.00 21. Ohio 6.24 Washington 0.00 22. Georgia 6.00 Wyoming 0.00 Kentucky 6.00 Louisiana 6.00 Missouri 6.00 Source: Federation of Tax Administrators Tennessee 6.00 ** 27. Delaware 5.95 * Flat-rate income tax 28. Virginia 5.75 ** Tax applies only to dividend and interest income 29. North Dakota 5.54 *** State tax is 25% of federal tax liability 40

41. 41 Local Revenue Options Currently 50 Michigan school districts have the authority to levy a local millage for school operations. This is blantantly unequal! Eliminate, expand or restrict?

42. 42 Visit us Online Twitter: Social networking builds online communities. We can communicate with others in a free, interactive way. Blogspot: Post information, editorials, more casual conversation. Google Sites: Website platform for position paper, updates.

43. 43 twitter.com/SchlFndngSummit

44. 44 http://mischoolfunding.blogspot.com/

45. Questions?