Citizens for KPS

On behalf of all the students in all nine school districts in Kalamazoo County, we first of all want to thank the voters for their support of this millage renewal.

The 57% margin for the millage reflects broad countywide support for the millage. Our preliminary analysis suggests that not only was there strong support from KPS and Portage Public Schools for this millage renewal, but that support from the rest of the county significantly increased compared to 2005. We believe this greater support throughout the county reflects greater voter awareness of how this millage provides better services to students in all county school districts.

We also want of course to thank our many Citizens for KPS volunteers and supporters. Hundreds of people worked many volunteer hours for this campaign. And it paid off. The estimated Yes margin for the KPS district was about 67%.

This millage renewal allows all nine school districts in the county to continue their forward momentum. All nine school districts in the county face the challenge of moving forward to meet society’s higher expectations of our schools. For example, all nine school districts must make sure all students can meet Michigan’s new, tougher high school graduation requirements. This millage renewal will be a great help in that effort.

KPS faces the unique opportunities and challenges of the Kalamazoo Promise. We must make sure that each and every student in our district graduates from high school with the skills they need to have the OPTION of taking full advantage of the Kalamazoo Promise. This means that each student’s skills when leaving high school must be sufficient to be successful in post-secondary education. Students may choose other options, such as the military or civilian employment, but they should have sufficient skills that successful completion of post-secondary education is a real option. The millage renewal helps continue the financial support needed for KPS to keep moving forward and improving the achievement of all our students, at all levels.

For the broader Kalamazoo community, this millage renewal means that it is realistic to talk about this community being committed to better education and skills as the route to economic success. As we have argued throughout the campaign, this is the best way for the Kalamazoo region to survive and thrive in a global economy.
 

One anti-millage renewal website recently posted the following statement by one of their readers:

“[T]here is no evidence that spending more money makes schools stronger.”

This is a commonly held belief. However, the research evidence does not support this belief. More spending on schools, if that spending is focused on the classroom, has been found by rigorous research to significantly improve student achievement.

The best recent review of the research on school resources and student achievement is by Alan Krueger, Professor of Economics at Princeton, in a paper entitled “Economic Considerations and Class Size”. http://www.irs.princeton.edu/pubs/pdfs/447.pdf . (This link is to a free working paper version of this paper; the paper has since been published in the Economic Journal.) Class size, or pupil-teacher ratio, is one of the most important factors in determining school district spending per student. In addition, class size is easier to measure in similar ways across different school districts than is the case for other school spending variables, which may be reported in different ways across districts or certainly across states.

What Professor Krueger finds, in reviewing 59 studies of the effects of class size on student achievement, is that although these studies include a wide variety of results, the average effect of lower class size on student achievement, if all studies are given “one vote”, is to significantly increase student achievement. There are almost twice as many studies that find that lower class size has significant positive effects on student achievement, compared to studies finding that lower class size has significant negative effects on student achievement. The effects of lower class size in improving student achievement become even stronger when we place greater weight on studies that appeared in more highly regarded academic journals.

More importantly, the most rigorous scientific study of the effect of class size on student achievement finds effects that are statistically significant and large. Only one study, Project STAR, has randomly assigned both students and teachers to large and small class sizes, and then followed students to see what effects different class size has on student achievement.  Students were randomly assigned to class sizes during grades K-3 that averaged 15 students per teacher for the “treatment group”, and averaged 22 students per teacher for the “control group”.

A random assignment experiment has some significant methodological advantages over the usual social science study that attempts to estimate the “effect” of lower class size. In the usual social science study, lower class size is not randomly assigned to students. Lower class size may occur for many reasons that may bias the estimates. For example, if the government tries to make class size lower for schools or school districts with many students from low-income families, then students with lower class size will tend to come from families with lower incomes. Because lower family income is associated on average with lower test scores, this correlation may make it appear that lower class size is “causing” lower test scores, which is a mistaken inference. In contrast, in a random assignment experiment such as Project Star, because students and teachers are randomly assigned to different class sizes, there will on average be no expected difference between students in low class sizes, and students in higher class sizes, except for the class size difference.

The best recent summary of the evidence from Project Star is a paper by Diane Whitmore Schanzenbach, an assistant Professor at the public policy school at the University of Chicago, entitled “What Have Researchers Learned from Project STAR?” The paper is available at http://harrisschool.uchicago.edu/About/publications/working-papers/pdf/w... .(This link is to the working paper version of the paper; the paper has since been published in Brookings Papers on Education Policy.)  

What Professor Schanzenbach and other researchers have found is that lower class sizes in grades K-3 significantly increase student achievement, both during grades K-3 and subsequent grades. In addition, lower class size in grades K-3 seems to have long-term effects in increasing the percentage of students who take college entrance exams such as the SAT or ACT, which suggests that more students who were in lower class sizes end up being interested in going to college and attending college.

Schanzenbach and other researchers have used these findings to estimate how the costs of lowering class size compare with the benefits of lower class size. Benefits are measured as the predicted increase in earnings for students due to lower class sizes, which can be predicted based on studies that predict students’ future earnings based on their test scores during school. The finding is that spending more money on lower class size has an estimated “real rate of return” (after adjusting for inflation) of 5 to 10 percent, which compares very favorably to most investments.

In sum, there is significant research evidence that devoting more resources to the classroom can pay off in increased student achievement. This increased student achievement then pays off in higher earnings and an expanded economy.

 

Local public radio station WMUK did a story on April 30 on the millage. A transcript of the story can be found at http://wmuk.org/election.htt?select_race=t&pkeyElectionRaceID=76 . This link also includes links to an audio version of the story, and links to interviews with: Tim Bartik of Citizens for KPS; Shirley Johnson, President of the Portage School Board; and Ray Wilson of the Kalamazoo County Taxpayers Association.

In his interview, Mr. Wilson repeats an argument that is sometimes made against the millage. The argument goes as follows, to quote Mr. Wilson: “...[I]n the 3 years of the KRESA tax, funding from the state has gone up 7.5%, the foundation grant, which is roughly the cost of inflation. Now, that’s not a huge increase, but it is an increase. And it takes away the original justification that they hadn’t had any increase in funding. The schools have had increases in funding from the state during those 3 years, so it gets rid of the justification for the KRESA tax.”

Several points refute this argument: 

1. Inflation during the past 3 years has been 9.8%. 7.5% is not “roughly the cost of inflation”, but 2.3% less than inflation. (See previous post , "The Real Level of School Funding Per Student".)

2. Although most school districts in Kalamazoo County received an increased foundation grant of 7.5% from 2004-05 to 2007-08, Kalamazoo Public Schools only received an increase of 6.3%.

3. Finally, there is a point of logic. Three years ago, county voters decided by a majority that the funding per student received from the state was inadequate, and should be supplemented by the enhancement millage to ensure adequate services to students. Even if the foundation grant increase for all school districts had been as great as the rate of inflation (which it was not), this would imply that the real funding from the state would have been unchanged. The need for the millage funds to maintain adequate services to students would be the same in 2008 as in 2005. Because the rate of increase in funding was actually less than the rate of inflation, the need for millage funds to maintain adequate services to students is greater in 2008 than it was in 2005.

Point 3 can be illustrated by an extreme example. Suppose all prices doubled, and the state foundation grant per student doubled. Could anyone legitimately claim that the schools would be able to afford to provide better services? The schools would have twice as much in dollars, but if prices have doubled, the schools need to spend twice as much to provide the same level of services.

In other words, once one adjusts for inflation, schools have NOT received a real increase in the state foundation grant per student. In fact, the real per student foundation grant has been reduced in the three years since the enhancement millage was passed.

 The Sunday April 27 Kalamazoo Gazette included a number of quotations that attest to the importance of the May 6 millage renewal to economic development:

William U. Parfet, MPI Chairman and CEO: “Seventy percent of the people who work at MPI have at least a bachelor’s degree. Low taxes are important, but quality of education is critical.”  http://www.mlive.com/news/kzgazette/index.ssf?/base/news-28/1209270011193700.xml&coll=7

 

Ron Kitchens, President and CEO of Southwest Michigan First, the area’s economic development organization: “One of the top priorities for businesses, whether they are already here or considering locating here, is the condition of K-12 education. They never ask if we have average school systems. They want to know their families will have superior opportunities through the public school systems. They want their children to advance to good jobs through technical training or higher education beyond high school. If we want to be known as ``education communities,'' we cannot shrink from our responsibility to fund our public schools in a superior manner….”

 And more from Ron Kitchens: “Now is not the time to force operating budget deficits by defeating the renewal of this millage. If teacher layoffs and program cuts are in the headlines after May 6, those who have us on their radar will simply look elsewhere….”

 Ron Kitchens again: “If you want to support economic development in the region, the best way to do it is to support the public school systems. We are all in this together.” http://www.mlive.com/news/kzgazette/index.ssf?/base/columns-4/1209270039193700.xml&coll=7

 

Ken Nacci, Executive Director of Dowtown Kalamazoo Inc.: “For MPI to grow 3,000 jobs, they need to attract people here, and it's not just salaries that draw people to an area, but quality of life -- that means being in a college town, having quality hospitals, quality schools….[The announcement] is the private sector stepping up, and now it means [voters] have to step up and support school systems [as an essential part of the infrastructure for business growth]”. http://www.mlive.com/news/kzgazette/index.ssf?/base/news-28/1209270011193700.xml&coll=7&thispage=4

 

Kalamazoo Gazette Editorial Board: “Yes to KRESA Tax Renewal Says Yes to Education…[W]e urge voters within the Kalamazoo Regional Educational Service Agency district to renew the 1.5-mill property tax, to be shared by all nine public school districts within KRESA.

If the tax is approved by voters, their KRESA property taxes will not rise. They will stay the same.

If voters turn down the renewal, homeowners will receive a small property tax cut. But the negative consequences to local public schools would be enormous…”

The Gazette editorial again: “For many communities, the renewal of the enhancement tax isn't just about gutting school programs and laying off teachers. It's an economic development issue.

And they're right.

The Kalamazoo area, bolstered by The Kalamazoo Promise and reinforced by fine higher education institutions, has been transforming itself into the Education Community. The area has been positioning itself as a place where companies seeking highly skilled, well-educated employees can set up shop and thrive.

We're already seeing the early fruits of that strategy. Last week, MPI Research, a Mattawan-based company, announced it would triple its workforce over the next five to seven years. Parker Hydraulics has won billions of dollars in contracts from airplane manufacturers. Kaiser Aluminum has announced it intends to build an $80 million plant here.

After years of hard work, the local economy's momentum is going the right way. A vote against this enhancement tax renewal could severely undermine that economic progress….”

More from the Gazette editorial: “By saying ``yes'' to the KRESA enhancement millage renewal on the May 6 ballot, we say ``yes'' to continuing this community's positive momentum. “ Full editorial at http://www.mlive.com/news/kzgazette/index.ssf?/base/columns-3/1209270040193700.xml&coll=7&thispage=1 

Peter Luke, reporter and columnist for the Lansing Bureau of Booth Newspapers: “In addition to tax breaks approved for MPI and Hemlock Semiconductor, Michigan's whole business tax structure has been reconfigured to reward hiring and to ease the property tax burden on large manufacturers.

Education, however, is the other half of the equation.

As the [Center for Automotive Research] report noted, a big concern going forward is the availability of skilled applicants with advanced math, literacy and communication skills during what is expected to be a "rapid pace of turnover."

"The nature of production work is becoming more and more complex as the products -- and the technology used to build it -- become more and more advanced," the report said.

That's true not just in the car industry, but in every employment sector the state needs to grow in the coming years, be it other advanced manufacturing -- such as solar panels -- or in life sciences, health care, finance and information technology.

If the next decade produces job opportunities lost in the current decade, those openings are going to demand more and more from the applicants.

Gov. Jennifer Granholm and lawmakers have been pretty nimble in crafting creative financial incentives necessary for new business growth in this dog-eat-dog competitive climate.

Now, they have to show they can be equally nimble -- and creative -- in ensuring that education at the local level produces the skilled workers this apparent economic transition is going to require.” http://www.mlive.com/grandrapids/stories/index.ssf?/base/news-0/1209276996128590.xml&coll=6&thispage=2  

 

 

 

An article by Julie Mack in the April 27 Gazette discusses the important point that overall KRESA taxes are about average in Michigan, even though the enhancement millage is unique.

In the Southwest Michigan region, KRESA’s overall taxes, even with the enhancement millage, are significantly below those of Van Buren County. This makes a difference for local school districts because most taxes levied by intermediate school districts end up directly or indirectly supporting services provided by local school districts. The more the intermediate school district does, the more resources are available to local school districts for other educational services to students.

From the Gazette article: “Even with Kalamazoo County's regional education tax, Van Buren County school districts already have a revenue advantage.

That's because of the difference in the way the Kalamazoo and Van Buren intermediate school districts subsidize their member districts.

The Kalamazoo Regional Educational Service Agency is the only ISD in Michigan with an enhancement tax that provides member school districts with an unrestricted revenue source.

But KRESA does not levy a vocational-education tax, which is more common among districts.

Both the Van Buren ISD and KRESA levy about 1.4 mills for ISD operations. But Van Buren ISD also levies 3.4 mills for special education and 2.55 mills for vocational education for a total ISD tax of 6.1 mills. In contrast, KRESA levies 4.5 mills, including the 1.5-mill enhancement tax and 2.9 mills for special education.

The higher tax levy means Van Buren schools have their special-education and vocational-education costs covered by the Van Buren ISD. Kalamazoo County districts have a lower reimbursement rate for special education services from KRESA and the nine districts divide the costs for Education for Employment, the county's vocational-education program.

The Van Buren ISD provides services that average $1,170 per county student, compared to KRESA's average per-student contribution of $981. Those subsidies help free up dollars in school districts' operating budgets. If the 1.5-mill KRESA tax is not renewed May 6, the KRESA subsidy for students would drop to $650 per student.”

The full article is at http://www.mlive.com/news/kzgazette/index.ssf?/base/news-28/1209270011193700.xml&coll=7

 

 

 

At its Thursday, April 24 meeting, the Kalamazoo School Board received a presentation by Gary Start, KPS’s Deputy Superintendent, on KPS’s budget options for the 2008-09 school year. These options are dramatically different depending upon whether the millage renewal passes on Tuesday, May 6.

What would be the consequences of a defeat of the millage renewal? To summarize, these consequences include:

1. If the renewal is defeated, the District could not consider new initiatives such as: behavioral alternative schools for secondary students, to provide students who have significant behavioral problems with targeted assistance in a separate setting; or,  a dual language school in the Vine neighborhood.
2. The District would have to consider freezing employee pay, rather than the baseline budget’s proposed nominal increase of 1%.  A freeze in employee pay would mean that employees would face a reduction in their real standard of living, given that inflation between the 2007-08 and 2008-09 school year will probably be at least 3%.
3. The District would have to consider a wide range of cuts that would gut District budgets for textbooks, supplies, athletics, and transportation, after these budgets have already been cut extensively over the past 8 years.
4. Even if all of the above was done – no new initiatives, a freeze in employee pay, and gutting District support budgets – the District could only balance its budget, if the renewal millage fails, by making at least 2 out of 5 major cuts in services to students. These 5 possibilities for major cuts include:

*** Increasing class size in some elementary schools to 26 to 1 in kindergarten and 29 to 1 in grades 1 through 3 ;

*** Increasing high school class size by cutting 6 teaching positions;

*** Eliminating elementary instrumental music instruction;

*** Eliminating funding for magnet schools to carry out their themes, for example, eliminating funds for the Northglade Montessori School to carry out its Montessori approach;

*** Significantly cutting middle school budgets for security, home/support interventionists, and tutoring.

Alternatively, instead of completely cutting 2 out of 5 of these areas, less extensive cuts could be made in all 5 of the areas, for example elementary school class size could be increased, but only to 27 to 1 in grades 1 through 3.  But if the District did not adopt all the other budget cuts, for example did not gut District support budgets, then more budget cuts would have to be adopted in these 5 major areas of services to students. 

These budget details emphasize a key point that all voters should understand: defeat of the millage renewal will lower taxes modestly, but will have significant effects in reducing real services to students.

Mr. Start’s April 24^th powerpoint presentation on KPS budget options can be downloaded from http://www.kalamazoopublicschools.com/education/components/docmgr/default.php?sectiondetailid=469&fileitem=4752&catfilter=764

A pdf version of this powerpoint is at http://www.kalamazoopublicschools.com/education/sctemp/0e24247e3338dcc16...

The Kalamazoo Gazette's coverage of the April 24th Board meeting can be found at http://www.mlive.com/news/kzgazette/index.ssf?/base/news-28/120913502156...

 

The April 22^nd announcement that MPI Research will create 3,300 jobs in the Kalamazoo area, including 400 in downtown Kalamazoo, is wonderful news for the future of the Kalamazoo economy.  This announcement suggests that the Kalamazoo area’s economic development strategy, which is focused on trying to create high-skill and high-wage jobs,  is beginning to pay off.

The Kalamazoo area’s strategy has been spearheaded by Southwest Michigan First, and its CEO, Ron Kitchens. A part of that strategy is trying to promote the Kalamazoo area to businesses as the “Education Community”.  According to Mr. Kitchens, as quoted in the March 30 Gazette,  “You can’t be the Education Community if you don’t invest in education.”  Therefore, a defeat of the millage renewal “would devalue the long-term economic structure of our economy.”

Of course, the MPI announcement, or any business location decision, has many determinants. The MPI expansion decision was probably based on many factors, including  the location of its customers, the availability of real estate, the interest of MPI CEO William U. Parfet in the future of the Kalamazoo area, and tax incentives offered by state and local governments. But MPI’s expansion decision and other business location decisions depend in part upon the quality of life in the Kalamazoo metropolitan area.

Kalamazoo County and Van Buren County are part of one metropolitan area, which means that government statisticians have concluded that there is sufficient commuting across county boundaries that the counties are really part of the same labor market.  Businesses are attracted to metropolitan areas that offer high quality of life to their employees, which makes it easier to attract and retain high-quality workers. Quality of life includes many factors. One of these quality of life factors is a high quality of education.

A high quality of education is particularly important to businesses, such as MPI, that employ many highly-educated workers. Highly-educated employees will be more attracted to a metropolitan area that offers many options for high-quality education for their children.

One example of how high-tech businesses value high quality education is that  the former Upjohn Company helped initiate and fund the creation of the Kalamazoo Area Math and Science Center.   This funding support may have been in part intended to help make the Kalamazoo area more attractive to potential employees such as research chemists.

Over the last 3 years, the enhancement millage has helped the 9 school districts in Kalamazoo County to maintain higher quality education services to students. Because the state has reduced real per student spending over the last 3 years, the $11 million provided by the enhancement millage is needed even more today. The millage renewal, as argued by Ron Kitchens, will help improve the “long-term economic structure of our economy.”

 

The April 20 Gazette Viewpoint by David Kreager and Debra Ryan, from the Gull Lake School Board, presented a philosophical argument against the millage. However, there is little substance behind their philosophy.

The essence of their complaint is that rather than enacting the millage, the other school districts in the county should make “difficult decisions” to cut budgets. But they have no concrete proposals to make that would allow such “difficult decisions” to actually reform school budgets in a way that will not harm services to students.  Their op-ed evades a “difficult reality” for their point of view: if  their position prevails, and the millage renewal is defeated, the quality of educational services to students would be reduced, which would hurt both students and the county’s economic growth.

Their ideas for budget cutting include: “consolidation of more school services, creating more leverage to reduce health-care costs, sharing of best practices that better utilize school revenue, or ideas on how we can lobby Lansing to address school funding issues”. There is no way that these proposals would reduce school budgets by anywhere close to the $11 million raised countywide by the millage renewal.

“Consolidation of more school services”:  County school districts already do some consolidation of school services through KRESA, in areas such as special education, career and technical education, arts education, and purchasing. Furthermore, as Julie Mack, education reporter for the Gazette, discussed in her School Zone blog on April 3^rd, research suggests that once a school district is more than 1500 students or so, there are no significant cost-savings from further school consolidation. (See http://blog.mlive.com/schoolzone/2008/04/economies_of_school_consolidat.html )  The overwhelming majority of students in Kalamazoo County attend school districts with more than 1500 students. Therefore, the cost savings from further consolidation of school districts in Kalamazoo County are minor. And this ignores arguments against consolidation from a perspective of community autonomy.

“Creating more leverage to reduce health-care costs”: They don’t explain what this means, and it is difficult to see how any “leverage” results in easy reductions in health care costs. As has been made clear repeatedly at this website, public schools in Kalamazoo County have already taken considerable steps to reduce health care costs, which is primarily done through increasing employee cost-sharing for health care costs. Given increasing health care costs, school districts will continue to make reforms in employee health care, with or without the millage renewal. Any such reforms will have to recognize that significant increases in employee cost sharing will have to involve some offsetting increases in regular wages, if the teachers’ wage and benefit package is to continue attracting and retaining high-quality teachers.

“Sharing of best practices that better utilize school revenue”:  This suggestion is vague. County school boards and administrators already extensively discuss cost-savings ideas. There are no new “best practices” that will save $11 million.

“Ideas on how we can lobby Lansing to address school funding issues”: It is unclear how anything more that can be done will immediately make a substantial change in school funding. Kalamazoo County school districts already lobby Lansing extensively on school funding issues, both directly and through various lobbyists, including the Michigan Association of School Boards. For example, the Kalamazoo School Board meets at least once a year with all the state legislators that represent our school district, to explain to these legislators how the state’s budget priorities are adversely affecting the quality of services we can offer to students.  Despite the extensive lobbying that has already been done of Lansing, since 2005 the state government has cut real funding per student, adjusted for inflation, by more than 3%.  The local conversation and decisions about the millage would be quite different if Lansing’s budget priorities had been different, and Lansing had raised school funding over the last 3 years by 3% more than inflation.

Part of Mr. Kreager and Ms. Ryan’s position appears to be based on second guessing the budget decisions of the other 8 school districts in the county, and claiming that Gull Lake’s budget decisions have been superior.  According to their account, Gull Lake has used the enhancement millage revenues to meet capital needs, whereas most of the other school districts have used the money for operating purposes.

Their judgment fails to reflect the different budget situations facing different school districts. Some county school districts have faced budget challenges that are far greater than those faced by Gull Lake. For example, at the time the enhancement millage passed in 2005, Kalamazoo Public Schools’ budget situation was that the budget was to be cut $2 million if the millage passed, versus $5 million if the millage failed. And these budget cuts followed $17 million in budget cuts that KPS had already made since 1999. Therefore, the KPS Board made the decision to devote the enhancement millage revenues to reduce the magnitude of cuts in services to students, which means that the millage was spent for operating purposes.

Despite the Kalamazoo Promise, and the resulting increase in enrollment and revenue for KPS, KPS’s net budget cuts since 1999 are still about $17 million. From the perspective of KPS students, it still is a reasonable decision to use the millage revenues to maintain better educational services to our students.

Behind Mr. Kreager and Ms. Ryan’s Viewpoint is the notion that Kalamazoo County should best compete for businesses through eliminating the enhancement millage, even if this comes at the cost of reduced services to students. What this fails to recognize is that business location decisions depend on the quality of local public services, and in particular the quality of local education. Of course, business location decisions also depend to some extent on local taxes, as well as on many other factors, such as local wages, the productivity of local workers, the quality of local transportation infrastructure, etc. 

How does this all add up in terms of the best economic development strategy for Kalamazoo County? From the standpoint of the county’s economic development, is it better to cut taxes modestly through defeating the enhancement millage, even if this means cuts in services to students? This is a matter of judgment, and of weighing the importance of taxes vs. educational services at this point in the county’s economic history. Kalamazoo County is certainly never going to be the lowest cost business location in the world. Kalamazoo County can, however, be one of the highest labor productivity business locations in the world. And labor productivity depends upon local education,  which helps to attract highly educated and skilled parents, and helps increase the skills of future workers.

Mr. Kreager and Ms. Ryan briefly refer to “one community leader”, without naming him, who said in the Kalamazoo Gazette that it would be “economic suicide” to defeat the enhancement millage.  The community leader they do not name is Ron Kitchens, CEO of Southwest Michigan First. Ron Kitchens’s sole job is to maximize the economic growth of this county. His job depends upon making accurate judgments about whether the community’s economic growth is better increased through lower taxes, or through maintaining educational services to children.

Mr. Kreager and Ms. Ryan’s response to Ron Kitchens is to argue that he doesn’t understand that Gull Lake used the enhancement millage for capital purposes,   with the implication that using the millage for capital purposes will not affect business location decisions. Whether or not using millages for capital purposes affects business location decisions is certainly debatable. But in any event, Mr. Kreager and Ms. Ryan then contradict themselves by pointing out that most school districts in the county, based on their individual budget circumstances and their students’ needs, have used the enhancement millage for operating purposes, which certainly immediately affects the quality of educational services to students.  Therefore, it appears that Ron Kitchens does accurately understand that eliminating the $11 million provided by the millage would adversely affect educational services to students. It is this adverse impact on students that is of concern for the county’s economic development.

It is worth looking more fully at what Ron Kitchens said, as quoted in the March 30 Gazette. (Available at http://www.southwestmichiganfirst.com/pdf/03302008_Gazette_Can%20taxpayer%20pain%20produce%20exonomic%20gain%20for%20county.pdf )

 From the March 30 Gazette:

“It would be economic suicide to take that $11 million out of the schools right now,'' said Ron Kitchens, chief executive officer of Southwest Michigan First, the county's economic development agency.

``The amount it would take off tax bills is not enough to have a real impact on citizens or the cost of doing business, but it is enough that the impact would be pretty immediate for school districts. It would devalue homes. We would immediately lose jobs and lower the quality of children's educational experience. It would devalue the long-term economic structure of our economy.''

Kitchens said failure to renew the millage would undermine attempts to brand the Kalamazoo area as the Education Community. ``You can't be the Education Community if you don't invest in education,'' he said.” End of quote from Gazette.

There is nothing in Mr. Kreager and Ms. Ryan’s Viewpoint that effectively contradicts this argument. A defeat of the enhancement millage would not only reduce educational services to students, but would also harm the county’s economic future.

A front-page article in the April 15 Gazette provides testimony  that all of the 9 school districts in Kalamazoo need the enhancement millage to continue providing adequate services to students. This is NOT just an issue for Kalamazoo Public Schools and KPS students.

In the article, Gazette education reporter Julie Mack quotes from a April 14 meeting between county school superintendents and Gazette editors and staff. At that meeting, Doug Knobloch, superintendent of Schoolcraft Community Schools, said the following:

“Passage is critical to all nine districts...The idea that we can continue with things that are now required [under the state’s new graduation requirements] without reducing programs in some other areas, it can’t be done [without adequate funding].”

At this same meeting, Geoffrey Balkam, superintendent of Climax-Scotts Community Schools, is quoted as saying that the millage is “absolutely critical” for Climax-Scotts, and that “our district is on the ropes.”

All 9 school districts in the county have had to deal with declining real funding levels from the state over the past 6 years. All 9 districts are trying to upgrade the quality of education so that all students can meet the state’s tougher graduation requirements, and be able to succeed in the workforce or in post-secondary education.

It is sometimes said that Kalamazoo Public Schools may not need the enhancement millage as much, because of the Kalamazoo Promise. (This point was raised during a debate on the enhancement millage sponsored by the NAACP on April 14.) It is true that enrollment increases due to the Promise have brought in new revenue to KPS, as the state provides funding on a per student basis. Of course, new students require additional teachers and other services, so the net improvement in Kalamazoo’s budget situation is considerably less than the revenue from the new students.

However, KPS’s recent enrollment increases have not come close to making up for years of funding shortfalls from the state. From 1999 to 2005-06, the year the Promise was announced, KPS cut over $19 million from its annual budget. In the last 2 years (2006-07 and 2007-08), the increase in enrollment has enabled KPS to restore a cumulative total of about $2 million in program increases. The net program cuts from 1999 to the present are still about $17 million.

The link to the Gazette’s April 15 front page article is currently http://www.mlive.com/news/kzgazette/index.ssf?/base/news-28/120827103177...
This link may be moved or archived over time.

An April 15 letter to the editor of the Gazette stated that “Over the past three years, per-pupil school funding has increased 7.5 percent, roughly the rate of inflation.”
 

This letter reflects some misunderstanding of school funding issues. First, the quoted statement is not true: per-pupil school funding HAS significantly lagged the rate of inflation. Second, the argument in this letter confuses “trends” in real school funding per pupil with “levels” of real school funding per pupil. It IS true that over the past 3 years, real funding per pupil has not declined as fast as it did in the previous 2 years. Real funding for schools is not declining as fast as it had been declining. But that does not mean things are getting better. Real funding per student is significantly below what it was when the millage was passed in 2005. It is likely to deteriorate further in the 2008-09 school year. Therefore, the enhancement millage is needed even more today than it was when it was first passed in May of 2005.

Now, the details behind the previous paragraph.

The letter-writer does not explain what years he is comparing. He is probably comparing per pupil funding for the 2004-05 school year with funding for the 2007-08 school year. Over that three year time period, for 7 of the 9 school districts in Kalamazoo County, per pupil funding increased by 7.5%. (In Galesburg-Augusta, per pupil funding increased by 7.4%. More on the 9th district in a minute.)

However, prices increased during that three year time period by 9.8%. (See note below on how this increase was calculated using official data from the U.S. Bureau of Labor Statistics.) Therefore, real funding per pupil lagged 2.3% behind prices (7.5% vs. 9.8%). The increase in per-pupil funding has NOT been “roughly the rate of inflation”.

Furthermore, over this same time period, one district in Kalamazoo County received significantly less than a 7.5% increase. That school district happens to be the largest school district in the county, Kalamazoo Public Schools. From 2004-05 to 2007-08, the foundation grant per pupil for Kalamazoo Public Schools increased by 6.3%. This is 3.5% less than the rate of inflation over this time period.

If we look forward, to the 2008-09 school year, the foundation grant per pupil appears likely to increase by considerably less than the inflation rate. The School Aid budget passed by the Michigan Senate increased the foundation grant per pupil for 2008-09, compared to 2007-08, by 1.7% for KPS, and by 2.0% for the other 8 school districts in Kalamazoo County. Of course, we don’t know yet what inflation will be from 2007-08 to 2008-09. But it appears likely to be considerably more than 2%. Prices increased from February 2007 to February 2008 by over 4%. Even if the inflation rate slows down a bit, it appears likely that inflation from 2007-08 to 2008-09 will be more than 3%. Therefore, real state funding per pupil is likely to decline in Kalamazoo County by at least 1% from the current school year to next school year.

It IS true that the reduction in state funding, after adjusting for inflation, does not follow as bad a trend from 2004-05 to 2008-09, as it did from 2002-03 to 2004-05. During the two year period from 2002-03 to 2004-05, the state of Michigan did not increase the per pupil foundation grant at all. Over that two year period, prices increased by 5.3%. Therefore, the schools were losing over 2.5% per year to inflation from 2002-03 to 2004-05. On the other hand, from 2004-05 to 2008-09, it appears that school districts will be roughly losing 1% per year to inflation. Things are still getting worse with state funding for K-12 education, but not as fast.

 But this improvement from "very bad trends" to "moderately bad trends" in school funding does not provide students with a higher level of inflation-adjusted real funding per student, to better meet student needs. Let’s put it this way. In 2005, when the enhancement millage was first enacted, the real funding per pupil from the state for the 2004-05 school year was 5.3% below what it had been in 2002-03. The enhancement millage provides about 4 and one-half percent of the school foundation grant, so it made up for most but not all of that funding shortfall, and brought schools back up to close to what they were getting in 2002-03, after adjusting for inflation. So, the enhancement millage initially enabled local schools to buy about the same levels of real services for students that they could buy in 2002-03.

Recent state funding increases that have still lagged inflation mean that in 2008-09, real funding per pupil from the state will have deteriorated further to over 8% below its level in 2002-03 for 8 of the school districts in Kalamazoo County, and by over 9% for KPS. The renewal of the enhancement millage makes up only half of this “real funding gap” from the real funding level in 2002-03. Therefore, even if the enhancement millage passes, local schools will still be less able than they were in 2002-03 to provide services to students. If the enhancement millage fails, real services per student will have to be cut. 

Why do we need to worry about inflation when looking at school budgets? Because it affects the level of real services that schools can provide to students. For example, when the cost of diesel fuel goes up, school costs go up. Schools are forced to make some sort of budget cuts to adjust to these rising costs.  

This brings us back to the central case for the renewal of the enhancement millage. Funding per student from the state has become increasingly inadequate to meet student needs, during the time period before the 2005 enhancement millage, and during the time period since then. As a result, if the enhancement millage fails, although local taxpayers will save modestly on their taxes, there will be significant budget cuts in local schools that will damage the quality of educational services to students. That is the choice facing voters.

Note for policy data wonks on inflation calculations: the inflation calculations used here rely on official data from the Bureau of Labor Statistics on the Consumer Price Index for all Urban Consumers. This is the most commonly used consumer price index. To look at these data yourself, go to http://www.bls.gov/cpi/home.htm , click under “Most Requested Statistics” on “All Urban Consumers (current series)”, and then choose to display data for “U.S., All Items (1982-84=100)”. To adjust for inflation, we created a price index for each school year by combining the second half of one year’s price index with the first half of the next year, that is the price index for the 2006-07 school year would be the average of the price index for the second half of the 2006 calendar year and the price index for the first half of the 2007 calendar year. Of course, we don’t have data yet for the first half of the 2008 calendar year and beyond. To project price data forward,  we assume prices will increase by 3.1% per year, which is the price increase from the second half of 2006 to the second half of 2007. This seems to be a conservative prediction.

We could of course endlessly debate the accuracy of the Consumer Price Index. Does it adequately control for quality change? (Short answer: sometimes Yes, sometimes No.) Are price trends in Kalamazoo different from those in the U.S.? (Short answer: we don’t know). What if instead of using the CPI, we used a price index for what schools buy? (Short answer: probably prices on inputs purchased by schools have gone up faster, as schools are heavy buyers of health care.) But these details are unlikely to change the main point. Since the enhancement millage passed in 2005, the state has not come close to making up the damage that the 3-year foundation grant freeze from 2002-03 to 2004-05 did to real funding per student. Therefore, a local enhancement millage is still needed.