Granholm vetoes extra funds for dozens of school districts

Mark Hornbeck / Detroit News Lansing Bureau

Lansing -- Gov. Jennifer Granholm signed a public school aid bill late Monday that spells double trouble for some local districts -- a cut of $165 per student and elimination of money designed to protect them when property tax reform was passed.

The governor vetoed $51.5 million for 51 eligible districts -- including some of the highest spending in the state -- that have received payments since Proposal A reform was approved 16 years ago. Proposal A aimed to eliminate property taxes as the source of funding for school districts and replaced it with basic foundation grants.

The largest cuts among the 26 districts from Metro Detroit will be felt by Dearborn and Livonia, being slashed $4.9 million each, Walled Lake, which would lose $4.7 million, and Warren Consolidated, by $3.7 million.

Of the 51 districts, the cut affects 39 that get more than $11,000 a year per student, almost $4,000 more than poorer districts. They'll now be more in line with the basic foundation grant unless lawmakers override her veto.

Northville Schools Superintendent Leonard Rezmierski called the news of the additional cuts under the Proposal A funding "disappointing" and pointed to the fact they came so late in the school term.

"This will be a horrific amount of reduction after we've started school," Rezmierski said of his 7,300-student district. He said he did not know what programs will be cut but that he will protect classrooms. "(The cuts) will be a significant issue we will have to look at (Tuesday) morning."

The Proposal A cuts represent about $2.2 million of Northville's $65 million annual budget for K-12.

For the Troy School District, the Proposal A and per-pupil cuts mean about $5 million in lost revenue, spokesman Tim McAvoy said. "To slash these funds when we are well into our fiscal year is unconscionable. It puts us (in) an extremely difficult position."

Every school district will see a cut of $165 per student, but even that reduced spending depends on an additional $100 million in revenue, which hasn't been passed by the full Legislature.

School districts were getting at least $7,316 for each student this academic year before the cuts were signed by Granholm.

In signing the budget bill, the governor noted that school aid has a deficit. "If this school aid bill were a check drawn on a bank, it would be returned for insufficient funds. To bring the budget into balance, I have vetoed $54 million in appropriations. But even these reductions will not fully resolve the shortfall," Granholm said.

"While my approval of this budget will allow public schools to keep operating and school districts to continue making scheduled bond payments, the Legislature has much more work to do to complete a balanced funding plan for our schools."

Granholm didn't leave much time. She signed off the evening before the October school aid payment is due.

Matt Marsden, a spokesman state Senate Majority Leader Mike Bishop, R-Rochester, said the funding gaps won't be filled.

"If the governor wants to veto parts of this budget, we will not refund them," he said. "There's no will or desire for tax increases to balance the budget, since we found a way to do so without tax increases."

The House and Senate have approved contrasting revenue bills. The Republican-controlled Senate passed legislation that calls for a one-year delay in a scheduled increase in a tax credit for low wage-earners and a reduction in a tax break for movie makers. But they're linked to a permanent business tax cut.

The Democrat-dominated House has passed bills that would place a 3 percent tax on doctors' gross receipts and halt an inflationary increase in the personal exemption from the state income tax.

To make matters worse, Treasury reports the state is taking in less sales tax revenue than projected, so collections for school aid will be $264 million short for the fiscal year. Granholm may have to order cuts later this fall that school officials say could amount to reductions of about $300 per student.

"Not only has the Legislature kept us in the dark for over a quarter of our fiscal year, now they have passed an underfunded budget," said David Martell, executive director of Michigan School Business Officials. "The House and Senate need to stop playing politics with Michigan's children."

The school bill also has:

• A 20 percent reduction for intermediate schools and other services to local districts. That's down from the 44 percent cut initially proposed, but it amounts to $16.3 million.

• An $8.9 million cut in early childhood programs. That cut mostly affects private preschool.

• A 10 percent, or $3 million, cut in vocational education and an 8.3 percent, or $2 million, cut in adult education.

• Elimination of $8 million for Granholm's small high schools program.

Detroit News Staff Writers Oralandar Brand-Williams and Mark Hicks and Associated Press contributed.