Granholm makes case for protecting education funding with sales tax on services

Gov. Jennifer Granholm says her budget proposal, released on Feb. 11, protects education spending.

The Macomb Daily reports:

The governor has proposed a restructuring of the tax code that lowers the sales tax rate from 6 to 5.5 percent, but expanding the levy to include an array of services as well as goods.

The governor’s plan also calls for teachers and state employees to pay more into their pension plans and absorb more of the costs of health care.

Adoption of her budget, Granholm said, would ensure adequate funding and no cuts for K-12 education in 2011.

“The base of the school aid fund continues to shrink,” Granholm said during the call. “That’s why we want to balance that out and spread it to services.”

Granholm warned that no action could leave schools facing 2011 with a per-pupil cut of $255 and another $160 per student if districts must pick up a larger portion of the tab for pensions. Those cuts — on top of several years worth of other cuts — already have forced school districts to trim their budgets.

Late last month, Granholm told the Grand Rapids Press editorial team that she would veto any budget which did not protect education spending. Granholm said she was prepared to shut the government down over education spending.

In response, State Rep. Alma Wheeler Smith told Michigan Messenger the governor’s veto threat was too “hollow.”

“I would have supported that threat from the governor in 2007, and I wanted her to shut government down in 2007. We had the dollars in our budget we could have operated a few more weeks on if we had gotten an extension,” Smith said. “But to shut government down now, when we have no reserves and we have people who are totally dependent on state support, in the Family Independence Program, in health care — just keeping food on the table — is the wrong thing to do.”

“When the governor fights for revenues first, and can’t get them and can prove to the citizens that she has made revenues for education a priority, then I will support whatever she wants to do,” Smith continued. “But threatening the legislature without putting forth the effort and the fight to generate the revenue we need to meet the needs of our citizens is just hollow.”

Democratic political consultant Joe DiSano tells Michigan Messenger the Granholm veto threat combined with Andy Dillon’s (D-Redford Township) cuts-only budget process — one which DiSano and Smith called failed — essentially assured a third government shut down.

“A third government shut down is far more likely with the governor finally showing some backbone,” DiSano said. “I think (the veto threat) is really because she’s desperate for a legacy. She wants education to be her legacy.”

It should be noted that Granholm signed budgets last October which did cut education per pupil allowance, as well as eliminate 20J funding for some the state’s schools. That in turn, may have cost the state in Race to the Top funding from the federal government.

In November, Michigan Messenger reported that Sec. Arne Duncan told a conference call of reporters that states that had cut education would have a difficult time coming out on top in the Race to the Top funding battle.