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Engler's Angle

How tax relief became school reform in Michigan

(Page 2 of 4)

Why would a Democratic senator introduce such a Republican-sounding proposal? Stabenow says she did it because someone had to "break the issue loose. We had incredible inequities in schools and we had the knowledge of how to fix the problem--but we didn't have the political will."

Stabenow believes it was "the lesser of two evils" to abolish all property taxes rather than to go along with the 20-percent cut proposed by Republicans, even though neither plan made provisions for replacing lost revenue. If the legislature completely dissolved the tax base, says Stabenow, they would have to admit the need for a complete overhaul of Michigan's out-of-control finance and education situation. To force the issue, the Democrats' plan set a deadline of the 1994-95 school year for implementing a new way of funding schools.

Others question Stabenow's motives and suggest that pre-election year posturing and political one-upmanship might have played their own large roles. "Maybe in her heart of hearts [Stabenow] thought abolishing property taxes, even given the risk of anarchy, was worth it to get the legislature moving," says the Mackinac Center's Wittmann with a smile. "In a sense, you can commend her. But is that what she was really doing?"

One reason the question nags people is the enigmatic, behind-the-scenes role played by the Michigan Education Association, Michigan's powerful branch of the national teachers' union. Few can imagine that Democratic lawmakers would propose such a radical piece of education legislation without first seeking the group's approval. In Stabe-now's own account, the MEA's chief Michigan lobbyist, Al Short, was kept apprised of developments on the night the Democratic leaders came up with their counter-proposal.

But Short denies that he supported any tax-cut plan that didn't provide back-up revenue for the schools. "In the Senate they took up the 20-percent [property tax] reduction with no replacements," he says. "Then Stabenow says maybe we should cut all taxes, also with no replacements. No one wanted replacements. I was caught off guard." The MEA's role is clouded further because of remarks Short made on July 20 to a Lansing news service that suggest he indeed approved of the plan. Short's waffling strengthens speculation that Stabenow's cloakroom strategy was a ploy to out-shine Republicans on the tax issue.

Julius Maddox, the MEA's charismatic president, forcefully rejects the suggestion that his organization signed off on Stabenow's plan. "I was not there that day," he says. "What I can tell you is that prior to that time, our position had been clearly articulated to the legislature. Our position did not change. If [state legislators] thought there had been a radical change in our position, it would seem to me that they would have checked with the president. This literally happened overnight."

For a few hours that night, it appeared that Stabenow's proposal had checkmated the Republicans. They could reject it and appear to have voted down a more comprehensive tax-cut measure than their own. Or they could support a Democratic initiative and run the risk of falling short of votes from their own party. Worse, if the proposal passed, the issue of replacement school funding--which most likely meant some very unpopular tax increases --would blow up in the Republican governor's lap.

But to everyone's surprise, Engler championed the offer. Meeting with Republican leaders, he developed a strategy in which Senate Republicans would support the bill in the Senate, and House leaders in both parties would expedite its passage in the lower house. If there
was any lingering confusion on the MEA's position, it disappeared as soon as Engler made it known that he would accept the Democratic plan. Early on the morning of July 20, a note personally signed by Julius Maddox appeared on every desk in the house, urging legislators to reject the plan. But by then it was too late to stop the proposal.

"It's a game I've seen all too often since I arrived in Lansing," says Rep. Lynn Rivers, who as party whip was one of only 35 House Democrats who resisted the plan. "It's the game of giving you what you want. It's like playing chicken on the highway. Except you don't play chicken with someone who's willing to crash and burn. John Engler is just that kind of politician."

The proposal opened the way for reform and provided wide tax relief--a big score for Republicans in general and John Engler in particular. But it presented them and their Democratic counterparts with another, more serious problem: No one had yet proposed, let alone conceived, a back-up funding plan for the schools. That meant that the state's lawmakers had less than a single school year to find the $6.2 billion they had just removed from the public-school revenue base.

"It would have been impossible for the Republicans to get something like this through alone," says the Mackinac Center's Wittmann, summing up the strange episode. "Everyone would have claimed they were nuts for not proposing some alternative way to finance schools. But when a Democratic senator proposed the legislation, then they were part of it too. They had all gone nuts."

Editorials across the state criticized the governor and the legislature for the unprecedented move, accusing them of enacting a cynical, politically expedient compromise that made hostages of the state's children. One political cartoon showed a portly John Engler falling from an airplane while frantically knitting himself a parachute. On September 1, The Washington Post criticized the Michigan plan in an editorial called "Honey, I Blew Up The Kids!"

In many ways, John Engler is the last governor you'd expect to be at the center of so much controversy and behind one of the most revolutionary pieces of state legislation in the country. A bland career politician (asked why he personally dedicated himself to education reform, he begins, "I've spent a lot of years in public service"), Engler doesn't exude the sort of charisma that inspires either blind loyalty in supporters or fear in opponents. In an age of MTV politics and jogging presidents, Engler's bulky frame and slight lisp cut the figure more of a 19th-century pol than a 21st-century policy wonk.

Detractors are quick to criticize Engler for what they see as a slash-and-burn approach to policy making. Provoking legislative crises is "a silly way to run government," says James Agee, a first-term Democrat in the state legislature. "Is that the way we ought to make our laws? Let's close the hospitals tomorrow, create a crisis, and then solve health care."

But the governor's supporters claim that beneath Engler's jejune exterior is one of the shrewdest political minds in the United States. By way of example, they point to his handling of the July property-tax showdown, a deft move in which he simultaneously neutralized his primary political rivals and created a windfall for himself and his party. Engler also understood that the legislative crisis gave him the chance to address not just how schools were funded but also how they might be remade.

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