Engler's Angle

How tax relief became school reform in Michigan

Derek Green from the August/September 1994 issue

(Page 3 of 4)

State Treasurer Doug Roberts says Engler emphasized those two points when formulating the plan. "We had a vast amount of money to recoup," he says. "But that was just one part. The governor kept saying that wasn't enough. He stressed that we had an opportunity to fundamentally change the system. He said over and over that he wanted something that would change itself over time."

Engler's original goals for school reform were even more far-reaching than the plan finally enacted. They included the charter school provision; inter-district public-school choice, with funding following each student; new discipline measures and report-card procedures; multi-tiered school-accreditation procedures; the development of a core curriculum in math, reading, and science; and the implementation of a fast-track teacher certification program.

The governor himself describes his strategy with a typical lack of animation. "When we put [everything] on the table, it brought everybody into the room," says Engler. "We swept the slate clear so no one was in a position to defend the status quo, because there was no status quo. It was gone."

No status quo also meant nowhere left to run. So in August, Engler created a task force to draft a legislative proposal that had to rewrite the Michigan tax code, create a system for the state-wide allocation of school funds, and improve the fundamental quality of public education. The governor also set a tight deadline for this proposal: October 1.

In retrospect, says Deputy Treasurer Khouri, drafting a plan in two months was the easy part. Passing the bills was infinitely more difficult, taking until the very end of 1993. Time was of the essence, however, because of the legislature's "immediate-effect law." That law specifies that any spending bill not passed by the end of a year must get a two-thirds vote to be put into effect. The supermajority requirement would have meant a small minority could control any revenue-replacement legislation that went into overtime. Neither Engler nor legislators relished the prospect of raising taxes or repealing their own summer legislation to keep schools from becoming insolvent.

"They would have looked ridiculous," observes the Mackinac Center's Wittmann. "Election time was on everybody's mind. And it's always easier to get votes for a tax cut than for an increase. In the end, they were in the boiling pot together and no one wanted to get cooked."

In the history of Michigan, the state legislature had never met after December 15. But session for the school finance and reform bills began at 10 a.m. on December 23 and continued through the entire evening and next morning. When it finally ended shortly after noon on Christmas Eve, 22 new bipartisan bills had been drafted, debated, and passed.

"I'll never forget it," says Dick Posthumus, Senate majority leader and a close ally of Engler's. "It's probably the hardest work I've
ever done in my life. For about two weeks everyone had been getting by on three or four hours' sleep, and for the last two days we went something like 48 hours straight to work out the most complex issue we'd ever faced. It was difficult but very, very successful."

Deputy Treasurer Khouri agrees. "It was a long all-nighter," he says. "The culmination of a lot of long nights. But that's probably how it should be. We knew we were doing something historic. We didn't know whether history would think it was smart or dumb, but we knew it was history. That makes it worthwhile."

Some recall the evening less warmly. "In many ways it was a joke," says Democratic whip Lynn Rivers. "We had no staff, there was no analysis of the bills--people were voting in some cases on legislation they hadn't had time to read. After 26 hours, all people were talking about were their plane tickets home."

Rivers, who is running for Congress, believes that a last-minute vote should have been avoided. "The main reason it came to this," she says, "is because the governor understands that the tighter the time line, the more leverage he has. Unfortunately, good public policy might have been lost in the shuffle." Rivers worries that legislators did not have adequate time to fully read the legislation they passed, much less consider its long-term implications.

Engler signed the legislation that came out of the marathon session on the last day in December. The compromise that had been reached offered two different plans, both of which reinstated a small portion of the property taxes eliminated in the summer. The first plan, introduced by the Republicans, sought to increase the state sales tax from 4 percent to 6 percent. Under the Democratic-supported alternative, the state income tax would go from 4.6 percent to 6 percent. Although not as ambitious as Engler's original proposals, both bills included nearly identical school reform measures, such as charter schools and a standardized core curriculum for all publicly funded schools.

Since Michigan law requires a constitutional amendment to raise the sales tax, there was one final dramatic gesture to be made: a statewide vote to decide the matter. If voters turned down the Republican-backed sales-tax increase ("Proposal A" on the special ballot), the Democratic income-tax proposal, which was a statutory amendment, would automatically go into effect. In the words of one Michigan representative, the voters got to choose between being shot or being hanged.

Still, many observers credit Engler with perceiving that the only way to pass a piece of legislation this sweeping was to force voters to choose between a sales tax and an income tax. He believed all along they'd opt for the sales tax. "I felt that for 20 years, people in this state have proposed higher income taxes and higher property taxes," says Engler. "People always said they would consider trading [lower] property taxes for higher sales tax. I thought it was a good bet."

On March 15 this year, Michigan voters went to the polls to decide on Proposal A, which was essentially the Engler plan. It passed by a margin of nearly three to one. The new law raises the sales tax by 2 percentage points, increases the per-pack tax on cigarettes from 25 cents to 75 cents, and hikes the tax on international and interstate phone calls to 6 percent. It also implements a 0.75 percent tax on all real-estate transfers. While stopping short of actually abolishing property taxes, the plan reduces them by between 70 percent and 80 percent, enacts a property-tax assessment cap of 5 percent or inflation (whichever is less), and allows local communities to use a percentage of property-tax money for new school construction and building maintenance.

Comments

nfl jerseys|11.17.10 @ 3:24AM|#

cjmcjh

منتدى العرب|3.9.11 @ 9:14PM|#

Thank you

قبلة الوداع|8.12.11 @ 11:18PM|#

thank u man

منتديات العراق|8.15.11 @ 8:18PM|#

thanks

http://www.iraqn.com/
http://www.v9f.net/chat