Engler's Angle

How tax relief became school reform in Michigan

Derek Green from the August/September 1994 issue

(Page 4 of 4)

Just as important to the plan's authors, a number of school-quality reform measures also passed, including the legislation allowing charter schools, additional money for at-risk students, and an increase in the minimum number of school hours required of pupils from 900 hours a year to 1,080 hours. State Treasurer Doug Roberts says the reforms accomplish Engler's goal of setting a new course for education in Michigan because they give parents more options than the old system. "With something like charter schools," he says, "parents will have a choice."

Whether the reforms work out in the long run, the plan is a complete break with tradition in Michigan. Engler and many others believe that such a drastic change was the only way to effect change at all. The governor feels the schools had become too rigid and inflexible, too controlled by unions and the tyranny of the status quo, to cope with the educational needs of students and the instructional interests of parents. "The problem with education [reform]," says Engler, "has been that when you try to approach it piecemeal, to bring about incremental change, the inertia of the status quo is just so difficult to overcome that it really does wear you down."

But while Republicans and a number of Democrats are basking in their success, plenty of difficulties loom on the horizon. Chief among these is the problem of revenue shortfalls in the years to come. Opponents of the reform plan charge that the plan is seriously underfunded and that within the next few years legislators will have to slash school funding, raid the general fund to keep schools open, and enact huge tax increases to make up lost revenue. The MEA claims that when the legislators approved the plan, they knew it was underfunded by $500 million dollars--a figure boosted to $1 billion because of concessions to various interest groups. Other detractors worry that relying on sales taxes, which drop significantly during economic downturns, fails to ensure a steady, predictable source of revenue.

Deputy Treasurer Khouri, whose newest job is to start implementing the plan he helped author, disputes the doomsday claims but admits that the new plan doesn't mean that schools will have ever-growing budgets. "Will there be tough decisions to make when we set spending levels in the future?" he says. "Will spending have to be brought in line with economic realities? Of course." Khouri believes that there will be steady revenue increases in years to come--though not on track with the booming increases of the 1980s.

While the fiscal soundness of Michigan's reform remains to be tested, it seems likely that the plan will serve as an inspiration for similar experiments in other states. More than 40 states are currently mired in lawsuits over inequities in public education, placing Michigan at the forefront of what promises to become a national trend toward massive school-funding reform. As Time notes, "The Michiganders' decision...has tremendous national resonance. It presented itself at a moment when property-tax funding of education had become a multistate catastrophe."

This is not to say Michigan will serve as a model. Although education analysts believe that a few facets of the state's plan--especially the charter-school provisions--will travel well, they are quick to note that Michigan's political and economic conditions were sui generis, making it unlikely that other states will implement the same quick, sweeping changes in education.

"There were a number of political convergences that make Michigan unique," says Chris Pipho, spokesperson for the Education Commission for the States in Denver. "The property taxes were very high but the sales taxes were low. The governor put his weight behind a radical idea to solve the problem. And some people would say the legislature put voters in a guillotine to decide [the issue]." Instead of telling states what they should do, says Pipho, the Michigan experience tells them that something can be done to reform education.

And even though Michigan's reforms have yet to prove themselves, opponents and proponents of the plan agree on at least two points. The first is that John Engler has demonstrated a powerful political acumen that may well propel him to national office. Although he denies that he's gunning for executive positions beyond the governorship of Michigan, Engler has been a conspicuous presence on the national circuit lately, appearing before the National Press Club and co-chairing the National Governors' Association Task Force on Welfare Reform. He is on virtually every handicapper's list of likely GOP presidential or vice-presidential candidates.

The other point that adversaries agree on is more specifically related to Michigan's recent legislative battle: Other states contemplating an educational overhaul face long, hard fights.

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