News Story

School Employees Likely to Get Three-Quarters of $554 Million Service Tax Proposal

Only $8.8 million of a proposed $554 million in taxes earmarked to help Michigan schools would go to teaching and testing supplies and textbooks, according to a Mackinac Center for Public Policy analysis.

Meanwhile, $434 million — more than 78 percent — would go to school employee salaries and benefits, according to Michael Van Beek, the director of education policy at the Mackinac Center.

Van Beek based his analysis on spending patterns of Michigan schools released in 2008 spending data provided by the Center for Educational Progress and Information. He projected those spending patterns onto Gov. Jennifer Granholm's service tax proposal that would generate $554 million for schools.

Leon Drolet, director of the Michigan Taxpayers Alliance, said only a tiny percentage of the proposed taxes would be seen by the students in the form of upgraded materials in the classroom.

"In a way, it is like spending a ton of money to repaint a car whose engine doesn't run," Drolet said. "The money doesn't go to fix the engine. It's going to make the car look pretty. It's 'prop up the status quo' money, not 'fix the system' money. Taxpayers are getting a horrific return on their dollar."

Doug Pratt, director of communications for the Michigan Education Association, the state's largest public school employee union, didn't return two calls left at his office on Thursday.

Van Beek said his analysis showed how much of school spending is tied to labor costs.

According to a Mackinac Center analysis last year, Michigan teachers on average earned $57,000 a year. A teacher's family benefit plan cost schools $15,400 a year. The average teacher's pension is $30,000 a year.

But the most recent comparisons from the U.S. Census Bureau and the U.S. Department of Education show Michigan teacher salaries at 8 percent above the national average, while the state's per-capita personal income is 9.1 percent less than the national average.

"In order for schools to be more efficient, they have to deal with rising labor costs," Van Beek said. "Can we afford to pay these school employees the same benefits and salaries when the rest of the state is facing a very different economic climate?"

The breakdown for some of the spending items is as follows:

  • $296 million on salaries for school employees as well as consultants
  • $138 million for benefits
  • $12.4 million for energy supplies, including electricity, gas, oil and coal
  • $6.4 million for teaching and testing supplies
  • $2.4 million for textbooks
  • $2.1 million travel/workshops.