News Story

Analysis: Pseudo School 'Cuts'

Whenever faced with the possibility of lower revenue, Michigan's public school establishment perennially cries that it's already been "cut to the bone." Many people find the claim plausible given the state's "lost decade," so they may be surprised to discover how many school districts have consistently cut costs in recent years:


That's how many districts actually cut real per-pupil spending for each of the seven years between 2000 and 2008 (the latest data available), and represents about one half of 1 percent of all schools. Specifically, they are Breckenridge, Godwin Heights, Lamphere, Lincoln Consolidated and Wayne-Westland districts.

What's more, Michigan has been a "leader" by this measure: Those five districts comprise 71 percent of districts nationwide that can legitimately make the same claim (the national total is seven).

The figures were uncovered by Andrew Coulson of the Cato Institute's Center for Educational Freedom, who compiled and analyzed spending data from the nation's 14,000 school districts as produced by the National Center for Education Statistics. He was responding to this statement by U.S. Secretary of Education Arne Duncan: "The vast majority of districts around the country have literally been cutting for five, six, seven years in a row."

In addition to those five Michigan districts, only 32 (3.6 percent) in the state cut spending in each of the five years leading up through 2008, and 128 (14.5 percent) cut real spending over the last three years for which data are available. By and large, the data show that public schools here have increased inflation-adjusted per-pupil spending in spite of a statewide economic depression.

Schools that spend more while crying poor aren't necessarily trying to deceive the public. The problem Coulson points out is that "cuts" are usually defined by school boards and officials as spending less than previously anticipated. This creates a situation where districts can spend more each year, but still claim to be making cuts.

In addition, skyrocketing labor costs - nearly all of which are built into budgets by union contracts or state mandates - mean that districts may spend more overall each year, but still be forced to cut programs and staff. In Michigan, costs for school employee health insurance and state-mandated pension payments since 2000 have ballooned by 49 and 25 percent, respectively.

Those rising labor costs are the real budget problem in Michigan schools, not insufficient revenue. Injecting more cash only delays the inevitable need to reform what drives them - primarily the power of school employee unions both in Lansing and in local districts.


Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.