STATE OF OPPORTUNITY. Can Kids in Michigan Get Ahead?
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This special reporting project wrapped up in May 2017. Read more.

The day Michigan killed public schools (and then created the system we have today)


If you’re like me and you know just a little bit about the history of education in Michigan, you might already know that a lot of what we see in our schools can be traced back to reforms made in the 1990s under then-governor John Engler.

But what you may not know is that these education policies can actually be traced to events that happened in a single 24-hour period in the summer of 1993.

The story of how it happened is an example of how change – even momentous, tectonic change that affects the lives of hundreds of thousands of people – can seem totally impossible right up until the moment it becomes inevitable.

I came across the history of that important day while reading a doctoral thesis by James Goenner. He’s currently with the National Charter School Institute. His thesis for Michigan State University (which is available online) traces the history of charter schools in Michigan. Our state was one of the early leaders in developing charter schools (Minnesota was the first state to authorize charters). But charters were just one of the educational reforms we can trace back to that day in 1993.

Prior to Proposal A's passage in 1994, Michigan's richest school districts spent about three times as much per pupil as Michigan's poorest, according to James Goenner.

For his thesis, Goenner interviewed about a dozen people involved in creating Michigan’s charter school law, many of them allies of Engler. If you’re looking for a critique of the charters, Goenner's thesis isn’t the place to find it. If you’re interested in history, though, Goenner’s account is essential.

Prior to 1993, Michigan had a major problem with how it financed public schools. Funding came primarily through local property taxes. That meant places with high-value property could spend a lot on schools. Those without it could not. The richest school districts, in places like Bloomfield Hills, spent about three times as much per pupil as the poorest districts.

Doug Roberts, who served as Engler’s state treasurer from 1991-1998, told Goenner everyone knew Michigan’s system for funding schools was unfair. But no one seemed to be able to figure out how to fix it, even though the solutions were apparent.

“Two very easy solutions,” Roberts told Goenner. “One solution is, you raise a lot of taxes, and you raise the bottom. We don’t have the votes for that. The other solution is, you take the high-spending districts, and you cut them down. We don’t have the votes for that. So we stared at each other for 20 years.”

All of this came to a head in the tiny town of Kalkaska in the spring of 1993.

Local school leaders said they needed more money to operate. Voters turned them down. Facing a deficit, district officials decided to shut down completely, rather than try to slash individual programs. They ended the school year two months early, leaving kids and parents in Kalkaska stranded. It was a crisis that received national attention.

By that summer, Engler, his allies and his opponents still hadn’t come up with a solution that would save Michigan’s schools from the kinds of problems that brought down Kalkaska.

After a more balanced plan was turned down by the state’s voters in June, Engler proposed a dramatic step. He asked the Legislature to approve a 20% cut in the state’s property taxes without offering any way to recoup the lost revenue.

Then came the big day when everything changed.

It was July 19, 1993. Legislators were debating Engler’s proposed 20% property tax cut. Democrats opposed it. But one Democrat saw opportunity. Then state Sen. Debbie Stabenow, who had already declared her intention to run for governor, offered an amendment to Engler’s proposal. Rather than a 20% cut in property taxes, Stabenow proposed a 100% cut.

For an account of what happened next, we’ll switch from Goenner’s thesis to a paper published  by two University of Michigan researchers in the Journal of Policy Analysis and Management in 1997. In this paper, Paul N. Courant and Susanna Loeb wrote:

At the time, Stabenow’s move was widely interpreted as an attempt on her part to show how silly it was to cut taxes without specifying new revenues for the schools. If that was its purpose, it backfired. The Senate passed the amended bill the same day, the House followed a day later, and the governor immediately announced that he would sign the bill. With little debate the state had eliminated $6.5 billion in school taxes for the 1994-1995 school year. Absent further action, there would be no way to finance the public schools.

In other words, in the span of one day, Michigan leaders had decided to completely defund public schools.

The entire situation was a manufactured crisis, but without it, we wouldn’t have the education system we have today.

After signing the property tax elimination into law, Engler was quoted in the New York Times:

“During the next 100 days or so, we will have a window of opportunity that only comes once in a generation … All the nation is looking to us.”

When voters finally approved Proposal A in 1994, the New York Times called it "the nation's most dramatic shift in a century in the way public schools are financed."

Goenner’s thesis and the Courant-Loeb paper cover what happened next: Engler’s team scrambled to replace the lost school revenue with a new proposal to voters, they used the crisis to create school choice in Michigan and lay the groundwork for Michigan’s charter school law. Many of the reforms came down to an act of the state Legislature. Both Republicans and Democrats worked together to create school choice in Michigan – that issue was not put to voters. The question to voters was how to pay for it. Proposal A increased the state sales tax and tobacco tax to help pay for schools. It also put a cap on how much money local governments could raise to spend on schools.

No longer would Michigan’s schools be funded solely based on how much local governments could afford. The new system was more centralized, but also more fair.

When voters finally approved Proposal A in 1994, the New York Times called it “the nation’s most dramatic shift in a century in the way public schools are financed.”

To be sure, these reforms did not solve Michigan’s education problems. It’s been more than 20 years since Proposal A passed, and Michigan still lags many states in educational outcomes. And there can still be great funding disparities between districts, as my colleague Jennifer Guerra compellingly reported last year in her radio documentary, “The Education Gap.”   

The truth is, Michigan’s educational system still faces many problems, some of which were arguably created by the reforms that passed in the 1990s.

But that doesn’t mean solutions aren’t out there. It doesn’t mean things can’t change.

Lots could change. It can happen in a day. 

Dustin Dwyer is a reporter on the State of Opportunity project, based in Grand Rapids. Previously, he worked as an online journalist for Changing Gears, as a freelance reporter and as Michigan Radio's West Michigan Reporter. Before he joined Michigan Radio, Dustin interned at NPR's Talk of the Nation, wrote freelance stories for The Jackson Citizen-Patriot and completed a Reporting & Writing Fellowship at the Poynter Institute.
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