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CRC Column

The right to criticize government is also an obligation to know what you are talking about. 
-Lent Upson, 1st Executive Director of CRC  


For over 90 years, the objective of the Citizens Research Council of Michigan has been to provide factual, unbiased independent information on significant issues concerning state and local government organization and finance. CRC believes that the use of this information by policymakers will lead to sound, rational public policy in Michigan.

 

CRC's Blog

Check out the latest posts on the Citizens Research Council of Michigan blog, CRC Column:

 

 

 

IN THE NEWS

CRC Report Lays Path for Reforming Statutory State Revenue Sharing

February 18, 2015, Introduction of the Governor's budget proposal last week once again draws attention to a long-standing program of distributing state funding to local governments. Michigan's state revenue sharing program has provided a decreasing amount of assistance to lcoal governments over the last decade. Not only does the law fail to provide a method to distribute funds, but policymakers have been diverting funding from state revenue sharing to balance the state's budget. A new Citizens Research Council of Michigan report, Reforming Statutory State Revenue Sharing, describes the role of the revenue sharing program and provides alternatives that would provide a better foundation for the future distribution of revenue sharing dollars.

"If the fiscal health of Michigan's local governments is a priority, state policymakers should find a way to fund statutory state revenue sharing," said CRC president Eric Lupher. "The state is only as strong as its weakest local governments. For that reason, it is a smart investment to fund those units that provide the services that keep Michigan's residents safe and that host the economic activity upon which state taxes are levied."

The report, prepared at the request of the House Appropriations Subcommittee on General Government, provides different paths that state policymakers could take for distributing revenues.

One path attempts to equalize the fiscal capacity of local governments by distributing state funds based on differences in their tax bases and by recognizing the varying demand for local services.

A second path suggests that the state identify the different sectors of the economy that require the greatest levels of local government services and prioritize assistance to local governments that host economic activities within those sectors.

A third alternative would transition the program from an unrestricted revenue sharing program, that allows local governments to decide how to use the funding, to a restricted revenue sharing program that funds the local government services for which the state has the greatest interest, namely public safety.

"The funding cuts since 2001 have cut about two-thirds of the local governments out of the statutory state revenue sharing program," Mr. Lupher added. "While unfortunate for those local units that have foregone the revenues, the circumstances provide an opportunity to minimize the 'winners' and 'losers' while rebuilding the program."

The full report, funded through a grant from the W.K. Kellogg Foundation, is available at no cost on the Citizens Research Council of Michigan website at www.crcmich.org.

 

 

IN THE NEWS

New CRC Report Examines Policy Options to Address Challenges Posed by Declining Student Enrollment

January 15, 2015 - State policymakers have altered school funding and governance policy to fit the circumstances of the day. In a new report, Managing School District Finances in an Era of Declining Enrollment, the Citizens Research Council of Michigan suggests that policymakers once again need to alter state policies because of statewide declining student enrollment. The new report examines the causes, challenges, and possible state policy responses to declining student enrollment.

Michigan funds public school districts, in part, based on the number of students enrolled. Statewide, public school enrollment has declined by more than 11 percent over the past decade. This trend, combined with many new entrants to the public education market in Michigan, has contributed to student enrollment declines for over two-thirds of all public school districts.

"To their credit, many school officials have attempted to proactively respond to changing student enrollments," reports CRC's Senior Research Associate Craig Thiel, "but the economics of school finance suggest that state policy reforms could assist them to better manage school finances during an era of declining enrollment."

In recent years, state-level policymakers have shown considerable interest in revisiting Michigan's primary school funding mechanism. The Governor, the State Board of Education, and various factions of the Legislature have examined and weighed in with finance reform ideas. As the new Legislature gets seated and begins to contemplate the school finance issues it wishes to tackle, CRC offers the following considerations for state policy reforms to help school districts manage through the current era of declining enrollment:

First, moderate to significant enrollment decline is a clear sign of existing, or rapidly developing, fiscal stress. School officials and the state must heed this signal. It should be used as an early warning to districts and the state that a district is in trouble, prompting them to take action and provide additional assistance (i.e., technical, managerial, financial) to mitigate the effects of financial problems, including the potential disruption of student learning.

Second, the state should consider revisiting the blended student count formulas used during the past. Current formulas do not take into account previous years' student counts, but only the current year. By giving greater weight to previous years' student counts, districts are able to make a more gradual spending transitions to accommodate new revenue levels.

Finally, and perhaps most importantly, a fundamental disconnect exists between the state's per-pupil foundation grant and the nature of school cost pressures (i.e., heavy fixed costs in short run). Policymakers should consider modifying the per-pupil foundation grant so that the marginal revenue that a district losses or receives because of a change in student enrollment is equal to the change in marginal costs, either up or down. This would require breaking up the grant to reflect the relevant fixed and variable costs in education.

CRC's report is available at no cost Here.

 

IN THE NEWS

CRC coauthors report that examines policy options to support children from birth to age three

November 17, 2014, A new report released by the Citizens Research Council of Michigan (CRC) and Public Sector Consultants (PSC) suggests that state policymakers can make targeted investments in evidence-based programs to help ensure Michigan's youngest children are ready to succeed when they reach kindergarten. The jointly authored report, titled "Policy Options to Support Children From Birth to Age Three," analyzed current research on early childhood programs with the goal of identifying those most likely to produce the best outcomes for Michigan's children and for the state as a whole.

Extensive research has demonstrated that the period from birth to age three is critical to a child's development. Depending on circumstances, children can begin with a great start, or they can begin to fall behind. Research demonstrates that early intervention is far more effective at improving outcomes for children than later remediation.

The report identifies four promising areas for investment:

  • Home visiting programs - These are voluntary programs that link parents with trained service providers (e.g., nurses, social workers) who coach families on how to best support their child, address the challenges they face, and teach ways to improve the home environment for children.
  • Access to medical homes - Children with access to medical homes have an ongoing relationship with a personal primary care physician, where the physician and other providers consider the needs of the child, provide enhanced access, and coordinate or integrate specialty care as needed.
  • High-quality child care - A growing body of research illustrates the link between high-quality child care and long-term outcomes for children. Positive child care environments promote children's progress in both academic and social skills.
  • Preschool for three-year-olds - The expansion of the Great Start Readiness Program has made preschool widely available to at-risk four-year-olds. Publicly supported preschool opportunities for three-year-olds, however, are far more limited. Some studies have found that adding a second year of preschool can lead to larger and more persistent learning gains than one year of preschool.

CRC's report is available at no cost, here.

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Recent Publications

Reforming Statutory State Revenue Sharing

Managing School District Finances in an Era of Declining Enrollment

Policy Options to Support Children From Birth to Age Three

Making Sense of K-12 Funding

Statewide Ballot Issues: Proposals 2014-1 & 2014-2   Wolf Hunting

Addressing Michigan's Obesity Problem

Statewide Ballot Issues: Proposal 2014-1
Voter Approval of a New Statewide Local Tax to Reimburse Local Governments for Personal Property Tax Reforms

School District Fiscal Health Improves, but Some Long-term Challenges Remain

2014 Update of the Outline of the Michigan Tax System

State Support of Nonpublic School Students

 

 

 

 

 

 

 

 

Last Updated February 18, 2015