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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:



New CRC Report Sets Record Straight on Recent K-12 Funding History

October 16, 2014 Education funding has taken a front row seat in the current political debate. Claims and counter-claims about changes in state funding for K-12 education abound. As a result, citizens are left scratching their heads about what to believe.

To help clear up some of the confusion, the Citizens Research Council of Michigan (CRC) is releasing a new report on the topic, Making Sense of K-12 Funding. The report explores the recent history of K-12 funding, discusses the important factors affecting the amount of money that school districts receive, and analyzes how much money is available to deliver classroom instruction.

"After listening to the back-and-forth on the issue, we decided it was time to set the record straight," said Craig Thiel of CRC. "While the raw numbers show an absolute increase in state funding in recent years, this fact alone does not paint a complete picture of public school finances -- the actual situation is much more nuanced," added Thiel.

CRC's new report answers three fundamental questions:

1) "Is school funding up or down compared to four years ago?"

Here the answer is an unequivocal 'up'. While total state funding is up over $1 billion from FY2011 to FY2015, the increase is almost exclusively earmarked to satisfy school employee retirement costs, specifically legacy costs arising from the financial market downturn and state retirement system reforms.

2) "Has education funding gone up as much as it could have?"

Here the answer is 'no'. State tax policy and budget decisions effectively stretched the School Aid Fund, leaving fewer dollars available for distribution to K-12 schools. The personal income tax and business tax reforms of 2012 substantially reduced the amount of state tax revenue deposited in the School Aid Fund. Also, lawmakers decided to fund certain state higher education appropriations from the School Aid Fund. Combined, these decisions have effectively reduced the amount of state resources schools receive.

3) "Are individual school districts better off today than they were four years ago?"

An answer to this question is far less definitive. While the amount of per-pupil funding is up, districts are paying higher retirement bills. This leaves fewer resources for other school expenses. Also, total funding at the district level is greatly influenced by the number of students enrolled. Because declining enrollment is a pervasive issue across the state, the vast majority of traditional public school districts must manage with less non-retirement funding.

CRC's report is available at no cost Here.



CRC Releases Analysis of Proposals 14-1 and 14-2

September 18, 2014, The Citizens Research Council of Michigan (CRC) has released an analysis of the two statewide questions appearing on the November ballot. This analysis continues a long history of CRC providing relevant, unbiased information about statewide ballot questions to help voters make informed decisions.

Two years ago, at the November 2012 general election, voters were asked to decide on six ballot proposals - five constitutional amendments and one referendum. The proposals dealt with six different topics, and each one was rejected by the voters. At the November 4, 2014, general election, voters will be asked to consider two ballot proposals dealing with the same subject – wolf hunting. While a yes vote on either or both Proposal 14-1 and Proposal 14-2 would permit a wolf hunt during the 2014 season, the Natural Resources Commission, which would gain the authority to establish such a hunt, has indicated that regardless of the statewide vote in November that it would not schedule a hunt this year.

Proposal 14-1 is a referendum on Public Act (PA) 520 of 2012. PA 520 names wolves as a game species and allows the Natural Resources Commission (NRC) to establish annual wolf hunting seasons. This act led to the first wolf hunt in Michigan in 50 years in 2013, which resulted in 22 wolves killed.

Proposal 14-2 is a referendum on PA 21 of 2013. PA 21 was enacted in response to the referendum on PA 520; the referendum temporarily suspended wolf hunting in Michigan. PA 21 authorizes the NRC and the legislature to designate a species as game, allowing a wolf hunt to proceed.

Regardless of the vote outcomes on the two referenda, the NRC, which would gain authority to establish a wolf hunting season under each proposal if passed, has indicated that there will not be sufficient time following the November election to schedule a hunt this season. It has stated publicly that there will be no wolf hunt during the 2014 season. The NRC's decision effectively renders moot, the two referenda votes as they pertain to wolf hunting this season.

These referenda will not affect wolf hunting beyond 2014 because a separate citizen-led initiative, the Scientific Fish and Wildlife Conservation Act (SFWCA) was enacted on August 27, 2014. The SFWCA, which takes effect 90 days after the adjournment of this legislative session, reaffirms the powers of the NRC listed above and clears the way for future wolf hunts starting with the 2015 season. The SFWCA contains an appropriation and therefore cannot be subject to a future referendum vote per a constitutional provision.

CRC's full report describing the 2013 wolf hunt, the history behind the two ballot proposals, the citizen-led SFWCA, and the NRC's recent actions to forego a 2014 wolf hunt is available at no cost here.



Citizens Research Council of Michigan appoints Eric Lupher as president

September 15, 2014, Eric Lupher, who has served the Citizens Research Council of Michigan (CRC) in various capacities for more than 27 years, has been appointed president of the non-partisan public affairs research organization.

Lupher has expertise in government organization, operations and finance, serving most recently as CRC's research director. He has prepared all CRC research for final publication, maintained CRC's nationally recognized website and provided oral presentations and worked with the media and government officials to disseminate CRC policy recommendations.

"Eric's experience in governmental research and behind the scenes at CRC make him the perfect candidate to lead CRC into its next century," said Terry Donnelly, new chair of the CRC Board of Directors, in announcing Lupher's appointment September 12 at the group's 98th annual meeting, held at the Detroit Athletic Club. "His leadership will help ensure that the CRC continues to remain influential in the development of state and local public policy in Michigan."

Lupher just completed a two-year term as president of the Governmental Research Association (GRA), a 100-year-old association of government research professionals. He also represented GRA for six years on the Governmental Accounting Standards Advisory Council, whose members are drawn from throughout the nation to advise the Governmental Accounting Standards Board (GASB) in the development of standards for public sector financial reporting.

Donnelly, a member of the Dickenson Wright law firm who has served on the CRC board since 2001, was elected chair of the board for a two-year term. He serves as bond counsel to a number of public institutions in Southeast Michigan and around the state.

The keynote speaker at the annual meeting was noted urban policy expert and Detroit historian Thomas Sugrue, a professor of history and sociology at the University of Pennsylvania and director of the Penn Social Science and Policy Forum. Sugrue drew on his decades of research on urban policy to provide insights on the promise and pitfalls of strategies to remake Michigan cities.



CRC Report Examines Obesity Costs, Drivers, and Policy Solutions

August 14, 2014, As a state, Michigan has a weight problem. With almost a third of its adult population classified as obese, Michigan has one of the highest average rates of obesity in the country. In a new report, Addressing Michigan's Obesity Problem, Citizens Research Council of Michigan explores why high obesity rates are a problem, the potential causes driving high rates in Michigan, and the most effective solutions at the school, local, and state levels.

In addition to increased health risks, obesity results in significant economic costs for each and every Michigan resident, regardless of their weight status. Individuals, businesses, and governments incur costs from obesity through direct medical expenditures, the state's Medicaid program, reduced employee productivity, increased employee absenteeism, higher disability and other employer insurance costs, and a decline of the state's human capital through higher dropout rates and lower academic achievement in obese students. These factors decrease individuals' quality of life, make-up ten percent of Michigan's health costs, and diminish the competitiveness and economic viability of Michigan businesses.

View CRC's recorded webinar to learn more about CRC's obesity research.

The factors in our environment, which are magnifying the problem, are many and varied and include risk factors such as low nutrition foods in schools and neighborhoods, inadequate amounts of physical activity, insufficient health and physical education in schools, lack of community-focused programs to address obesity, a disconnect between the costs of obesity and who incurs those costs, insufficient coverage of treatment options by health insurers, and many more.

CRC's report identifies roughly a dozen ways that school, local government, and state leaders and policymakers can effectively impact obesity rates in the state. These solutions include:

  • Strengthening the nutritional profile of all foods served on school property and in child care settings;
  • Requiring physical activity during the school day and in child care settings and expand opportunities for activity before and after school hours;
  • Including detailed physical and health education requirements for all grade levels, K-12;
  • Increasing state public health spending;
  • Taxing unhealthy foods and beverages and providing subsidies to make healthy foods more accessible to low-income families;
  • Pursuing local government planning consistent with active lifestyles; and
  • Expanding community programs targeting obesity prevention and reduction.

The full report is available at no cost here.

Appendix A was updated on August 20 to correct a spreadsheet error. Access the revised Appendix A.



School District Fiscal Health Improves in 2013

June 16, 2014 - Between fiscal year 2012 (FY2012) and FY2013, 85 percent of all traditional public school districts in Michigan saw their fiscal health improve or remain steady according to a new report from the Citizens Research Council of Michigan (CRC), School District Fiscal Health Improves, But Some Long-Term Challenges Remain. This is a marked improvement from FY2012, when over 70 percent of traditional districts experienced increased fiscal stress and a decline in their health. The report also notes that the number of severely stressed districts (deficit districts) has hovered around 50 over the past three years, contrary to earlier warnings from state officials that the number of deficit districts could grow to 100.

CRC's new report finds that, overall, the fiscal health of Michigan school districts is a mixed bag and that the good news is tempered by some bad news, especially as it relates to the most fiscally-challenged districts in the state. This was confirmed recently by State Superintendent of Public Instruction Mike Flanagan's quarterly update to lawmakers. While the vast majority of deficit districts are expected to reduce or eliminate their problems by the end of the year, nine districts are projected to see their deficits increase.

"The recent increases in per-pupil funding provided by the state combined with the prospect for additional per-pupil bumps the next two years, conditions are ripe for continued improvement," said Senior Research Associate Craig Thiel. "The prospect of better financial health, however, will be tempered for many districts by the headwinds created by pension obligations and declining student enrollments."

In addition to examining recent trends in state funding, student enrollment changes, and retirement system reforms, the CRC report analyzes school financial data compiled and reported by Munetrix, a private firm specializing in public sector financial management reporting. The report reveals that, over the past five-year period, about one-half of all traditional public school districts saw their fiscal health erode while the other health saw their health improve or remain constant.

The report is available at no cost HERE.



CRC Updates the Outline of the Michigan Tax System

April 15, 2014, Today is April 15... tax day. Across the state, Michigan citizens are working to file their annual tax returns, but how can those same citizens learn more about the taxes they pay and how those taxes are used? To this end, the Citizens Research Council of Michigan (CRC) has updated its most popular report, the Outline of the Michigan Tax System. This report, which serves as a handy resource for many, provides a concise and accessible summary of Michigan taxes and captures all of the changes made to the state and local tax landscape since the last update in March 2012.

In the last year, state policymakers enacted legislation to phase-out most of the personal property tax (PPT) paid by Michigan businesses on commercial and industrial personal property and altered elements of the state tax structure to reimburse local governments for the revenue they stand to lose. Another major change established a "sales tax on the difference" mechanism with regard to automobile and watercraft trade-ins. The new law requires that sales tax be imposed only on the difference between the purchase price and the trade-in price, rather than the entire purchase price as under previous law.

"With the new taxes authorized to ensure reimbursement to local governments for lost personal property tax revenues, Michigan now has 59 taxes that the state (38) and local (21) governments are authorized to levy," reports Bob Schneider, CRC's Director of State Affairs.

For each tax contained in the Tax Outline, you can find information on its legal authority, rate, base, administration, and the amount of revenue it raises. The Tax Outline also contains helpful links to official sources, which may contain more details than are available in CRC's summary outline.

In addition to tracking the details of each tax's rate and base, the Tax Outline tracks tax revenues from year to year. It is of note that the four years summarized in the Tax Outline show all local government tax revenues declining by a total of $1.1 billion. Over that same period, all state tax revenues increased by a total of $1.2 billion. Several individual types of taxes show the effects of the decline in property values caused by the foreclosure crisis, with total general property tax revenues down 9.3% since 2007 and the state education tax down 12% over this period.


CRC Report Examines Michigan's Policy of Providing State Support to Nonpublic School Students

Michigan's recent winter storms shed light on some of the unique relationships that can exist between a local public K-12 school district and the private and religious (nonpublic) schools located with the district's boundaries. The storms and frigid temperatures caused districts to cancel classes for a number of days, and many nonpublic schools were forced to follow suit. For some nonpublic schools, the decision to close was related to the fact that the public school district, which canceled classes, delivers educational services to, and provides transportation for, the nonpublic schools’ students.

Michigan law forbids direct public support of nonpublic schools; however, it allows state support of nonpublic school students enrolled in public schools. Students attending nonpublic elementary and secondary schools have long been able to enroll part time in public schools (both traditional public and charter schools) and receive instruction in non-core curriculum offerings. Student instruction in elective courses such as physical education, art, technology, and foreign languages is financed by the state dollars that public school districts receive through the per-pupil foundation grant that has been in place since adoption of Proposal A in 1994. The Michigan Supreme Court has ruled that such arrangements do not violate the state constitutional prohibition against "parochiaid" -- direct state support of nonpublic schools. CRC’s new report, State Support of Nonpublic School Students, examines the history of Michigan’s policy behind "shared time" instruction, how it differs from "parochiaid," and participation in the program.

"It is easy, upon hearing about ’shared time’ instruction, to conflate the issue with ’parochiaid,’" said Craig Thiel of CRC. "The two are different in form and very different from a legal perspective."

CRC's new report documents the observed growth in participation and possible reasons for such growth, including the financial incentives created by the per-pupil foundation grant. The report highlights how "shared time" enrollment affects state School Aid Fund finances, as well as the finances of individual districts. Some districts have increased their participation as a way to supplement traditional revenue streams and help them manage through difficult financial times. The report also discusses public policy issues raised by the mechanics of "shared time," particularly the per-pupil funding that accompanies nonpublic school student enrollment in public schools.

"Participation in ’shared time’ is at an all-time high with the state paying an estimated $57 million in fiscal year 2013 to educate nonpublic school students," said Craig Thiel. "Enrollment in ’shared time’ instruction continues to grow, even though statewide public school enrollment has been declining for years. This is a trend worth taking notice of."

CRC's report is available at no cost on the Citizens Research Council's website and can be accessed here.



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Making Sense of K-12 Funding

Recent Publications

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

Reform of Michigan's Ballot Question Process

School District Dissolutions: Another Approach to Address Local School District Fiscal Distress

Medical Costs of No-fault Automobile Insurance

Michigan's Single-State Recession and Its Effects on Public Employment

Consolidation Issues Associated with the Proposed Merger of the City of the Village of Douglas and the City of Saugatuck

School Aid Budget: Will FY2014 Increases Be Sustainable in FY2015?







Last Updated October 16, 2014

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