2014 Publications

Policy Options to Support Children From Birth to Age Three
Joint Report ( November 2014 ) 57 pages

A new report released by 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 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 research supporting early childhood investment is remarkable in its breadth and quality," says PSC Vice President Jeff Guilfoyle. "In addition to benefiting children, early childhood investments often pay substantial returns to taxpayers, and in fact, investment in research-based early childhood programs may be the single most effective economic development strategy that Michigan can pursue."

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.

"While there is research supporting all of these programs, the research is strongest for home visiting," says CRC Director of State Affairs Bob Schneider. "A number of research-based home visiting programs have been studied using random control trials that follow the children for decades. These studies show the benefits of home visiting programs lasting well into adulthood."

Making Sense of K-12 Funding
Memorandum 1130 ( October 2014 ) 7 pages

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, this 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.

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.

Statewide Ballot Issues: Proposals 2014-1 & 2014-2
Wolf Hunting
Memo 1129 ( September 2014 ) 8 pages

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.

Addressing Michigan's Obesity Problem
Report 387 ( August 2014 ) 64 pages

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. This report 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.

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.

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

Statewide Ballot Issues: Proposal 2014-1
Voter Approval of a New Statewide Local Tax to Reimburse Local Governments for Personal Property Tax Reforms
Memo 1128 ( July 2014 ) 10 pages

Proposal 1, the only statewide measure on the August 5 ballot, asks Michigan voters to approve the conversion of a portion of the state's current use tax to a new local tax as part of a plan to reimburse local governments for the cost of recently enacted exemptions of business property from the personal property tax. The Citizens Research Council of Michigan (CRC) has released its analysis of the ballot proposal to explain the ballot measure for voters.

The state Legislature and Governor enacted legislation in 2012 and 2014 that bring significant personal property tax (PPT) relief to Michigan businesses. Because the PPT is levied locally on the taxable value of business property, which includes everything from business equipment and machinery to chairs and computers, local governments stand to be most directly affected by these changes.

"Past efforts to exempt business personal property from the local property tax base eventually failed because the state was never able create a reimbursement method to keep local governments whole," said Bob Schneider, CRC's Director of State Affairs. "For some local units with a strong manufacturing base, the tax on personal property brings in a lot of local revenue."

To address this local impact, the legislation creates a mechanism to reimburse local governments for any lost PPT revenues. A key element of the plan is the conversion of a portion of the state's current use tax into a new local community stabilization share tax. The revenues of this new tax would be distributed to local governments to offset lost PPT revenues through a new special authority -- the Local Community Stabilization Authority (LCSA). The LCSA is considered a local unit of government in the legislation, but would look rather different than other local governments.

"The new authority is defined as a local government, but has statewide boundaries, so we essentially have a very unique statewide local unit of government set up to administer the reimbursement of other local units of government," said Schneider. "This peculiar arrangement really revolves around assuring local governments that they'll get their money. They don't want to see this money pass through the state government's appropriations process."

The conversion of a portion of the state's use tax to a new local tax, however, creates other constitutional issues. In 1978, voters added several sections to the Michigan Constitution (commonly referred to as the "Headlee Amendment") that limit the taxing authority of both the state and local governments. Calling the new tax a local tax means it has to be approved by voters, which explains the need for the ballot measure.

"Because the law creates a new local tax, that local tax needs to be approved by local voters," said Schneider. "And, in this case, because the 'local' tax is administered by a local authority that happens to have statewide boundaries, the usual local vote now becomes a statewide vote."

The tax shift will have significant fiscal implications for the state's General Fund. The state will lose a portion of its current use tax revenues under the proposal. The analysis suggests state general fund/general purpose (GF/GP) revenues will be $107 million lower in FY2016 and $349 million lower in FY2017 as more and more state revenue is shifted to the new local tax. By FY2025, the GF/GP revenue loss is expected to reach $500 million.

Because all of the enacted PPT legislation was "tie-barred" by the legislature, the August vote effectively becomes a referendum on the entire package of reforms. If the ballot question is approved by voters, the personal property tax reforms will go forward, with local revenue reimbursement from the new tax. If the measure fails, all provisions of the personal property tax reforms will be repealed effective for tax year 2015, meaning that all businesses would once again be subject to any relevant tax levies on personal property.

School District Fiscal Health Improves, but Some Long-term Challenges Remain
Memo 1127 ( June 2014 ) 10 pages

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.

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.

State Support of Nonpublic School Students
Memo 1126 ( January 2014 ) 11 pages

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."

Reform of Michigan’s Ballot Question Process
Report 386 ( January 2014 ) 113 pages

The Citizens Research Council of Michigan has released a comprehensive study of the laws and procedures for getting constitutional amendments, initiatives and referendums to the ballot and bringing those questions to a vote. This study was spurred by a seeming growing sense of voter frustration with Michigan’s tools for direct democracy that was felt during the campaigns for the six questions that appeared on the November 2012 ballot.

Reform of Michigan’s Ballot Question Process looks at the ways questions make it to the ballot and compares Michigan’s processes and restrictions to those in place in other states. It looks at the laws that apply to paid petition circulators, the need to better inform petition signers, the petition certification process, and potential campaign and electioneering reform.

The primary recommendations of the report are for the state to require ballot question proponents to apply to the state before circulating petitions and for greater disclosure of those that finance support or opposition to the ballot question campaigns. Changing to front-load the petition certification process would clarify the roles of Secretary of State, Board of State Canvassers, Attorney General, and others involved in the process; eliminate 11th hour races to courts to challenge font size or the substance of proposals; and improve voter confidence in whole process.

“People need more information about the proposals being put before them,” said Eric Lupher, CRC’s Director of Local Affairs. “Moving to a front-loaded certification process would allow for drafting of the 100 word descriptions for inclusion on the petitions; it would allow for analysis of the ballot questions by disinterested parties either inside or outside of government for voters to read before signing petitions; and it would allow for early legal review of the proposals, perhaps copying the process used in other states wherein the opponents and proponents are empowered to write arguments making the case for a yes or no vote on the questions.”

In Citizens United v. Federal Election Commission, the U.S. Supreme Court said that funding disclosure for issue ads could be justified because of the “government interest” in providing the electorate with information regarding election-related spending resources. It left it to the states to establish funding disclosure laws.

“Ballot question campaigning and electioneering is the purest form of issue ads,” said Mr. Lupher. “While Michigan and other states have been embroiled in how funding disclosure laws should apply to political and judicial candidates, those issues need to be separated from ballot issue campaign funding laws to bring more sunshine to the Michigan voters.”

It is the CRC policy to make all publications online. If a document you desire is not yet online, please let us know of your desire. It can be put online with little turn around time. Documents may be requested at crcmich@crcmich.org.

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