Consolidation may be answer for some schools

Gov. Jennifer M. Granholm on Friday signed the final budget bills for the 2010 fiscal year, ensuring that government operations will continue without interruption, and pledged to keep fighting for the priorities that are important to Michigan families.

On Monday she took her message on the road. Speaking in Saginaw Township, she urged legislators to approve “targeted, narrow” tax increases on oil and gas companies and tobacco companies, to raise money to fund Michigan’s public schools.

If approved by state legislators, the tax increases would prevent a $127-per-student cut in state aid to public schools scheduled to take effect in about two weeks, according to the governor.

Granholm wants legislators to get rid of a “double deduction” for oil and gas companies, noting that “while most businesses in Michigan pay their business taxes, oil and gas companies get extra, special benefits in Michigan.”

The governor also wants legislators to require makers of “loose tobacco” and “flavored cigarillos, which a lot of kids buy” to pay the same tax as makers of cigarettes.

Clearly, with these types of nickel-and-dime funding proposals, the state of long-term funding of Michigan’s public schools remains a liability and will continue to be problematic for school boards and administrators in Lapeer County for years to come.

So what’s the answer?

The idea of consolidating school districts has been rising to the top of the list of preferred ways to minimize costs, and while the idea is loaded with logistical issues and obstacles, it shouldn’t be thrown to the scrap heap too quickly,

Particularly with smaller school districts — with student populations less than 1,000 pupils — the discussion of consolidation with one or more neighboring like-size districts may have some merit in these changing times.

Birth rates are continuing to go down for married couples, and with the continued contraction of Michigan’s economy and overall population, many school officials across the state believe the high growth-rate days for their districts are over — at least for the next decade. As a result, the likelihood of significant funding increases from the state of Michigan is remote at best for the state’s 551 school districts.

Faced with declining state revenue, local school officials would be well advised to begin thinking outside the box on how they will continue to get by with less. Not unlike two buddies that are struggling to pay their separate monthly housing obligations, the cost can be shared and spread out if they should share a place together.

The same can be said for school districts that are having a hard time making ends meet. And with no relief in sight, it may make sense to merge the school operations together.

In addition to consolidation, there are other ways Lapeer County schools can cut costs. School districts could reduce spending by sharing more services, including busing, as is being done by several districts in southwest Michigan. One added option may be to privatize those services and allow competition to drive down costs to see any significant benefit. Hundreds of school districts, including several in Lapeer County, already privatize non-instructional services such as food or custodial services and save millions of dollars.

Since about 80 percent of a school district’s costs are tied up in labor, restructuring school employee compensation holds the greatest opportunity for cutting costs. Health insurance and pension contributions are the primary catalysts for these rising costs. Schools should start reducing costs through Health Savings Accounts or definedcontribution retirement plans.

These are a few ideas school districts and the state should consider to deal with the handwriting that’s been on the wall for years. Local school districts have no time to waste to find ways to control their spending.

— Jeff Hogan