Education survives in Michigan--for now: despite partisan differences and economic difficulties, lawmakers and the governor reached an early consensus that funding education would be Michigan's top priority.

• Author: Cain, Charlie

Michigan legislative leaders and Governor Jennifer Granholm scrambled like mad this past summer to protect state aid to public education in the face of a flood of red ink.

In the middle of an economic bloodbath, policymakers decided that safeguarding the $6,700 minimum basic grant schools get for each of the state's 1.7 million students in kindergarten through high school was Job #1. And they got the job done.

Staring at a $1.8 billion deficit in the FY 2004 state budget last summer, officials were forced to slice funding to cities, townships and counties by $50 million, shave higher education spending by an average 6.7 percent, chop arts grants in half, take dental and chiropractic services away from Medicaid patients, and raise more than $220 million through a series of fee increases and new penalties on bad drivers. But they saved education.

Republican leaders also fought to maintain the state's $2,500 per student college scholarship program, one of 14 in the nation. The money to pay for the merit awards comes from Michigan's $300 million-a-year share of the national tobacco settlement, a pot of cash that everyone wanted to get their hands on once revenues started dwindling.

In the face of the worst economic downturn in Michigan in decades, House Speaker Rick Johnson pushed hard for a new project: Give every one of the state's 130,000 sixth graders their own laptop computer at a cost of $22 million at a time when dollars are scarce. Michigan would become only the second state to do that.

On top of all that, the rookie Democratic governor wanted to coax lawmakers to set aside a modest amount of cash to serve as a rainy day fund for schools should the economic comeback take longer than expected.

State leaders, despite partisan differences, managed to achieve all those ambitious objectives largely because they reached early consensus that funding education would be the state's top priority.

"As far as I'm concerned, education is the single most important thing we do for the kids of Michigan," Johnson says. "If we don't prepare kids for tomorrow, who will be the president of the university, the chairman of General Motors or Steelcase in 10 or 20 years?"

Leaders were under pressure from "various interest groups who asked why should education be held harmless when others were taking the hit," the governor says. "We decided it was important to maintain the state's commitment to education, to keep the school aid fund whole."

The state was able to keep that commitment, thanks in no small part to a $655 million, 11th-hour windfall front the federal government that came with President Bush's tax-cut package.

In addition, an accounting shift approved more than a year ago helped to prop up the diminishing school aid fund. Former Governor John Engler and legislators mandated all school property taxes be collected in the summer rather than in summer and winter installments, providing a one-time cash bonanza for public schools.

HOW THEY SAVED EDUCATION

Fighting for education was a bipartisan effort in Michigan. Republicans control both houses of the Legislature, and the governor, in her second year, is a Democrat.

Senate Majority Leader Ken Sikkema says the breakthrough came in July when the governor called with a plea to help save the cash-starved Detroit Medical Center.

The Legislature's $50 million aid package for the center indirectly broke the partisan impasse that had stalled agreement on the $38 billion state budget.

The medical center's troubles forced Granholm into a bargaining mode. If she wanted emergency relief for the hospital complex in the middle of her Democratic constituency of Detroit, she'd have to horse trade with the Republicans, who control the Legislature and could block any effort to rescue it.

In the end, she gave at least as much as she got.

"The pressure on her to do something for DMC was there and, coming as it did during the budget, was frankly helpful to us," Sikkema says.

The governor eventually came around to the Republicans' demand to continue giving $2,500 scholarships to teens who did well on state exams. She had wanted to slice the grants to $500 and spend the balance on underfunded Medicaid programs.

That wasn't the only concession for Granholm. Speaker Johnson's laptop program also found its way into the budget--even as adult education was gored by $57 million, or 75 percent.

But Granholm wasn't just in a giving mood. Besides the medical center package, she won concessions from Republicans to create a separate $75 million rainy day fund to cushion school aid against future downturns.

"The tradeoff for Freedom to Learn [the laptop program] was the rainy day fund for schools," Granholm says.

The governor said she never wanted to gut the Merit Award program and agreed to keep it intact when Senate Republicans figured out an alternative money source to help...