This is not a column about school funding. Let’s get that out of the way right now.
Instead, this is a column about what we want for our kids today, and tomorrow.
Our policy makers have done a lot of talking over the past two decades about priorities, about the business climate, and about making Michigan a better place to live, work and raise a family.
At the risk of violating the separation of church and state, I’m going to extend to policy makers some advice my father gave me long ago. “Ron,” he’d say, “the good Lord gave you two ears and one mouth for a reason. You can’t learn much of anything when you’re talking.”
Lower Taxes, Higher Unemployment
A recent study by former Michigan Department of Treasury official Doug Drake, and another by the Center for Michigan published in the Bridge Magazine, suggests our policy makers are listening to the wrong people. Or that they’re not listening, period.
Drake in May released a report indicating two decades of tax cutting that began in 1994 with the public’s adoption of Proposal A has brought little except the loss of $51.1 billion in tax revenue. New jobs? Nada. A more diverse economy? Not really. Drake reports Michigan continues to rise and fall with the auto industry.
Michigan is now 49th among the 50 states in the share of state revenue generated from business, according to the report entitled Michigan’s Tax Policies: Wrong Turns on the Path to Prosperity.
Today, Michigan businesses pay just 35.8 percent of state and local taxes. The national average is 45.2 percent; Texas business pays 61.5 percent (as a reference point from a state often admired for its growing economy and business-friendly policies).
Wasn’t the return on low tax rates supposed to be more high-paying jobs? Instead, our unemployment remains a full 25 percent higher than the national average and our per capita income has fallen from 18th to 35th among the states.
Lower Per Capita Income
“Michigan’s tax cuts have been deep and dramatic,” says Drake. “Going back to 1977, we find that state and local revenues in Michigan have increased by less than any other state on a per capita basis and are 42nd lowest when measured as a percentage of per capita income.”
And who do you suppose has suffered the greatest losses in revenue as a result of these policies? Your schools. Just over $38 billion of the $51 billion in tax revenues lost to our state would have gone to fund our schools.
While spending doesn’t always relate directly to performance in education, there is a correlation. A recent survey of spending data found Michigan 39th among the states in school funding from all sources and, perhaps not so coincidentally, 41st among all US reporting entities on ACT scores.
The Education Economy
Lou Glazer, head of the Michigan Future think tank, has, for years, generated data indicating educational attainment is a far better predictor of a state’s economic vitality than tax rates.
Glazer’s most recent newsletter contains a chart from the Bureau of Labor statistics that correlates educational attainment, average weekly earnings and the unemployment rate. It finds the range of unemployment among those with post-secondary degrees ranges from a high of 4 percent for those with a bachelors’ degree to a low of 2.2 percent with those who hold a doctorate, with median weekly earnings ranging from $1,108 for a four year degree to $1,714 for those with a professional degree.
At the other end of the scale, the bureau reports a range of unemployment from 11 percent for those with less than a high school degree to 5.4 percent with an associates, and median weekly salaries ranging from $472 for non-graduates to $777 for those with the two-year associates degree.
People Support Education
Let’s go back to my father’s admonition about listening. If our policy makers were listening to the broadest possible group of constituents, they may have heard what the Center for Michigan has recorded the last couple of years in their Community Conversations.
The Center for Michigan 2014 Public Priorities survey, a combination of Community Conversations and online surveys, found people overwhelmingly support increased funding education. Four of five respondents in the Center’s study said more money should be invested into making college more affordable. The second highest priority was more K-12 funding which, at 46 percent, was nearly four times the 12 percent who listed roads as their top priorities.
Instead, our legislators continue to look for ways to cut taxes, even as the evidence mounts that our policies are fueling a 20-year race to the bottom. Lawmakers have proposed nearly $225 million in tax cuts this session alone, on the heels of a $1.7 billion business tax cut just two years ago.
In recent years, our policy makers have cited Indiana as the model for Michigan. But Indiana is the only Great Lakes state with lower per-capita income than Michigan, ranking 38th among the states. Few of us have heard Michigan should model Illinois or Minnesota, yet those states rank much higher – 15th and 11th) in per capita income, while the anti-tax groups rate them as terrible places for business, with Minnesota at 47th among the states for its tax burden. Funny, then, that so many of our college students move to Chicago immediately upon graduation and the Minnesota unemployment rate is nearly 33 percent lower than the nation’s. Clearly, low taxes do not bring a higher quality of life.
So, who should we listen to?
If we were to listen to the taxpayers who recently approved seven of seven bond and tax proposals to support capital improvements in their schools within Kent ISD, we’d encourage similar investment for operating purposes at the state level. If we were to listen to the economists, the employers and the highly educated workers who are concentrated in high-wage, high-tax states, we’d invest more to create a higher quality of life and less in tax reductions that don’t pay off in more jobs and higher wages.
This summer, the entire legislature is up for election. When candidates knock on your door to seek your support, maybe you should speak up about what you want for your kids – for all kids – today, and tomorrow.