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.

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 pay the bill for health care for the poor. They passed a package of hills that ratcheted up penalties on the state's worst drivers, generating about $70 million a year.

Another $24 million was raised by increasing renewal fees for driver's licenses. Court filing and motion fees went up by $34 million. Even state park admission passes were increased, raising nearly $2 million.

"There's a lot of pain in this budget, but there's a lot of good, too," Granholm said at the time. "It's a bipartisan product. Both sides gave. Both sides got. The victors in this are the citizens."

OTHER ALLIANCES AS WELL

Another defining moment in budget discussions, according to Sikkema, was a rare joint caucus of House and Senate Republicans who mapped out their priorities for budget talks in early spring.

No. 1 on the list: Save the merit scholarships. Also near the top of the agenda were a tax freeze, a funding floor for universities, road expansion projects and preserving a school pupil head count formula that favors rapidly growing districts.

Democrats didn't hold a similar caucus, but they felt confident that after a dozen years of former Republican Governor Engler, their time had come.

When many of the spending decisions favored Republican causes late in the process, House Democrats let Granholm hear about it in a closed meeting. Particularly galling to Democrats were the failure to get $1.9 million for Detroit libraries, a higher education budget that sent some last-minute extra money to universities in Republican areas and deep cuts to adult education.

Ann Dilly, associate superintendent in charge of adult and alternative education in Ferndale, a suburb of Detroit, notes that not all education programs were protected in the first round of cuts.

"Our adult ed program was annihilated," she said. "We have only a skeletal program left. We are barely at 25 percent of the offerings we had before. I had almost 1,700 students before. Now we can serve only 350."

The rationale for paring adult education was that it's more important to give children a first chance than to give adults a second chance.

"If framed that way, of course the choice is children," Dilly said. "But another way to frame it is: Do you want to increase crime rates and public assistance spending or prepare adults for the workforce?

"People come in daily and ask me where can they go, and I don't know what to tell them."

Dilly's program wasn't the only one in the education arena that took a hit. State support of colleges was slashed by nearly 7 percent on average, despite some late funding that went to a few universities on the bottom of the spending scale. That triggered an average 10 percent increase in tuition at the state's 15 public universities.

STILL NOT HAPPY

Despite the resolve of the governor and Legislature to save K-12 education from the chopping block, the reviews from the school community aren't all raves.

"I'm not sure I'd call their effort heroic. We were not spared," said Leonard Rezmierski, superintendent of the Northville schools in suburban Detroit.

The fact that the basic grant didn't include an inflationary increase forced his district to make $2.3 million in program and staff cuts to get ready for the new school year, he says.

Rezmierski says the 6,100-student district is now bracing for another $200 per student cut that may be necessary because of the new deficit.

"We're arming ourselves for a reduction of that magnitude," he says.

Al Short, chief lobbyist for the Michigan Education Association, said the state has a structural deficit in the school aid fund that will require emergency patching every year until the problem is fully addressed.

Michigan voters passed a 1994 ballot proposal cutting local school property taxes and replacing the revenue with a state sales tax increase. Proposal A was supposed to provide enough money to foot the bill for public education. But former Governor Engler had to push through a 50-cent increase in the cigarette tax in 2002 to bolster the school aid fund. Then last year, all property tax collections were moved to summer.

"I'll have to give the governor and the Legislature some credit, K-12 education has been the last to receive reductions," Short says. "But we're at a time now when we just can't sustain the school aid fund. The revenue can't keep up with the program."

The teachers' union blames shortfalls in school funding on reductions in state income and business taxes over the last several years. The tax cuts have "undermined the education revenue stream," Short says. Republicans counter that the tax reductions-more than 30 ushered in during Engler's 12 years--have put more money in the pockets of individuals and businesses and actually increased state revenues.

Granholm and lawmakers have been under pressure from the education community and many other interest groups to stall a 0.1 percent cut in the state income tax--from 4 percent to 3.9 percent--scheduled for this month. Both sides have resisted that move. At press time, no final call had been made.

Justin King, executive director of the Michigan Association of School Boards, said the governor "has been a person of her word. She has done all she could do to protect education funding. For K-12, she has delivered.

"Now, though, everything is up in the air," he says, referring to the latest $900 million budget hole.

Although the governor and legislators have protected education from major damage, the clamor from others affected by budget cutbacks is growing louder. College students, battered by tuition hikes, have held rallies at the Capitol. Medicaid clients have been bending the governor's ear during radio call-in shows.

Michael Brady, director of state and federal affairs for the Michigan Municipal League--which represents the state's 532 cities and villages--says local governments that have already suffered a 3 percent reduction this year can't afford another round.

"We don't oppose adequate funding for education. As most cities see it, what's good for schools is good for the city," Brady says.

"But we're also missing the bigger picture, which is when kids walk to school, they may walk along streets that may not be adequately patrolled or plowed in the winter. It's hard to have a healthy school district without a healthy community."

RELATED ARTICLE: Is education on the chopping block this round?

After chiseling the budget through grueling negotiations to save education, Michigan lawmakers had barely returned from summer vacation when they were slapped with bad news: The hard-fought budget that went into effect Oct. 1 was in danger. The elusive economic recovery in Michigan is taking longer than even the conservative estimates had projected. Unemployment had hit a 10-year high of 7.4 percent, triggering a loss of income tax and sales tax revenue.

Against that backdrop, an Oct. 14 revenue estimating conference found that the fiscal year budget that started only two weeks earlier is already $920 million short. The outlook is dismal for saving public schools from the budget ax this time around. In fact, on Nov. 6, the state sent letters to school superintendents across the state informing them they would face a $196-per pupil cut unless the governor and the Legislature could find an alternative plan or a new revenue source.

The outcry from educators was immediate.

"This cut will go right to the backs of children. It will be very devastating," third-grade teacher Mary Amaradio told the governor, choking back tears.

The cut in the Detroit school system--the state's largest with 157,000 students--would amount to $30 million.

Speaker Rick Johnson was not willing to concede state money for laptops for sixth graders, but the governor all but abandoned the plan.

"Both sides are saying again that education is the No. 1 priority, but that doesn't mean there won't be any cuts to education this time," says Senate Majority Leader Ken Sikkema. "There's a $350 million deficit in the school aid fund. So there will have to be cuts to education somewhere."

Granholm, a telegenic leader with an acting background, embarked on a two-week statewide tour in November to ask citizens where to cut this time. She said she doesn't want to trim the foundation grant for schools, but as the budget problem deepens, even the school aid fund may lose sacred cow status. The laptop program, merit scholarship awards for students who pass state exams, funding for higher education and aid to students attending private colleges were among the items identified by audiences as ripe for cutting.

Again pleading to be spared cuts, the education community is pushing for across-the-board reductions in basic aid should cuts become necessary rather than trimming categorical aid, which would have an uneven impact on school districts. Categorical aid goes for such things as at-risk students, adult education, gifted and talented programs, early childhood education, and math and science centers.

A plan advanced by the Michigan Education Association calls for cuts only in the 337 districts with operating balances above 15 percent of their budgets. All told, the teachers' union said school districts have amassed a $1.8 billion surplus. The other 335 districts would not lose any state aid. Leaders say they're open to that idea.

Under the governor's revised laptop proposal, the state would roll out a scaled-down version of the program with $17 million in federal technology money that would serve only schools with high concentrations of students from low-income families.

For his part, Johnson says he will continue to fight for full funding of the laptops.

At press time, no final decisions had been made about cuts in the school aid fund or the computer program.

RELATED ARTICLE: Putting computers in students' laps.

It's a novel idea that is catching on: Give students their own laptops and watch their achievements soar. "One to one" computing goes way beyond simply putting computers in the classroom. Every student and teacher has his own laptop computer for the school year.

Students "check out" the computers at the beginning of the year and use them at home or at school. Because the programs can be expensive, states usually target seventh or eighth graders.

Maine launched its Learning Technology Initiative in 2002. The program gives all the state's 17,000 seventh graders their own Apple iBook laptop computers at the beginning of the school year. The $37.5 million program (about $300 per user per year) has been so popular that Maine plans to expand it to eighth graders next fall.

Most of the cost is covered by the state. But MBNA Corporation and Education Development Center Inc. (EDC) also have become partners. The Bill and Melinda Gates Foundation helps train teachers to use the technology and incorporate it into their daily classroom activities.

Michigan Speaker Rich Johnson has spearheaded the Michigan Wireless Learning initiative, which would give every sixth grade student a portable wireless computer over the next three years. Texas legislators just passed the Technology Immersion Pilot Project. Iowa legislators are considering a bill to begin a statewide program similar to Maine's.

New Hampshire also looked to Maine when designing its laptops-in-the-schools program that will put computers in the hands of about 600 seventh graders starting this month. Business donations of up to $100,000 will help lease the computers. The program's total cost is about $1.2 million. Twenty-three schools in districts with the highest property taxes and lowest scores on the sixth grade state academic tests were picked to compete for the program. A panel of teachers and business people selected five winners based on proposals they submitted about how they will use the computers and how they will measure success.

One of the largest laptop programs is in Henrico County, Va., home to 43,000 students. In May 2001, the district purchased 13,000 Apple iBooks and distributed them to 22,000 students in grades 6-12. Another 12,000 will be put to use in the elementary grades by 2005. Henrico commits 5 percent of its operating budget to technology.

The results of these programs are beginning to surface. A study by the Maine Education Policy Research Institute found that parents are more involved and students are more interested in school work. Many teachers and principals report that learning, attendance and achievement are all up.--Julie Bell, NCSL 

RELATED ARTICLE: A laptop for every sixth grader, every year.

Michigan House Speaker Rick Johnson is not what you'd call a techie.

"The first thing I did when I saw the computer in my new office was to tell them to get it out and give it to someone who can use it," the five-year veteran Republican lawmaker recalled.

So, how does a 51-year-old technology-challenged tree farmer from rural LeRoy wind up being the champion of a $39 million laptop computer program for Michigan's 130,000 sixth graders?

He saw a spark in the eyes of youngsters in the 1,300-student Pine River Area Schools in his district, who were introduced to the world of learning through a laptop program there.

"In the real world, these kids today, they leave school and go home to some type of video, whether it's a handheld game or something on the TV. They stop at the video marquee on the way home. They do all that at home, and they come to school and get nothing but paper and pencil? You're not going to get those kids engaged at that rate," Johnson says.

"It would be like me getting off my new John Deere tractor and getting back on the old one I used to drive as a kid," he says. "I'm probably not going to be quite as encouraged to plow the field. We can't do that. We've got to keep these kids moving forward."

Representing a farming area in sparsely populated northern Michigan, Johnson is keenly aware of the technology gap that exists among Michigan schools. As a general rule, affluent suburban districts have computers in almost every classroom. Rural districts are among those less likely to have state-of-the-art computers at their students' disposal.

He points to a demonstration project in the Kaleva-Norman-Dickenson School District in northern Michigan, which reported substantial student achievement gains with their laptop program. His plan is modeled after a similar program in Henrico County, Va., where every ninth- through 12th-grade student was given a laptop computer. Within two years, passing rates on state assessment tests increased in every subject.

The speaker faced some tough plowing to get his Freedom to Learn project into this year's state budget. During intense negotiations, he finally coaxed Democrat Governor Jennifer Granholm to buy into the proposal in exchange for a school rainy day fund that she wanted.

"I'm a pretty stubborn guy," says Johnson, who initially introduced his idea to a reluctant Legislature nearly three years ago. "When I believe in doing something I do it."

But having won Round 1, Johnson then faced some resistance from local school officials, who fear that the cost of training and upkeep will outweigh the benefits.

"We reviewed it from every angle and came up with 27 cons and only one pro on the idea," says Leonard Rezmierski, superintendent of Northville schools in suburban Detroit.

He said the biggest negative was there was no guarantee the program would last beyond the initial year, leaving the district to pick up the cost in future years.

School districts are supposed to set aside $25 per computer for maintenance, which Rezmierski says is an unreasonably low figure. In addition, it would cost money the district doesn't have to provide technology training for teachers and staff. "And there's no way of protecting the computer when a sixth grader takes it home and by accident injects a virus into it," the superintendent said. "He brings it back to school, plugs it in, and our entire system is compromised."

The Northville school board politely declined the laptop offer and a growing number of other districts are expected to do the same.

"No, I'm not surprised. It's change, and people are afraid of change," Johnson says. "They say: 'How can we afford it? I say: How can we afford not to do it?"

At the end of summer budget negotiations, Granholm bought into the program to be funded by $22 million in state money and $17 million in federal help. But a still sour economy is forcing the state to make another $900 million in cuts, and the governor says the state portion is a likely casualty. She wants to launch Freedom to Learn with the federal money in schools that serve kids from low-income households.

Johnson vows to persevere.

"Everything in the budget will be tough to keep," Johnson acknowledges. "Although I've probably got more influence than most."

Johnson, who was recently elected to head the National Speakers Conference, proudly displays a stuffed toy giraffe in his office. It's from the Gates Foundation, which made the Republican leader a recipient of the "stick your neck out" award.

"Educators who resist this have got to get out of their cocoon and see what's going on in the real world," Johnson says.

Charlie Cain and Mark Hornbeck are veteran state house reporters for the Detroit News Lansing Bureau. Cain has been with the News for 28 years, and has covered the capital since 1977. Hornbeck has been with the News for 14 years and has covered the capital since 1984.