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State robbing Peter to pay Paul

October 6, 2010
By Dionna Harris

ESCANABA - The state of Michigan has once again "Robbed Peter to pay Paul," as the old saying goes.

In this case, Peter is the School Aid Fund which was projected to have a surplus of approximately $208 million.

The authorization for this "legal robbery" comes under Public Act 158, which transferred the $208 million surplus in the School Aid Fund to the general fund.

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Dionna Harris

The purpose is to help balance a projected $400 million-plus deficit heading into fiscal year 2011 on Oct. 1.

The rationale behind the transfer is the anticipated receipt of $300 million in federal funds, which may be used to replace the funds so recently transferred.

Forgive me if I find this rationale a little more than troubling.

The School Aid Fund receives its funding from revenues generated by sales of lottery tickets and other tax bases. Anyone who has ever purchased a lottery ticket, even recently, may have seen the posters issued by the Michigan State Lottery Commission, proud of the fact that funds generated from the sale of lottery tickets supports education in Michigan.

Once again the legislators in Michigan have proven they are above the very laws they draft, ratify and sign into being.

In 2009, $724.5 million in net revenue from the sale of lottery tickets in Michigan was transferred to the state's School Aid Fund.

According to the Michigan Lottery website, "The School Aid Fund is a restricted fund that can only be used for education. Lottery revenues comprise roughly 5 percent of this fund, with the other 95 percent of the money coming from the state's sales and use tax, earmarked income tax and state education property tax, as well as cigarette, liquor and other taxes."

Since 1972, when the state lottery was initiated, approximately $15.2 billion in net revenue has been generated to support K-12 public education.

With $15.2 billion generated over the past 38 years, how is it that public schools are finding themselves in the situation they are today.

Schools are also faced with cutting extra-curricular programs or finding alternative funding sources for sports, music, and drama programs. Why are students using textbooks which are clearly outdated, outmoded, and unable to compete with social and economic changes which have occurred within the past decade.

School boards in Michigan are forced year after year to craft a balanced budget, and by Michigan law, have it adopted for a fiscal year which begins July 1.

When drafting their budgets to meet the July 1 deadline, school districts must draft their budgets with no information of what amounts in state aid each district will receive for each new fiscal year.

Many school districts unfortunately have adopted a worse case scenario option when crafting their budgets, which all too often becomes reality.

The state on the flip side of the budget process coin, has until Sept. 30 to conceivably have a balanced budget approved and signed for the start of the next fiscal year which is Oct. 1.

Legislators in Lansing with grandiose aspirations have time and again acted as if they themselves are above the very laws school boards and other local governing bodies have to adhere to.

The only difference I can see in this latest atrocity perpetrated on the residents of Michigan, is Lansing is not so very far removed from the politics being enacted in Washington D.C.

It is the mentality that government can spend its way out of debt, and so long as legislators continue to "rob Peter to pay Paul" through the siphoning of money from one budget to another, believing they are "above the law" it is no wonder the state is in the current fiscal straits its in today.

Legislators can shift the blame to the state's current fiscal crisis by pointing fingers at unemployment which is currently is at a historic high - higher even than the national average.

Loss of business. Manufacturing jobs moving to other states or out of the country, depleting the tax base used by the general fund for programs and services.

As my mother used to say when I was younger, "for every finger you point at someone else, there are three pointing back at you."

It's time for legislators to stop robbing Peter to pay Paul, and begin to follow the very laws we as everyday citizens have to follow.

Government, like private citizens, industry, businesses cannot live outside their budgets, and more importantly, cannot spend their way out of debt.

The only proper path for state legislators and Gov. Jennifer Granholm to take at this juncture, is to repeal Public Act 158, and return the $208 million surplus to the School Aid Fund. Then they should begin to craft a budget which falls in line with revenues generated by those taxes and other revenue sources which are strictly for the general fund.


Dionna Harris is a staff writer at the Daily Press



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