GOP Gov. Rick Snyder’s Corporate Tax Cut Drastically Guts Funding For Michigan Schools

Despite an unexpected budget surplus for this fiscal year, Michigan may drastically underfund its School Aid Fund, which is the primary source of dollars for K-12 school districts that educate nearly 1.7 million students.

Last year, the School Aid Fund ran a surplus (much like the overall budget for this year). However, GOP Gov. Rick Snyder siphoned off the School Aid Fund’s money “to plug a shortfall in the state’s General Fund.” To assuage infuriated educators, he agreed to a one-time payment of $200 per student, $100 of which was only received if the district adopted “financial best practices” — including school employees paying at least 10 percent of their health insurance premiums.

But now Republicans say that one-time payment is up, and K-12 schools will not have enough money to make up for the loss come next year. Why? As the Kalamazoo Gazette reports, while Republicans were gutting the School Aid Fund, they also passed a $1.6 billion tax cut for businesses that is costing schools $700 million per year, or $500 per student:

New revenues will offset about $1.3 billion of the $1.6 billion business tax cut, said David Zin, an economist for the Senate Fiscal Agency.

But almost all revenues are going into the state’s General Fund rather than the School Aid Fund, which is losing more than $700 million a year from the business tax cut.

In short, while the General Fund gets new revenues to replace money lost from the tax cut, the School Aid Fund does not.

Thus, the School Aid Fund will see its lowest revenues since 1994, according to the state Senate Fiscal Agency. Kalamazoo Public Schools superintendent Michael Rice said that the decrease in funding means “school districts have seen their revenues eroded by about one-sixth since 2005, when taking inflation into account.” “It’s not simply that the School Aid Fund is at its lowest level,” he added. “It’s also that $1 given to us today buys one-sixth less that it did five years ago.”

Of course, prioritizing the wealthy over working Michiganders is nothing new for Snyder and his colleagues. While enacting $1.7 billion in tax cuts for corporations last year, Snyder also “shaved billions of dollars off future health care and retirement commitments,” ended the state’s Earned Income Tax Credit, enacted a regressive increase in personal taxes, and cut aid for 11,000 families and nearly 30,000 children.

Surveying this field of foregone responsibility, Mattawan Public School Superintendent Patrick Bird said Republicans “[have] given a huge tax break to corporations, but where are they taking those dollars from?”