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More money for schools in Granholm budget

By Peter Luke and Judy Putnam
Lansing Bureau
February 10, 2005

LANSING -- Gov. Jennifer Granholm today will propose spending $280 million more on local schools next year, increasing per-pupil school funding by $175, with high schools receiving an extra $50 per pupil on top of that.

Michigan's 15 public universities would see still more cuts in their base funding from the state under Granholm's 2006 budget, but the governor is promising to compensate for that with more state aid for campus building improvements.

A more controversial budget move would strip the contract from the state's only privately run correctional facility, a 480-bed prison for youth felons in Baldwin dubbed the "punk prison" by former Gov. John Engler when it opened in 1999.

The state spends $18.3 million annually at the Michigan Youth Correctional Facility, which was part of sweeping reforms designed to move more juveniles, those 16 and under, to the adult prison system.

But the large number of violent youth failed to materialize. The prison is filled with inmates under the age of 20 who commit a variety of crimes, instead of violent youths so young that judges or prosecutors decide to try them as adults.

Mary Lannoye, Granholm's budget director, was to present a package of spending increases and budget cuts for both fiscal years 2005 and 2006 to the Legislature.

Administration officials, lawmakers and state aid recipients provided some budget details Wednesday.

Local public schools would receive a second straight state aid increase in 2006 based on more optimistic estimates of school tax revenue. The minimum foundation grant would jump from $6,700 to $6,875. The minimum grant for high school students would jump from $6,700 to $6,925.

The 2006 budget also maintains current-year revenue sharing funding to cities and townships, at $430 million.

Genna Gent, Granholm's communications director, said the state aid fund can afford the $280 million increase in what would be a $12.8 billion state school aid budget. She said the increased amount for high schools reflects higher expectations for college preparatory work as laid out last year by a special commission on workforce development led by Lt. Gov. John Cherry.

Granholm said in her State of the State address Tuesday that students were simply going to have to study more.

"If we're going to be about rigor, it's nice that the money is going to match a goal of more rigor in the school,'' said Jim Ballard, executive director of the Michigan Association of Secondary School Principals.

But Ballard and others said they worry that the money will be eaten up in rising costs.

The Citizens Research Council, a Livonia-based research group, has estimated that increases in health and retirement costs alone could consume as much as $200 per pupil annually.

"Certainly they need and they deserve an increase, but what I worry about is whether the increase will be eaten up before they even see it because of the health care costs and retirement costs,'' said Sen. Ron Jelinek, R-Three Oaks, the chair of the Appropriations subcommittee on school aid spending.

There's a looming battle between teachers unions and lawmakers to try to lower those costs. A House Education Committee Wednesday approved a resolution to tackle that issue this year. Democrats on the committee opposed it or abstained from voting.

And the Senate is studying potential cost savings by merging school employees into the state employee health system.

The Cherry Commission, which included four public university presidents, placed a high value on the economic benefits of Michigan's higher education system, a concept Granholm said she would embrace. As a result, there was speculation that universities would be spared from further cuts.

But her budget, university sources say, cuts state aid by $30 million this year and another $30 million in fiscal 2006. Granholm officials are expected to announce that the funding reductions would be offset with $200 million in additional state aid for university building repair and replacement.

Granholm is also expected to call for the elimination of $62 million in state scholarship aid to students attending private and independent colleges. That move has been rejected by lawmakers in the past.

One lawmaker said Granholm will seek to slice $50 million from the Michigan Department of Corrections.

Booth Newspapers reported last May that although the youth prison in Baldwin was built as a maximum-security facility, only one-third of the 480-bed prison was filled with levels 4 and 5 inmates, the highest security level. Two-thirds were at the levels 1 and 2, the lowest-risk inmates in the system.

The facility is owned and operated by the Geo Group, based in Boca Raton, Fla., formerly the Wackenhut Corrections Corp.

Corrections spokesman Russ Marlan Wednesday would say only that the state has a contract through 2007 for operation of the facility and a lease on the prison through 2019.

He said the contracts allow the state to withdraw from the contract for a number of reasons, such as failure of the Legislature to provide funding for the facility or a lack of need for the facility.

Contact Peter Luke at (517) 487-8888 or e-mail him at

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