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By Nathan Peck | MiBiz
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WEST MICHIGAN — Generosity helps, but budget cuts are making the job of educating Michigan’s future workforce more difficult for K-12 districts around the state.

As two communities celebrate philanthropic donations that will help prepare students for later success, the gifts come against the backdrop of continued cuts to education in the state.

In Kalamazoo, the W.K. Kellogg Foundation and Kalamazoo Community Foundation have pledged $11 million to form The Learning Network of Greater Kalamazoo, a partnership with Kalamazoo County schools and nonprofit organizations to support education in the region and raise the literacy rate. Elsewhere, the Grand Rapids Community Foundation announced $4.5 million in scholarships to support education at three northwest side city schools and help students in pursuit of a college or other post-secondary education.

The generosity does little to stanch the bleeding of districts’ budgets as some worry that the state cuts to education are a short-sighted strategy and will put the state at a competitive disadvantage going forward.

The effects of the continued cuts to education will be more long-lasting, Randall Eberts, president and senior economist at the W.E. Upjohn Institute for Employment Research, told MiBiz.

“We definitely are in a knowledge economy, and education is the investment we must be making. We don’t get education by chance. We have to be able to fund from the very beginning,” Eberts said. “Twenty years ago, the discussion was around low cost. Today it is around how do we provide an educational environment? If we are trying to be a low-cost state, we’re trying to compete with Bangladesh. That is a quality of life we don’t want to have — we have to be at the forefront of education, of ideas.”

The focus on balancing the budget and reforms is a worthy conversation, but Eberts worries that the nuance of the budget process was lost in the shuffle as lawmakers worked to complete a budget early.

“The problem is that it is easy to look at a budget for cuts. Every state budget has a flipside and we have to ask what are the benefits of the expenditures? I see the cuts and it is hard to see huge benefits coming to the state,” Eberts said. “We start at the wrong place. What does it take to educate a child? This is what this community (Kalamazoo) is starting to address.”

The bottom line is whether cuts to K-12 and higher education will significantly reduce educational quality and in turn the ability to attract top quality companies and jobs to the region, said Tim Bartik, senior economist at the Upjohn Institute,

“I think there is real reason to think that these cuts might do so, as I don’t think the cuts are combined with reforms of sufficient magnitude to increase the productivity of the educational system sufficiently to offset the cuts,” Bartik said in an email. “While there no doubt are reforms to the teacher salary structure that can increase the real value to high-quality teachers of teacher compensation, at the same or lower cost to taxpayers, it does not seem as if this will be the outcome of the current budget cuts.”

Sheri Welsh, owner of Kalamazo-based management recruiting firm, Welsh & Associates and a partner in the Learning Network, said education is key to economic development and business attraction. Without access to a highly educated workforce, the region will suffer as businesses seek high quality schools both as a source of talent and as a means to attract talent to the region.

“Simply put, education is key to prosperity,” Welsh said.

For Kalamazoo Public Schools Superintendent Michael Rice, the cuts to the budget come as the district has added 2,100 students over the last five years. Attracted by the Kalamazoo Promise, students have been returning to the district. The cuts translate into an $8.5 million cut for 2011, achieved through a mix of one-time and recurring cost reductions. There are becoming fewer areas left to cut, as KPS has cut $23 million out of the budget over the last 12 years through consolidation, privatization, and reduced services. The philanthropy helps, but does not replace adequate state funding, Rice explained.

“Until the state properly funds public education in the state, no amount of philanthropy will fill that gap. No state has defunded its schools to the benefits of its students. Michigan will not be the first,” Rice said. “Budget cuts have been tremendously destabilizing to the K-12 education in the state.”

But what’s the impact?

Legislators worked to keep the impact to public education minimal in the budget that cut $1.4 billion in expenditures. Included in the budget is a one-time, $100 per student bonus for districts that adopt best practices.

“The first step was to get the state’s fiscal house in order. When you look at most K-12 districts, 85 percent of their costs is in labor. Those districts that keep costs and benefits aligned, and under control from a sustainability standpoint will get $100 back (in per-pupil funding). Those that aren’t won’t see additional dollars. We are using the carrot approach rather than the stick approach. If you care about the outcomes of education, you need a sustainable cost structure,” said State Sen. Tonya Schuitmaker, R-Kalamazoo. Debate over the budget has flared up around cuts to education, but Schuitmaker has worked to minimize their impact to schools. “I realize that it comes with some acrimony, but right now you don’t have (a sustainable structure).”

In Grand Rapids, a district with declining enrollment, the effects of the cuts are much more pronounced as cuts to education don’t affect all districts the same, said Grand Rapids Public Schools spokesman John Helmholdt.

Urban districts like GRPS have a higher percentage of special needs, low-income, and students reading below their grade level and receive “categorical” funds to help address students with higher needs. The state cuts have blown a $22 million hole in the district’s budget, amounting to a $470 reduction in per-pupil spending.

“There are generational, political, socio-economic and racial pieces to this issue – these are all very difficult conversations to have. We know that it costs more to educate a special needs student or an English learner,” Helmholdt said. “I give (legislators) credit – they’re trying to address the problems with funding education. I don’t agree with how they’re going about it.”

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TAGS:

• john helmholdt
• kalamazoo community foundation
• learning network of greater kalamazoo
• michael rice
• randall eberts
• w.k. kellogg foundation
• west michigan