More taxes for Michigan public education is like a Ponzi scheme
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Yet, the race that is on to extract more tax dollars from those who have yet to lose their homes and jobs to protect the status quo borders on a Ponzi scheme. There is a clear attempt to use our children as pawns to generate additional tax support for fraudulent investments in a broken system that protects what was vs. what needs to be.
(formerly Detroit Renaissance) (www.businessleadersformichigan.com), Citizens Research Council (www.crcmich.org), Mackinac Center (www.mackinac.org). In addition, Gov. Jennifer Granholm appointed a bipartisan Emergency Financial Advisory Panel, co-chaired by former governors William Milliken and James Blanchard and stacked with knowledgeable Lansing insiders, that offered recommendations on how best to avoid ongoing budget crises like Michigan is experiencing now. The governor never acted on her panel's recommendations.
Avoiding these reports and asking for new taxes is perpetuating an intentional deception on the public. Like a giant Ponzi scheme, as long as there is new money coming into the system, the scam can continue. It is when we stop feeding the status quo with new tax dollars that the system, like a Ponzi scheme, seizes up.
Asking for new taxes without reform is a fraudulent investment in a system that will not make us competitive in the global economy. Without serious reform of the system, it is like pouring new money into a glass with a hole in the bottom and wondering why it can never be filled.
We are not investing in education in this state. For the last several years, virtually any new money the governor and legislature has given to our schools has been absorbed by rising pension and health care costs — period! If there was a truth in advertising law in Michigan, the Department of Education would have to change its name to the Department of Health Care and Pensions — because that is where our tax dollars are going.
As state superintendent of schools I sounded the alarm in 2004 that our current system of funding schools was unsustainable in the face of the sharply rising costs of health care, pensions and the large number of small school districts (see the report: Structural Issues Surrounding Michigan School Funding in the 21st Century). The alarm was rung but has gone unanswered.
Covering the rising cost of pensions and health care for our schools would require up to a half-billion-dollar investment per year ($300 per student times 1.7 million students) for the foreseeable future. This leaves no money for schools to invest in programs and services that will prepare our students. Schools have not seen an increase of this magnitude for years; hence, local superintendents and school boards have become "Pac Man," gobbling up or cutting other school functions to pay for escalating health care and pension costs and to maintain a bloated local school district system that is as unsustainable.
If the governor and legislature believe this is a good investment for our state, they should have the political courage to stand up and say they want more of our hard earned tax dollars to perpetuate and antiquated system of 550 plus local school districts that provide pensions and health care that few in the private sector can afford.
Many public schools across the state are financially wobbly today due to the strain of inadequate state funding that has not, and cannot, keep pace with rising health care and pension costs, especially when combined with limited or declining enrollment coupled with the inaction to consolidate school districts.
While some may doubt our system of public education could topple, it is increasingly unstable, unbalanced and ultimately unsustainable unless bold structural changes are made to alter its present course.
Our elected leaders should stop funding a broken system that perpetuates the past and begin the hard work they have been avoiding for far to long — restructuring, reforming and reinventing our state in ways that conform to the new reality and will help make us stronger in the future.
When the taxpayers see this hard work under way, I believe they will be willing to invest in a new tax system that will support services and schools that will make us stronger.
All Ponzi schemes, when new money dries up, ultimately come to an end. It is high time that we stop the games and get serious about fixing this mess.
Tom Watkins is a educational and business consultant in the U.S. and China. He served the citizens of Michigan as state superintendent of schools, 2001-2005. He can be reached at tdwatkins@aol.com
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