Teacher Salaries Need a Closer Look for Michigan to Balance the Budget

A proposal to trim $346.4 million — or $218 per-pupil — from the state's 2009-2010 School Aid Fund budget was soundly defeated in the Michigan House of Representatives as the new fiscal year dawned at the stroke of midnight Oct. 1. When first proposed, the idea of cutting this much from the school budget was swiftly criticized by the governor's budget director, Bob Emerson, who predicted "mass layoffs" because under this proposal, the "School Aid Fund isn't adequately funded." But what is "adequate" funding, and how does Michigan stack up when comparing what it pays for public education to other states?

When the budget director made his harsh and scary prediction, House Speaker Andy Dillon, D-Redford Township, and Senate Majority Leader Mike Bishop, R-Rochester, were preparing to send Gov. Jennifer Granholm several budgets with more cost containment than she wanted - and more critically, none of the tax hikes that she wanted so as to fund more spending. Emerson's rhetoric could surely be interpreted as a deliberate effort to foil the bi-partisan budget plans of the Legislature and re-assert the governor's spending and taxing priorities. And it appears to have worked to some degree. While the Republican-led Senate and Democrat-controlled House agreed on spending measures — and spending cuts — for every other function of state government, the School Aid Fund is the only budget that did not win approval from both chambers.

One way to get an objective handle of what is going on in this dispute — and to judge for yourself what constitutes an "adequate" level of school spending — is to consider the most recent rankings of education cost inputs from the American Legislative Exchange Council, using data from the U.S. Department of Education. For example, according to ALEC, the average teacher salary in the United States for 2006-2007 was $46,593. Michigan has the 4th highest paid teachers on the list, with an average salary of $58,482. By comparison, the state of Washington is ranked 22nd and is representative of a state that was paying teachers closer to the national average: $46,326.

So, if Michigan pays $12,156 more than Washington for each of its teachers, it stands to reason that if we had made the policy choice to hire our teachers just at Washington's wage rates, we'd get a savings of something like that $12,156 for each teacher, every year.

ALEC reports that Michigan had 109,946 public school teachers during 2006-2007. What if Michigan had decided to pay all those teachers at the Washington rate for that year?

Run the math: $12,156 annual extra pay per teacher, multiplied by 109,946 Michigan teachers = $1.34 billion more spent by Michigan taxpayers just that one year for essentially the exact same public service. The proposed reduction of $346.4 million being bandied about by the Legislature right now is roughly one-fourth of that.

Rather modest by comparison, no?

A few more ways to look at this:

TOTAL school aid state spending for FY 2007 was just under $12.7 billion. Therefore, paying each of our teachers about $12,000 more than an average-spending state such as Washington appears to account for more than 10 percent of our annual school aid spending.
The House Fiscal Agency reports 1.68 million public school students in FY 2007. Divide the $1.34 billion by 1.68 million kids and you get a $798 per pupil "surcharge" against Michigan taxpayers simply because of a policy decision by our school districts to pay so much more per teacher than an average spending state like Washington.
Using Washington might be a conservative estimate of what is possible. Try the math above with states like Texas ($41,744 annually per teacher) and Florida ($43,302) that pay less than the national average.

Finally, the entire spending gap that lawmakers were seeking to close for all of the state budgets combined was about $2.8 billion, and about half of that total is going to be filled with 'stimulus' money from the federal government, rather than real cuts. The excess spending on teacher salaries could almost cover the rest all by itself. There would seem to be a plausible case to be made that funding for public schools in Michigan has been far more than "adequate."

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Ken Braun is a policy analyst at the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.