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A Deeper Look — Analyzing
Proposal 4
MIRS newsletter is pleased to present “A
Deeper Look.”
MIRS 10-18-02
For more articles on disabilities and special ed visit
www.bridges4kids.org.
Every two weeks, MIRS publishes a column from one of two of
Michigan's more respected political thinkers and analysts,
former House-member-turned Executive Director of the Michigan
Prospect for Renewed Citizenship, H. Lynn JONDAHL, and Dr.
Lawrence W. REED, president of the Mackinac Center for Public
Policy.
Both men bring a public policy analysis from a perspective
outside of the traditional day-to-day Lansing political arena.
This month's question is:
PROPOSAL 02-4: Should Michigan voters amend the Constitution
to reallocate tobacco lawsuit proceeds?
This week, MIRS features Mr. Jondahl's response.
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Proposal 4 on the Nov. 5 ballot will require Michigan voters
to determine whether they will change the state constitution
to turn over the money Michigan receives from the major
tobacco companies to several non-public agencies and
organizations.
An important debate should occur in Michigan. How should the
state use more than $300 million it receives for the current
fiscal year from the tobacco settlement. Unfortunately, that
debate is not before us. In fact, Proposal 4 is so carefully
crafted it makes that important debate virtually impossible.
Neither a “Yes” vote nor a “No” vote will result in a wise
decision about how these dollars should be spent. The Proposal
turns out to simply – but importantly – be a vote on who will
decide how those dollars should be spent. On that question the
wise public policy vote is a “No” vote in order to assure that
the important debate about how to spend the money will be made
by accountable elected representatives of citizens, not by
private interest groups.
A majority of “No” votes on Proposal 4 means that the decision
about how funds from the tobacco settlement agreement ($330
million for the current fiscal year) are allocated will be
made by the Legislature and governor in the same manner most
other state budget decisions are made. Such decisions about
state spending can be changed by the Legislature and governor
in order to reflect changing needs of the state. This is
especially critical in the context of the current budget
deficit. A majority of “Yes” votes on Proposal 4 would mean
that the decision about how 90 percent of the funds from the
tobacco agreement are allocated will be made according to the
language of the Proposal and can only be changed by another
amendment to the constitution. Passage of Proposal 4 will
constitutionally allocate the hundreds of millions of dollars
annually to specific organizations and agencies with only one
measure of accountability – a report. “All recipients of funds
under this section shall annually file a report with the
Auditor General itemizing their expenditures of funds received
under this section.” The Auditor General will compile these
reports and make them “available to the public by request.”
There is no provision for auditing, evaluating or questioning
– only reporting.
The Attorneys General of Michigan and 45 other states entered
a law suit against major tobacco companies arguing that these
companies are liable to reimburse the states for some of the
health costs attributed to use of tobacco products. In 1999,
after years of litigation, the attorneys general negotiated an
agreement (“the tobacco settlement agreement”) with the states
whereby the tobacco companies will pay to the states a total
of over $200 billion through the year 2025. The estimates are
that Michigan, now receiving something over $300 million per
year will, between 2004 through 2025 receive about $270
million annually.
Although the litigation that led up to the agreement argued
that the tobacco companies should be required to make payments
to the states to compensate for health costs related to
tobacco use, the tobacco settlement agreement did not
determine how states would spend the monies from the payments.
Some health advocates and anti-smoking advocates entered into
a coalition to challenge what they believe is the
misallocation of the settlement dollars in a manner that
excludes programs to discourage smoking and treat
smoking-related health problems.
Michigan stands out as one of only three states (Michigan,
Missouri, Tennessee, and the District of Columbia) that has
allocated no settlement dollars for tobacco prevention. The
Center for Disease Control (CDC) recommends that Michigan
should be spending between $54 million and $154 million
annually for tobacco control programs. Various claims about
total Michigan spending for tobacco prevention range from a
bit over $6 million to nearly $28 million – all well short of
the CDC recommendations. At least Michigan policymakers did
not choose to use any of the tobacco settlement dollars for
subsidizing tobacco production, as did at least one of the
other states with whom Michigan is tied at zero expenditures
for tobacco prevention. (“Show us the Money: A Mid-Year Update
on the States' Allocation of the Tobacco Settlement Dollars,”
Campaign for Tobacco-Free Kids, 7/22/2002)
Currently 75 percent of Michigan's annual benefit from the
settlement agreement is allocated by statute to the Michigan
Merit Award Trust Fund for “Merit Award Scholarships.” The
remaining 25 percent of current income from the agreement is
allocated to the Tobacco Settlement Trust Fund. “Among
recipients of these funds in FY 2003 are: Merit Award
Scholarship ($114.3 million); the Life Sciences Corridor ($45
million): the Elder Pharmaceutical Insurance Program ($30.0
Million); and the Council of Michigan Foundations ($4.0
million).” (Citizens Research Council of Michigan Memorandum
1066, September 2002. (www.crcmich.org/publicat/2000s/2002/props
1-4/memo 1066.html)
It is important to argue that tobacco agreement money should
go to health programs, not scholarships. Proposal 4, however,
is not the way to do it. The proper way to do it is to mount a
public campaign to challenge the Legislature's decision to
allocate the money for scholarships. If this doesn't work and
you want a vote of the people on the issue, don't amend the
constitution. It would make more sense to gather signatures of
voters to put an initiated act on the ballot for voters to
determine a better way to spend the tobacco settlement
dollars. This way your alternative proposal, if passed into
law, could be changed, if circumstances merit it, by a
three-quarters vote of the Legislature. It would not require
another constitutional amendment and the procedure would be
subject to all of the accountability provisions of law.
Proposal 4, if enacted, would appropriate over $92 million to
nonprofit hospitals and nearly $43 million to nursing homes,
along with several other private recipients. Bizzarely, three
individuals, opposed to the Proposal, have organized
themselves as the “Healthy Michigan Foundation” just to show
that the Proposal is so poorly developed as to permit them to
become the constitutionally mandated recipients of over $3
million a year for every year between now and 2025. And all
they would have to do is report their receipt of this windfall
of public dollars to the Auditor General. This alone is reason
enough to vote “No” on Proposal 4.
Whether Proposal A would end the Merit Award Scholarship
program depends on whether the legislature would find some
other source of funding for the program. Given the current
budget deficit that would not be easy to do. Whether Proposal
A passes or fails, the continuation of the Merit Award
Scholarship should be reconsidered. We should have that
debate.
The use of tobacco settlement funds for scholarships for those
high school students who score well on the Michigan
Educational Assessment Program (MEAP) tests is a questionable
policy for a number of reasons – not alone because none of it
is going to tobacco prevention programs or other health
programs. The “Merit Award” scholarship program uses one
criterion to determine who is eligible to receive a $2,500
scholarship to attend a Michigan college or university or a
$1,000 scholarship to attend a school outside the state. The
one criterion is the student's score on the MEAP tests.
The American Civil Liberties Union (ACLU), the Mexican
American Legal Defense and Education Fund (MALDEF) and the
Michigan Conference of the National Association for the
Advancement of Colored People (NAACP), have challenged that
policy decision in court. They see the “Michigan Merit Award”
as a discriminatory program that relies too narrowly on a
single criterion, one designed to test schools, not students.
They are raising the right policy questions.
Kary MOSS, Executive Director of the ACLU of Michigan,
summarized the basis of the suit as follows: “By relying on
the MEAP test to award scholarships, the State of Michigan is
misusing the test. All students should be judged fairly, by
looking at the range of their accomplishments as individuals
in the same way that colleges and universities evaluate
applicants. The State of Michigan has a chance here to fix or
compensate for some of the problems in our educational system;
instead, it is making it worse by using a selection criteria
that everyone knows will help least those we need it the
most.”
The MEAP tests were created to evaluate how well schools are
performing in their responsibility to teach basic information.
Critics point out that students in poor schools rarely receive
the education necessary to pass the test while students from
wealthier districts with more comprehensive programs,
including “Advanced Placement” course, for example, receive
more adequate preparation for the tests. Moss says, “the state
is essentially punishing students for the schools they
attend.” We can see the pattern of who is punished. In 1999,
34 percent of eligible white students qualified for
scholarships (1 in 3 white test takers), only seven percent of
African American students qualified (1 in 14 test takers), 20
percent of Hispanic and 19 percent of Native American students
qualified (1 in 5 test takers).
These figures come from the research of Donald Heller,
assistant professor of education at the University of
Michigan. He contends that, “The evidence is clear that the
Michigan Merit Award Scholarship program will do little to
further the legislation's stated goal of increasing access to
higher education in Michigan. A great number of these awards,
based on what we know from existing research, are likely to go
to students who will attend college anyway. Many of these
students come from relatively wealthy school districts that
already send a large percentage of their high school graduates
on to college.”
For the sake of improving public policy, voters should reject
Proposal 4 and then return to the Legislature with two
challenges. One is to develop and fund a rational and
accountable smoking prevention program. The second is to
address how best to improve Michigan's public education
system. All within the constraints of the difficult budget
crisis. Unfortunately, Proposal A doesn't advance either of
these critical agendas. It's passage would only make matters
worse while mocking the constitution.
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