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School Versus New School Budgeting - Will New Approach Work?
MIRS, November 16, 2004
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Commenting on
predictions that Michigan will face a $1 billion budget deficit
in Fiscal Year 2006, Senate Majority Leader Ken Sikkema
(R-Wyoming) warned that the old school of budgeting won't get
the state through its crisis.
"These predictions are based on how government has always
worked, but we need to realize that system isn't working," said
Sikkema. "Suggesting that automatic spending increases and
premature budget commitments are the way to do business just
won't fly anymore. It's time to wake up and smell the red ink."
As reported in MIRS, Citizens' Research Council Director of
State Government Affairs Tom Clay is predicting that the
combination of a series of new spending pressures and federal
revenue reductions mean Michigan lawmakers will be facing a $1
billion hole in the Fiscal Year 2006 — the budget that Gov.
Jennifer Granholm must develop and present to the Legislature
next February.
"Huge spending increases or committing to spending increases
with no clue how to pay for them is what leads to monster
deficits," Sikkema said. "Albert Einstein once said, 'Insanity
is doing the same thing over and over again and expecting
different results.' It's time we stop the insanity in Lansing."
Sikkema has asked his fellow caucus members to read the book The
Price of Government. Written by David OSBORNE and Peter
HUTCHINSON, the book essentially argues that the standard
government budgeting process in the United States simply won't
work. Gov. Jennifer Granholm has also asked her cabinet to
review that book and work in subgroups on how the state's
departments can work more effectively together to provide
services.
The gist of the book is outcome budgeting. The authors describe
a collaborative process where priorities are identified and then
funded with available resources from the top of the list on
down.
During an interview with MIRS in August, co-author Hutchinson
described the difference between his view of budgeting and
traditional budgeting:
"The way I explain to people is the following: In traditional
budgeting, agencies are invited to propose how they would spend
money in terms of the costs to run their agencies. When they're
told that in traditional budgeting the focus is on cost, what
they get from that is: "OK, we need to create as much cost as
possible because it's a contest to see who can get the most
costs covered."
"My smart aleck way of putting it is, 'if you budget for costs,
you always get more of them.' The incentive is built in to make
things look like they cost more and to hide cost and to kind of
make cost the name of the game. It's [the traditional budget
process] all about the agencies and it's all about their
programs.
"What budgeting for outcomes does is it turns that whole thing
upside down and it says to agencies what matters are results and
we want the most results we can get for the price. So the intent
the agencies have is, instead of inventing and piling up and
ascribing costs in all these bizarre ways, is to figure out how
they can produce the most results for the money. To put on the
table proposals every year, and every time they get an
opportunity to create more results."
According to long-term observers and participants of the budget
process, it is time for some frank debate and discussion about
the state's budget.
"It's so abundantly clear we're trying to provide more
government than we can afford and we're going through a very
painful period of adjustment," said former State Budget Director
turned Kalamazoo County Administrator Don GILMER.
Gilmer said the idea of lawmakers sitting down with the governor
and her staff and having a collaborative, cooperative look at
priorities and budgeting for the state is a good one.
"We're going to have to decide whether poor people are going to
have a lot less health care," Gilmer remarked. "We're going to
have to decide whether we're going to have as many state
troopers on the road."
Viewing the world now from the perspective of local government,
Gilmer argued the one thing that has yet to happen at the
legislative level is a genuine look at the mandates that the
state imposes upon local government and some "real repealer"
bills moving through the process.
"We're seeing the taxes [and revenues] cut, but we're not seeing
the demands on state and local government decreased," Gilmer
notes. "So we're going to have these services that are all well
and good but we don't have the money to pay for them. Either we
can raise taxes to fund them, or we need to start repealing
those [services] commensurate with the tax [revenue] cuts."
Craig RUFF, president of Public Sector Consultants, said the
process Hutchinson outlines is "nothing new."
"There's nothing new about zero based budgeting," Ruff said.
"This is something that gets re-treaded about every 10 or 15
years. It's always good for an organization -- including
government -- to set priorities."
However, Ruff warns that the process of "doing a cross walk from
a typical way state budgets are set to this new zero based
budgeting" is a complex one.
"I'm sure the agencies are going through bedlam to build a
budget from the bottom up and I assume at the same time they are
being asked to build a budget the old way," Ruff remarked.
Bill BALLENGER, editor of Inside Michigan Politics, said
outcome, or zero-based budgeting dates back to the late 1970s in
the federal government. Despite the fact that it's an old idea,
Ballenger said that doesn't mean it's a bad one.
"Frankly, it's the way a budget ought to be put together every
year," Ballenger said. "The problem with zero based budgeting is
it requires such rationalization skills and such effort for one
year that after that they [budget officials] sort of put things
on auto pilot."
Ballenger added that the concept is just placing government on
the same plane as most residents.
"Zero based budgeting is just asking government to do what most
practical, common sense Americans do in their own households,"
he said.
Survey: MEAP Doesn't Help Our Kids
MIRS, November 16, 2004
A new survey released today by the Great Lakes Center for
Education Research and Practice suggests that parents don't hold
dear the so-called Michigan Education Assessment Program (MEAP)
test.
The survey found that parents generally don't view the MEAP as
something that is used to help their child. The Center is
arguing that what is driving a lot of the lack of enthusiasm for
the test among parents is a lack of knowledge.
For example, only 5 percent of survey participants claim they
know what such standardized tests are for. Only 1 percent of
those asked listed standardized test scores as being an
important indicator of whether a child is getting a good
education.
“Standardized tests alone don't meet the needs of students and
parents, yet teachers and schools are spending more time, energy
and money on them than ever,” said Teri MOBLO, director of the
Lansing-based Great Lakes Center. “Standardized testing is not a
bad thing if it is one of many ways that student progress is
assessed. But we must find better ways to use such tests to help
individual children, and we must address the other things that
parents believe are even more important for their kids.”
The survey found that parents rate grades, report cards and
classroom tests as the most important indicators of whether
their child is getting a quality education. Their child's
interest in and attitude about school come next.
Conducted by EPIC/MRA, the study included interviews with 1,700
parents in early October and has a margin of error of 3
percentage points.
The following are some of the findings of the survey:
- 20 percent of parents believe their child's test results will
actually be used to specifically help their child improve his or
her performance.
- Only one-third of all parents believe that such tests provide
a good measure of their own child's abilities.
- Two-thirds of parents do not discuss standardized tests at
parent-teacher conferences. This is a fact the center argues
raises the question of how valuable the tests are since they're
not being discussed.
- Only one percent of parents listed standardized test scores as
being an important indicator of whether or not their child is
getting a good education.
- 5 percent of parents claim they know what such tests were
designed for and 30 percent of parents do not know what the
results of such tests are used for.
- When asked what their child needs in order to be successful,
parents did not mention standardized tests.
- One in four parents say schools spend either too much or too
little time prepping kids for tests.
- A large segment of parents still don't seem to be in agreement
on how standardized test results ought to be used.
- One in three parents said they feel that rewards such as
increased funding from the state or higher property values based
on a school's test results is a bad idea.
- One in three parents asked feel that the current state and
federal government consequences under the No Child Left Behind
Act for schools that perform poorly on such tests are a bad
idea.
“What this study suggests is that while parents don't reject
standardized tests, they don't seem to be in agreement on how
useful the tests are or how they benefit their individual
children. Parents are concerned that time and energy spent on
tests ought to directly benefit their children today instead of
children in the future,” according to Ed SARPOLUS,
Vice-President of EPIC-MRA.
Higher Ed Fearful Despite High Level of
Financial Aid
MIRS, November 16, 2004
The growing financial aid opportunities for Michigan college
students couldn't dispel a looming sense of dread at a press
conference today held by the Presidents Council for the State
Universities of Michigan.
Executive Director Mike Boulus and Western Michigan University
President Judith Bailey eagerly pointed out that increases in
college financial aid have outpaced increases in college tuition
in the past few years. However, they also warned that continuing
trends of limited state assistance and tuition caps may leave
both universities and students high and dry.
“When the government places a cap on tuition, it makes it harder
for universities to provide resources,” Boulus said. “It's not
sustainable for growing enrollment and higher quality.”
A recent study of Michigan's public universities conducted by
Hank Prince found that in last few years, financial aid has made
the actual cost of college education dramatically lower than its
sticker price. In FY1998, the real cost was 60 percent of the
cost of tuition while in FY2003, the real cost was 45 percent.
Boulous and Bailey both maintained that Michigan may not be able
to enjoy these same opportunities if the state doesn't offer
sufficient assistance.
It should be noted that these promising numbers do not include
any data after December 2003, when funding for higher education
was hit especially hard in Michigan. Boulous said that since
that time, higher education appropriations have been cut $289
million, which he said is the equivalent of 100 percent funding
for 7 of Michigan's universities.
Furthermore, although the report shows that students have
consistently enjoyed good deals in the cost of their education,
the financial burden on the student has steadily increased since
FY2001. In that year, the net average tuition rate was $2,058,
in FY2002, it was $2,251, and in FY2003, it was $2,495.
Despite their concerns, the speakers at the conference said that
the report demonstrates that the cost of higher education is
significantly less than what the public perceives. They
suggested that Lt. Gov. John Cherry's Commission on Higher
Education could use the report to help inform Michigan residents
that a college education is closer in reach than they might
think.
Bailey asserted that Michigan must draw in more students to
universities and offer abundant resources to them if the state
wants greater economic success.
“We're investing in the brain trust of Michigan, and that brain
trust is the economic development of this state in the future,”
she said.
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