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Posted on Thu, Jan 19, 2012 : 5:59 a.m.

Ann Arbor school board directs administrators to explore legal action against Michigan over funding

By Danielle Arndt

Fed up with the threat of money leaving the School Aid Fund, Ann Arbor’s Board of Education directed administrators to explore opportunities for legal action against the state Wednesday.

The consensus was to, at a minimum, investigate the costs and possibilities of formally challenging the state through litigation — a move triggered by a budget update from Deputy Superintendent of Operations Robert Allen.

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Robert Allen

Allen summarized information he received while attending the Michigan School Business Officials (MSBO) Financial Strategies Conference in Lansing Tuesday and Wednesday.

“I have heard nothing in the last few days that indicates (our budget deficit) is going to be any less than $14 million,” Allen said. “My assumption now is we are looking at least at $14 million.”

He said the only adjustments that possibly would need to be made to this figure would be due to the all-day kindergarten component. He said he believes the legislation slashing per-pupil funding for half-day kindergarteners will stand.

Superintendent Patricia Green said a group studying the logistics of all-day kindergarten at Ann Arbor Public Schools is supposed to have a report to her by Jan. 31. Green will review the report and make a recommendation to the board in February, she said.

The push to explore legal action against the state was spearheaded by Vice President Christine Stead. However, all of the board members were passionately in agreement.

“It’s about time,” said Trustee Susan Baskett. “I’ve said all along we have been way too nice. You have my full support. I cannot believe what they (state officials) are doing to our children.”

“We’re Ann Arbor,” echoed Trustee Simon Lightfoot. “Education is what we do. I think it’s up to us to lead the way because of who we are.”

Trustees Glenn Nelson and Andy Thomas also gave the go-ahead to look at legal remedies to the K-12 funding crisis, but cautioned against sinking too many district resources into the pursuit.

“I certainly support exploring what the legal routes are,” Thomas said. “I would also question if this could possibly be done through the Michigan Association of School Boards or another entity.”

Then the costs could be shared, he said.

Stead’s argument for pursuing a possible lawsuit was the state continuously touts money that is not really there and has given money from the School Aid Fund to colleges and universities, which she said was not the intent of Proposal A.

According to the MSBO, the state has projected the School Aid Fund will have a positive balance of about $142 million at the end of the 2011-2012 academic year. The state is also estimating a balance of about $222 million for 2012-2013, Allen said.

But the MSBO said the state’s projections did not subtract out the approximately $450 million in one-time funds awarded to districts that met Gov. Rick Snyder’s “best practices” or the nearly $500 million allocated to colleges and universities.

Additionally, according to the Michigan Office of Retirement Services, school districts' contribution rates for retiree health care costs will go up for 2012-2013, from just less than 25 percent to about 27 percent. Allen said the MSBO expects that contribution rate to reach 30 percent within the next couple years.

Given this information, Allen said he does not anticipate any immediate increases to the foundation allowance for public schools.

Green had been holding out on Ann Arbor’s budget shortfall, anticipating good news from the state’s annual revenue-estimating conference, which took place Jan. 13.

“Until we know what (the revenue) is going to do, we are not going to be able to know the rest of the equation,” she said during a recent interview with when asked about concessions the district may need to make.

Green was “optimistic,” hoping Ann Arbor’s budget shortfall would be closer to the $10-million mark, she said following Wednesday’s board meeting. But she added, now is the time to be realistic.

Green declined to comment on what items may appear on the chopping block during upcoming budget discussions.

“It’s too premature,” Green said. “We are getting a lot of suggestions from the public. Right now we are looking at everything — across the whole district.”

She said administrators have been going through each department and identifying ways to cut and reduce spending.

The revenue-estimating conference did reveal some good news for Michigan as a whole: $633 million in new and ongoing revenue.

Combine this figure with the unanticipated budget surplus of $457 million and government officials have upwards of $1 billion extra to work with.

State Reps. Jeff Irwin, D-Ann Arbor; Mark Ouimet, R-Scio Township; and David Rutledge, D-Superior Township, all have gone on the record stating some, if not all, of the surplus should go toward schools.

But whether it will remains to be seen, Green said.

Snyder intends to deliver his budget proposal for 2012-2013 on Feb. 9. The Legislature will have until the start of the fiscal year on July 1 to amend and approve it.

Snyder has said publicly this budget will not contain any more cuts to education.

If the governor does propose using a portion of the state’s surplus to replenish the School Aid Fund, Allen said he expects the money would be doled out in the form of additional best practices, perhaps pertaining to student achievement this time, rather than a district’s business operations as in 2010.

Staff reporter Danielle Arndt covers K-12 education for Follow her on Twitter @DanielleArndt or email her at



Sat, Jan 21, 2012 : 7:34 p.m.

Here we go with local officials overstepping their authority. Keep defying the system and Snyder will call out the national guard and send Marshall's to force you to comply with state law. And if Newt Gingrich is elected as president he'll send Marshall's into the courtrooms to remove "activist" judges. Local officials defying legally enacted legislation are not doing democracy any favors, in fact you are doing damage helping to break down the system.


Fri, Jan 20, 2012 : 3:31 p.m.

Maybe they should file a lawsuit against themselves.State won't help you and not the rest of the districts in trouble even though you think of yourself as better than everybody else.At least in my opinion.


Thu, Jan 19, 2012 : 7:20 p.m.

This absolutely is an issue that the courts need to address; money in the School Aid Fund is specifically allocated for K-12 funding, and politicians have no legal basis for dipping into it to fund anything other than K-12 education; nor is there any indication that the citizens of Michigan believe it's appropriate. Divvy up the collected money, on a per-pupil basis; "any other use constitutes fraud". If he wants to "reward" districts for performance, that needs to come from another "bucket", because it's impossible to hand out extra money from a fixed fund without cheating others out of their fair share. And though higher education has been woefully underfunded, in comparison to other states, dipping into the school aid fund for part of it is nothing but a backdoor means of paying for tax breaks for businesses that we can't afford and they don't want if they come at the expense of education and job training. The whole notion that upstate politicians have a better handle on what constitutes "best practices" for the Ann Arbor public schools would seem to run counter to the supposed Republican belief in smaller central government and more local control; and certainly, their attempts to inject their personal religious beliefs into the equation is not only unconstitutional, but proves how disingenuous they are when they claim to favor greater individual liberty. And I'm always skeptical of efforts to "reward" district achievement; as we experienced with the big-government "No Child Left Behind" bureaucratic monstrosity created by Bush, the only thing that is achieved is the diversion of classroom resources into added staff to fill out mountains of paperwork. Seems to me that the proponents of the free-market would want to let it do its job, as it always has, by relying on the battery of standardized tests that have worked in measuring district performance for decades; we need to get politicians out of the classr


Fri, Jan 20, 2012 : 5:19 p.m.

Hey AAguy - Do you realize that, as a hold-harmless district, if the Legislature were to "divvy up the collected money, on a per-pupil basis" as you suggest, that AAPS would see almost a 10% reduction in their per-pupil funding, on top of the almost 2% that was cut last year? While I hate to see any cuts to education budgets, I think a one-year cut of less than 2% when state tax revenue has fallen by almost 20% from the peak a decade or more ago is doing VERY well by K-12 education. Higher education, libraries, parks, public health and the arts have not fared nearly as well.


Thu, Jan 19, 2012 : 8:06 p.m.

The State Constitution guarantees local control .....

Angry Moderate

Thu, Jan 19, 2012 : 7:40 p.m.

Repeal Proposal A if you want local control. Don't put the State in charge of funding and then complain when the State wants strings attached.

Joe Kidd

Thu, Jan 19, 2012 : 6:32 p.m.

Hard to feel any sympathy for AAPS who hired a superintendent at a salary that makes me think that she must be so talented no problem would ever emerge. And rather than expand Huron and Pioneer to ease crowding they just build a whole new high school that appears to be more aesthetic (expensive) than functional (less expensive). So sure go bite the hand that feeds you. Maybe the district needs an emergency financial manager.


Fri, Jan 20, 2012 : 12:51 a.m.

Angry Moderate, Good point...but I would like a better understanding of the math behind this. The motivation behind Proposal A was to keep districts that couldn't pass a millage from shutting down early in the year (Kalkaska was the catalyst, I believe). So, going in, voters knew that there was a Robin Hood-esque redistribution of wealth aspect; yet some districts get an exception by getting more. While other districts survive with much less; Ann Arbor seems to struggle with what they're getting. It will also be interesting to see how this plays out with the Achievement District. We won't see success in those schools unless attempts are made to fulfill some of the basic needs of these students. Will schools that fall into the Achievement District get higher funding? I would hope so.


Thu, Jan 19, 2012 : 9:07 p.m.

@angry - so we could spend our way out of this problem??????????

Angry Moderate

Thu, Jan 19, 2012 : 8:24 p.m.

common_cents, the district receives more because it pays more.


Thu, Jan 19, 2012 : 7:18 p.m.

Add to that Ann Arbor receives a higher per pupil amount than most other districts in the state and yes, it's hard to defend their spending. However, the decision to build Skyline can't be attributed to the School Board or Administration. Under Superindendent Rossi Ray Taylor, the district floated a bond proposal to expand Pioneer and Huron and it was voted down. At the time, the administration said the district could not afford the overhead of another building. The central theme of the opposition was that the two schools would be too big. Later, The plan to build a third high school and make other significant improvements around the district was approved, and certain overhead costs that had been paid out of the general fund were pushed to a sinking bond in order to pay the overhead of Skyline. The community elected to build Skyline.


Thu, Jan 19, 2012 : 6:20 p.m.

Praise the Lord : The School Board has found a way to attract additional funds to manage the School District without any of us asking a thing about their spending habits. We lack the power to sue the Board and make them accountable for their spending priorities. Make hay while the Sun shines.

5c0++ H4d13y

Thu, Jan 19, 2012 : 5:31 p.m.

Tax payers suing tax payers. Sounds like a win-win ... for the lawyers.


Thu, Jan 19, 2012 : 3:58 p.m.

Will this law suit be brought on by the AAPS district lawyer or will it be outsourced to another law firm? I understood (perhaps mistakenly) that the BOE raised the district's lawyer's wage because they thought he would be able to bring in more funding resources for the district. I sure do hope this is one of those instances!

Wilford John Presler IV

Thu, Jan 19, 2012 : 3:41 p.m.

If you lead ...others will follow... this administration must be put into check with their out of control "Robin Hood In Reverse" economic policies! ARM THE HOMELESS

Dr. I. Emsayin

Thu, Jan 19, 2012 : 3:39 p.m.

The title of the article should read, in part, "legal action against Michigan underfunding" (not "over funding", or clarify: over underfunding education).


Thu, Jan 19, 2012 : 3:08 p.m.

So one part of government is going to sue another part of government. The only thing certain about this is that the dollars spent on both sides will be public funds. This is a legislative issue and the solution to it is to campaign and vote and live within the democratic process.

Rosie Lemons

Thu, Jan 19, 2012 : 2:58 p.m.

It's about time schools took a stand! It's WAY past time we stopped robbing our children's futures and making them pay for our past mistakes. We'll never get out of the mess we're in by cutting funds to the schools, our future.

Angry Moderate

Thu, Jan 19, 2012 : 2:58 p.m.

Maybe the Ann Arbor school board should stop blowing what money it has on administrator salaries, achievement gap consultants, unnecessary buildings and technology, and non-educational programs.


Fri, Jan 20, 2012 : 2:16 a.m.

I agree, except for the technology part. The district does need to replace aging equipment that is used everyday.


Thu, Jan 19, 2012 : 4:32 p.m.

That's just crazy talk right there, mister. Cut it out.


Thu, Jan 19, 2012 : 2:48 p.m.

I would like to initiate a lawsuit against public education for sticking their heads in the sands on being fiscally responsible. The defined-benefit contributions should have been converted to defined- contribution plans decades ago. Additionally, many local school boards continue to refuse to shop their health care insurance providers against the MESSA plans. And then their is tenure......only vouchers and tax credits that give parents choice will remedy the financial woes of public education. The MEA is public enemy #1.

say it plain

Thu, Jan 19, 2012 : 7:19 p.m.

absolutely @alarictoo! we can complain all day about what we see as 'waste' or misappropriation in the AAPS and elsewhere, but the fact remains and looms large that our funding system in MI is *very broken*. I applaud the AAPS in this move...sue can a district plan with this ridiculous game-playing about funding?! You try running a 'business' of any sort with such uncertainty about funding?! Wall Street freaks out like their collective hair is on fire when there's "uncertainty" about anything financial, but the schools are expected to constantly do live with uncertainty while planning long and short term and it's *broken* as a model for school funding...


Thu, Jan 19, 2012 : 4:57 p.m.

Well, that lawsuit would still be against the state. When will people get it through their heads that the broken funding structure of Michigan's public schools is a State Government created (with the occasional assist from the Feds via unfunded mandates) and owned problem. It was not, and is not, the fault of local public school districts. Are there ways the school districts can improve how they handle their finances? Certainly. (Don't even get me started on those 2 AM pay increases!) However, when looking at a structural deficit such as Ann Arbor is facing (along with many other districts), it really is a State issue. Unfortunately it is the local municipalities that feel the crunch.

Ron Granger

Thu, Jan 19, 2012 : 2:48 p.m.

Taxpayers should challenge them to return our money to us.


Thu, Jan 19, 2012 : 2:39 p.m.

Ms Arndt: Please provide clarification on the following points: "He said the only adjustments that possibly would need to be made to this figure would be due to the all-day kindergarten component. He said he believes the legislation slashing per-pupil funding for half-day kindergarteners will stand." So, if AAPS sticks with half day kindergarten, the deficit could be much greater than $14 million, correct? If yes, what's the amount? "Additionally, according to the Michigan Office of Retirement Services, school districts' contribution rates for retiree health care costs will go up for 2012-2013, from just less than 25 percent to about 27 percent. Allen said the MSBO expects that contribution rate to reach 30 percent within the next couple years." 25/27/30 percent...of what? The AAPS general fund, teacher salaries? Please explain. Was this increase included in the $14m figure?


Thu, Jan 19, 2012 : 6:56 p.m.

25/27/30 percent of the teacher's payroll - retirement contribution by the district to this fund is calculated on the total teacher's payroll. Right now districts that have 1/2 day kindergarden get money as if the students were in full time kindergarden. The law says that you will only get half if you teach a half day.


Thu, Jan 19, 2012 : 1:51 p.m.

Read "unions". Want to bet the union will support and help pay for this lawsuit , in the same way they are supporting the recall efforts? Why can't they accept that they lost in the last election?

Angry Moderate

Thu, Jan 19, 2012 : 6:02 p.m.

By "protesting", you mean "donating money to influence elected officials"-- something that their own party considers corrupt and undemocratic when the other side does it.


Thu, Jan 19, 2012 : 5:44 p.m.

Why can't you accept that they are a group made up of people who support their position and are fighting for their rights, protesting as is their constitutional right as Americans? Get over it. "They" may have lost the last election, but that doesn't mean they will lose the next one.


Thu, Jan 19, 2012 : 1:44 p.m.

Are you really all so blind as to understand this has nothing to do with our children! Follow the money. It is about administrative pay and perks. Which party of thieves do lawyers throw their money to? Which party do the Unions support? This isn't about K-12. Where do BOE members get their election funding? Stop the insanity. Fight for our kids. Not these greedy BOE folks, administrators and lawyers!

Basic Bob

Thu, Jan 19, 2012 : 1:41 p.m.

Sickening.... Keep in mind this is a Hold Harmless district and already receives additional money from the state. More educated, but definitely not smarter.


Fri, Jan 20, 2012 : 9:25 p.m.

DonBee - I was merely pointing out how "Hold Harmless" districts really work. And while I do not condone discrimination based on economic situation, I am an advocate of local control. Do you think there is a problem when the State is spending 6 times as much on incarcerating a felon than it does on educating a child?


Thu, Jan 19, 2012 : 6:53 p.m.

alarictoo - Does that mean you condone discrimination based on economic situation? That districts that are composed of rich people should be able to spend as much as they want and those in poor districts suffer the inequity?


Thu, Jan 19, 2012 : 2:24 p.m.

Bob, You are taking a very one-sided look at what a "Hold Harmless" district is. What you fail to mention is that we are one of 51 districts where a significant amount of our tax dollars for education are taken away and sent to other school districts. In other words, the reason that we receive "additional money" is that we are giving significantly more in taxes but receiving only about 2/3 of the direct benefit of those taxes.


Thu, Jan 19, 2012 : 1:25 p.m.

Given the AAPS track record, this will only make the lawyers rich. We must have some extra money for lawyers. <a href=",1030524" rel='nofollow'>;dat=19950714&amp;id=mkAiAAAAIBAJ&amp;sjid=1awFAAAAIBAJ&amp;pg=2765,1030524</a>


Thu, Jan 19, 2012 : 1:16 p.m.

Good for the BoE. The situation is out of control in Lansing.


Thu, Jan 19, 2012 : 1:04 p.m.

I'd like to see more discussion about Proposal A and the lack of local control of school funding levels. Why should AA not be able to fund its schools at the level we see fit? Why should we be tied to state-wide distribution of money and then subject to the political winds governing education spending at the state level? And just to be clear: it's not that I mind contributing to the education of kids across the state. What I mind is not having autonomy about how well to fund schools here in our own community.


Thu, Jan 19, 2012 : 7:41 p.m.

I agree, though as you know the intent of Proposal A was specifically to address a gross inequity in funding, with wealthy districts far outspending poorer districts. There are provisions that allow a community to supplement base funding, to a certain extent. What Snyder is doing, in rewarding and punishing districts for compliance with standards developed by outstate politicians with no stake in the local community, runs counter to the spirit of Proposal A; it was never intended to serve as a slush fund to finance the governor's political or social agenda, or as a weapon to force school districts to operate the way career politicians believe they should. I think what's desperately needed is an amendment to it that specifically prohibits the state legislature from being able to tamper with the established formula for fund distribution; we need to get politicians out of the classrooms and let teachers do their jobs.


Thu, Jan 19, 2012 : 6:52 p.m.

dotdash - Proposal A was put in place to avoid the Federal Government coming in with a discrimination lawsuit. Because of the inequity in funding between districts. Go back and read the history (much of it is on microfilm, not on the internet - only the backward looking analysis is here on the internet). If we return to pure local funding, we can expect the Justice Department to file a lawsuit if the NAACP does not.


Thu, Jan 19, 2012 : 5:20 p.m.

I totally agree with you.

Silly Sally

Thu, Jan 19, 2012 : 1 p.m.

A lawsuit? This is a legislative issue and is why we have elections. Not an issue for men (and women) in black robes. Perhaps additional money should go towards K-12 education, or perhaps a half-day kindergarten (as I had as a 5-year old) is in store. I've seen little of the AAPS looking inward at their runaway spending, especially on administrators. This topic is why we have elections.

Jim Osborn

Thu, Jan 19, 2012 : 10 p.m.

@Sparty -The point is that AAPS is suing the legislature in an attempt to get their way since the elected legislature, which represents all of us, the people, has chosen, to allocate scarce funds elsewhere. That is the job of a legislature, not the courts. It is the job of the AAPS Board to allocate funds that it raises via its own taxes, not to force funding from outside its boundaries. It is about elections. Perhaps more should be spent on K-12 education, or university education, but this is an issue that all of us are to decide via our elected officials. (That is her point, I suspect)


Thu, Jan 19, 2012 : 5:47 p.m.

Yes, and the AAPS Board was elected ... and are taking actions they feel are appropriate. Your point is? If it gets to the courts, that is their role, to resolve disputes between citizens or legislative bodies.


Thu, Jan 19, 2012 : 12:36 p.m.

Great. Last month, the BOE sent our tax dollars to the administrators, for raises. This month, they're looking to send our tax dollars to the lawyers, for the courtroom. When are our tax dollars going to be directed to the children, in the classroom? The BOE needs to direct the administration &quot;to explore&quot; a reasonable budget that maximizes the impact of scarce resources towards the top priority -- education, not litigation. Talk about cutting off your nose to spite your face. We have a looming deficit -- do your jobs, BOE, and address it.


Thu, Jan 19, 2012 : 1:34 p.m.

Susie Q, I do realize that as a general matter, an organization cannot thrive with cutting alone. However, our BOE needs to reassess their current direction, and use this difficult situation as an *opportunity* to get the district's financial house in order, which is bloated and inefficient. Instead, their throw up the smoke and mirrors of a lawsuit against an unpopular governor and political administration. The BOE is paving the way for the ultimate scapegoat when they fail to do their jobs. I've litigated in the courtrooms of this state for over 25 years, and I can assure you that a lawsuit on this particular issue will be throwing good tax dollars after bad. Political disputes will, and should, get resolved in the election booth, not the courtroom, where we're only squandering our scarce resources towards a ruinous end.


Thu, Jan 19, 2012 : 1:20 p.m.

Susie Q What you fail to realize is that AAPS may not be able to &quot;cut their way out of this financial morass&quot; But sure as shootin can't continue to try to spend their way out of it!


Thu, Jan 19, 2012 : 1:19 p.m.

Susie Q - I would suggest you look through prior threads on the AAPS budget before you indicate that they can't cut their way out of this. The administration and the BOE have taken the coward's way out over the last two years and cut teachers. The goal was to get people angry enough to fight for more money. The reality is they WASTE millions of dollars each year (Like the $5 million dollar locker rooms and the $3 million dollar Varsity only weight room). Administrative costs are out of whack with other similar districts. AAPS has had more money to spend every year except this one, and they budget on the idea that every year they will get a 5 percent INCREASE in revenue, while student population is flat. That is why the annual budget cutting mess.

Susie Q

Thu, Jan 19, 2012 : 12:49 p.m.

What you fail to realize is that AAPS cannot cut their way out of this financial morass without further eroding the students' educational experience. When the state does not provide more funding and expenses (even if employees take pay cuts and you lay some off) keep going up, things will continue to get worse. Granted, AAPS SHOULD NOT have doled out 10% raises to those at the top in the middle of the night, but the Legislature's move last summer to raid the School Aid fun for the first time ever to fund higher education was a terrible precedent and will continue to haunt us until the School Aid fund is protected from this thievery.


Thu, Jan 19, 2012 : 12:15 p.m.

I agree with the boards move, but I like the idea of doing as a state school board lawsuit, which was recommended by Andy Thomas. The cost to Ann Arbor at the present time for such a lawsuit would only hurt, if the cost can be shared, that would make it better. Even with the surplus that the state has, I see nothing from Snyder that leads me to believe he is going to give back to the schools the money he already took.


Thu, Jan 19, 2012 : 11:55 a.m.

Way to go BOE!!! I support you in this 100%. Lansing and Snyder stole that money from the school aid fund and completely violated the spirit of the law passed by the people of Michigan. We absolutely should push back, and call him on it legally. Thank you for your leadership on this.