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Unintended Consequences

Fiscal policies, zoning push schools out of town

February 22, 2004 | By Mac McClelland
and Keith Schneider
Great Lakes Bulletin News Service

MLUI/Gary Howe
  Pedestrians are rare on the road to Charlevoix’s new high school.

Eventually, every community must deal with worn-out school buildings — always a difficult decision because it involves educational goals, personal preferences, public policy, and cultural proclivities. Yet the decision is often predictable: Americans generally prefer new over old, large over small, and lavish over simple.

It turns out that state school construction policy in Michigan, what there is of it, is heavily tilted to satisfying those preferences.

When it comes to school construction Michigan can be viewed in one of two ways: It is either a model of local control, or a state that lacks direction and tends toward wasteful actions. Why? Unlike most states, Michigan exerts remarkably little oversight of school construction. The state also provides communities with easy access to huge amounts of capital that school boards are clearly prepared to borrow for construction, all of which is financed through local property taxes. Michigan also provides local school boards with the authority to decide how much to spend on schools and where to build them.

On one hand, communities have extraordinary opportunities to make informed decisions. In Escanaba, Jackson, and elsewhere, school boards embraced such flexibility, decided against conventional wisdom, renovated their existing schools, and saved money.

But such localized control also permits communities to depend on outside experts and local leaders who may have narrow agendas or incomplete information. For example, “free” consultations frequently convince school officials that building new is cheaper than renovating, even though research indicates that the opposite is almost always true. Renovation typically costs between $60 and $90 per square foot, new construction about $120 to $160 per square foot.

The Saga of Proposal A
Yet it is Proposal A that inadvertently triggered Michigan’s school construction boom. Proposal A was enacted with the best of intentions — narrowing the funding gap between wealthy and poor districts and reducing tax costs for businesses and homeowners. Its unexpected consequences, however, have been profound for many school districts and hundreds of communities in Michigan.

Passed in 1994, Proposal A cut property taxes by 35 to 50 percent, raised the state sales tax from 4 to 6 percent, and made the sales tax the primary revenue source for public school operations. It also significantly reduced the per-pupil operating expenditure imbalance between wealthy and poor school districts because, before 1994, wealthy districts thrived on high property values, while poor ones starved on low property values. Today Proposal A redistributes money to schools at a base level of $6,700 per pupil.

But because the proposal also lowered property taxes for school operations by an average of 27 mils, it allowed school boards to request smaller millage increases — five or six mils — for either renovating old or building new school facilities. That is why the following year requests for construction bonds doubled and, in the decade since then, bonded debt for construction loans tripled from $4 billion to $12 billion while the student population increased a mere 4.5 percent.

And because Proposal A ties a school’s student population directly to how much money it receives from the state, it has also sharply increased overt competition for students among schools. Since each student is worth at least $6,700 in state funds, losing just three kids from one classroom means a loss of $20,100 in operating revenue for that classroom, while operational costs remain unchanged.

Heightened Competition
This competition can lead districts to build the most spectacular facilities they can afford. The state’s newest and largest example is Holt High School; built in an Ingham County farm field, it cost $67 million and has roughly twice the square footage of a Wal-Mart Super Center.

Parents and school officials often claim that newer, bigger schools mean better education. There is some preliminary research showing a correlation between classroom environment and performance — but not the age or size of the building. In fact Standard and Poor’s School Evaluation Services has found that, in some districts, the oldest schools house
the highest performances. And numerous studies demonstrate that other factors including lower student-teacher ratios, smaller schools, and more parental involvement have a much greater influence on academic performance.

But building new and big at the edge does have one undeniable correlation: The transformation of rural landscapes into suburbs. Families are moving from older neighborhoods in Lansing and East Lansing to new subdivisions near Holt High. Development around that school is increasing traffic congestion, calls for expensive roads, and pollution from storm water running off all of the new buildings and parking lots.

Meanwhile poor urban districts remain at a construction disadvantage because they have far smaller per-student tax bases than their suburban neighbors. To raise the same amount of money per student as a well-off district, a distressed, inner-city district usually must approve significantly larger millage proposals. This has proven to be a tough sell: Since 1996 construction bonds have failed in Flint, Grand Rapids, Saginaw, and Pontiac.

Outside the Zone
Further accelerating the construction boom at suburbia’s edges is the lack of local governmental authority in school board planning. Only the State Superintendent of Public Instruction has jurisdiction over site plans and buildings, and that is traditionally extended directly to school boards. A legal challenge of this law went to the Michigan Supreme Court, which in July confirmed that state law indeed does  “immunize school districts from local ordinances as they affect the content of a school site plan.”

The consequences are sometimes severe. Clarkston, in Oakland County, built a new school on such a poor dirt road that its buses cannot reach it during heavy rains and ice storms. Charlevoix built a new high school that disrupts the township’s master plan.

But even if schools complied with master plans, there would still be problems with local zoning ordinances, which often encourage sprawling development. Large building setbacks, requirements for very big parking lots, severe limitations on building heights, and the mandated separation of commercial from residential development make fitting a school into an existing neighborhood very difficult. It’s one more reason school districts decide to build at the edge of town, and why towns and villages need to adopt “smart codes” that are friendlier to building or expanding neighborhood schools.

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