Friday News Roundup: Week of February 8-12

At Ed Money Watch, we discuss and analyze major issues affecting education funding. In our Friday News Roundup, we try to highlight interesting stories that might otherwise get overlooked. These stories emphasize how federal and state policy changes can affect local schools and districts.

 <p><b>Michigan Governor Proposes New Service Tax to Maintain Education Funding</b></p>     <p><b>In Fiscal Crisis, New Jersey Governor Freezes Education Spending</b></p>     <p><b>Nevada Governor Proposes Cuts to Education Funding to Balance Budget</b></p>     <p><b>Virginia Governor Proposes Change to School Funding Index</b></p>  <p>&nbsp;</p><p><b>Michigan Governor Proposes New Service Tax to Maintain Education Funding</b><br>Michigan Governor Jennifer Granholm this week released her <a href="http://www.detnews.com/article/20100212/POLITICS02/2120390/Granholm-faces-battle-over-proposed-sales-tax-on-services">fiscal year 2011 budget proposal</a> that would cut the state sales tax rate by a small amount but also would establish a 5.5 percent tax levy on consumer services such as legal services, sports tickets, and landscaping that would go into effect in December. Governor Granholm’s proposal would increase spending under the state’s overall budget by about 4 percent from fiscal year 2010 levels to $47 billion in fiscal year 2011. It would fund education at nearly the same level as fiscal year 2010, using federal economic stimulus money and revenue from the new tax levy to make up for other revenue losses. The budget proposal is unpopular in the state legislature and will likely face an uphill battle. <a href="http://www.detnews.com/article/20100212/POLITICS02/2120390/Granholm-faces-battle-over-proposed-sales-tax-on-services">More here…</a></p>     <p><b>In Fiscal Crisis, New Jersey Governor Freezes Education Spending</b><br>In an address to the New   Jersey state legislature this week, Governor Chris Christie <a href="http://centraljersey.com/articles/2010/02/12/topstory/doc4b7560ea1b3c8439408669.txt">declared the state in financial crisis</a> and invoked a freeze on education spending. The drastic measure came in response to the state’s $2.2 million deficit in its fiscal year 2010 budget. Governor Christie will also revoke state subsidies for higher education, New Jersey Transit, and hospitals, among other cuts. He said his plan is designed to force governmental units – like school districts – to choose between deep cuts or increased taxes. His plan would not reduce classroom aid, but would force school districts to spend down their reserve funds – which total $475 million statewide – before receiving any state aid. Over 100 school districts will lose all state aid for the remainder of the 2010 fiscal year. <a href="http://centraljersey.com/articles/2010/02/12/topstory/doc4b7560ea1b3c8439408669.txt">More here…</a></p>     <p><b>Nevada Governor Proposes Cuts to Education Funding to Balance Budget</b><br>Nevada Governor Jim Gibbons this week proposed that legislators find a way to <a href="http://www.allheadlinenews.com/articles/7017782102?Nevada%20Governor%20Draws%20Criticism%20With%20Calls%20To%20Cut%20Education%20Funding">cut up to 22 percent</a> from the state’s K-12 and higher education budgets. The state faces a $1 billion shortfall in its $6 billion fiscal year 2010 budget. Since education expenditures make up over half of the state’s budget, Governor Gibbons argued that it would be impossible to close a gap of that magnitude without making some cuts to education funding. Otherwise, he told lawmakers, the state will have to raise taxes in order to close the gap. <a href="http://www.allheadlinenews.com/articles/7017782102?Nevada%20Governor%20Draws%20Criticism%20With%20Calls%20To%20Cut%20Education%20Funding">More here…</a></p>     <p><b>Virginia Governor Proposes Change to School Funding Index</b><br>Virginia Governor Bob McDonnell this week proposed to <a href="http://www2.newsadvance.com/lna/news/local/article/schools_face_more_cuts_as_mcdonnell_moves_to_change_index/23920/">update the index</a> that determines how much money each school district receives from the state. The Virginia Department of Education uses the local composite index to determine each school district’s ability to pay for education services, based on daily average attendance, overall student enrollment, real estate values, and retail sales tax. Former Governor Tim Kaine had proposed freezing the local composite index for one year. Typically, under the index, wealthier districts receive less state aid while poorer districts receive more. The shift would not change the overall amount of state aid, but would leave some districts with less money than they planned for in the current fiscal year, while others would receive more state aid than planned. <a href="http://www2.newsadvance.com/lna/news/local/article/schools_face_more_cuts_as_mcdonnell_moves_to_change_index/23920/">More here…</a></p>     <p><b>Briefly Noted</b></p>  <ul type="disc"><li>Utah schools face      tough year as lawmakers vote on <a href="http://www.sltrib.com/utah/ci_14385695">cuts to K-12 education budget</a>.</li></ul><!--break-->