Michigan's Broken 'Promise'

Michigan's Broken 'Promise'
November 23, 2009/Wall Street Journal


Michigan Gov. Jennifer Granholm, squaring off against Republican lawmakers, has launched a campaign to salvage a $100 million college-scholarship program that she sees as critical to diversifying her state's flagging economy.

Michigan lawmakers stripped funding for the state's Promise Scholarship in their budget for the current fiscal year, arguing that, with auto-industry cuts and 15% unemployment ravaging state coffers, Michigan can't afford to hand out money to college students. The Democratic-controlled state House has since voted to restore Promise funding, but the Republican-led Senate is holding firm so far.

The governor, who says she signed the budget "under protest," is in the middle of a two-week tour of college campuses around Michigan to lobby for tax increases that would help save the Promise program.

The flare-up over Promise is the latest in a series of education-funding battles that have dominated budget clashes between the Democratic governor and Republican lawmakers as Michigan scrambles to fill a $2 billion budget hole for the current fiscal year. Education is a pet issue for the governor, and it is emerging as a key battleground in Lansing as lawmakers weigh the state's fiscal health against its economic future.

"The Senate Republicans removed the Promise scholarship from the budget. I am angry about it," Gov. Granholm said in a weekly radio address earlier this month. The scholarship is "a key component to diversify our economy to create a knowledge work force."

The governor herself has angered school districts statewide by announcing a deeper-than-expected cut in funding for K-12 public schools. That cut hit districts months after the July start of their fiscal year, and forced them to adjust midyear. She incurred more wrath earlier this month when she vetoed $52 million in funds for affluent school districts in a bid to avert deeper statewide cuts.

Now, the lame-duck governor is staking what is left of her popularity on a fight for Promise, which offers about 96,000 high-school students grants of as much as $4,000 for college or technical school. Formerly a merit scholarship for elite students who scored well on state proficiency tests, Promise was expanded by the governor in 2007 to include more students and college choices.

She sees the program addressing a growing economic liability: Michigan's relatively thin ranks of college-educated workers, the legacy of a manufacturing base that used to deliver stable, well-paying jobs to high-school graduates.

"Our whole economy was based on the auto industry where you can go from high school to the factory," Gov. Granholm told a small audience at Oakland Community College in Royal Oak, Mich., last week at the start of her college tour. "We know that times have changed."

To restore funding for the scholarships and mitigate some school cuts, the governor proposes expanding the cigarette tax to all tobacco products, and freezing a tax credit for working poor families, among other measures. She has called for broader tax changes to address long-term fiscal problems brought about by auto bankruptcies and cutbacks.

Lawmakers in Lansing are reluctant to consider any tax increases during an economic downturn. Many of the governor's political opponents see Promise as an unaffordable luxury, and they accuse her of demagoguery on the education issue.

"This is a function of spending the money that you have, not the money that you want," Mike Bishop, the Senate majority leader, said in an interview. "The governor has found the one lever she has that gets to the heartstrings: She uses kids to extort tax votes from the Legislature."

Gov. Granholm rejected that charge. "I'm asking them to take the revenue that has already passed and apply it for this Promise scholarship," she said in an interview. "I am asking them to listen to their constituents."

Democrat Andy Dillon, speaker of the Michigan House, said in an interview that he is still hopeful that a compromise can be reached on school funding. He cautioned, however, that bigger cuts are coming: as much as $700 million to $1 billion next year.

Write to Kate Linebaugh at kate.linebaugh@wsj.com

Posted on Monday, November 23, 2009 (Archive on Wednesday, November 11, 2015)
Posted by rcline  Contributed by rcline