A battle over how to fund Michigan schools and from the K through 12 school Alliance.

Superintendent Erik Edoff is here to talk about that.

And that's our lead story.

And the Biden campaign takes up residency in Michigan from the U.P.

to Detroit around the OTR table.

Jonathan Oosting, Emily Lawler and Simon Schuster sit in with us as we get the inside out.

Off the record.

Production of Off the Record is made possible, in part by Martin Waymire, a full service strategic communications agency, partnering with clients through public relations, digital marketing and public policy engagement.

Learn more at Martinwaymire.com and now this edition of Off the Record with Tim Skubick.

Thanks very much.

Welcome to studio C for off the record, Well, we have a little dispute going on.

Maybe that word is too strong, but I like it over the school aid budget.

Let's take a look eh.

With over a million school kids in the classroom, what state lawmakers do on the state school aid budget is critical to the quality of education being offered to those students.

This Republican senator doesn't give it a passing grade.

Wouldn't give it a pass ranging between an A to a B minus on the proposal.

Senator Albert's big beef with the Democratic budget is that it redirects $670 million from the teacher's retirement fund into a host of school programs, which he claims are simply not needed and will only eventually drive up the debt in that retirement fund.

Giving free lunches to kids from wealthy families, starting driver's training programs, all sorts of different things where we really just need to focus on making sure our kids can do math and read and and perform better in science.

The public education lobby, meanwhile, sees other spending, including a boost in the per Pupil Foundation grant, which is good news.

We're very pleased to see a 3.1% increase in the foundation allowance, some serious investments in at risk as well as special education.

However, there's a real sticky point in that the Senate Democrats have sided with the governor on how to use the teacher retirement account.

Well, the education lobby favors the House version, whereby they claim an additional 500 bucks could be spent on each student.

All of the management community and the the labor community on the education side advocating for a certain priority.

I think you're going to start hearing from legislators that they want to make it their priority as well to see those dollars come back to the classroom.

There was money for a free breakfast program, more money for mental health and related post-COVID services and funds to recruit and retain teachers, and about $9,700 for every pupil in the state.

However, this debate between the governor and the Democrats and the education lobby not clear how that's going to come out.

All right.

So how serious is this disagreement, Emily?

You know, I think that we saw the Democrats being on the same page for a very long time at the beginning of their tenure here for taking over power for the first time in 40 years.

And this is more along the lines of what I was expecting to see, some sort of different idea.

That's what you.

Were hoping to see.

I'm not rooting it Tim, but I do think that this is sort of a natural progression of a relationship.

Well, this is more of the same house versus Senate, is it not?

Certainly.

And I mean, I think that this sort of shows the disconnect between these agendas.

I think, you know, Governor Whitmer had such a commanding win in the 2022 election.

It allotted her a certain amount of political gravity for her policy agenda.

And you're obviously seeing a shift here with the changing fiscal picture, although bean counters aren't necessarily saying that we're going to have a revenue shortfall, what's possible?

The ceiling on that has lowered.

And so by having this shift, this gives Governor Whitmer more wiggle room.

But then it also gives, I think, the legislature a bigger stake at the table in terms of what they want done.

Yeah, that's the real subtext here.

The state had a big surplus.

It had all of this federal funding that's run out now.

So this is the first budget.

Whitmer And Democrats who are in control are going to have to make that a little tighter.

So what the governor wants to do is shift some money that would have been spent on retirement back into other education programs.

The House agrees generally with that concept.

It's just a matter of how it works, right?

Whitmer wants that money to, you know, the state to save that money so the state can redirect the funds.

The house and the education lobby even further is saying, no, reduce the payments that schools have to make to that retirement.

Take it off our back and put it on yours.

Exactly.

So and then you have this third leg of the stool, not quite as important because they're in the minority.

But the Republicans who are just saying that they don't like the idea of a shift at all, they don't want you know, they set up these systems in place to pay down long term debt to make sure that the retirement funds, the pension fund, the health care fund, we're going to be solvent for the long term.

And they say just because on paper that starting to look better doesn't mean we should end that effort now.

So it's complicated, it's in the weeds.

But the main issue is without this shift in funding, the state would actually be cutting education spending fairly significantly.

It would.

It seems to me that this coalition is is somewhat of a rarity in our town.

They have labor and management all on the same page.

Yeah, I think that is something that is unique about this argument or dispute, as you termed it earlier.

But, you know, I do think that there's like a lot of different legs of the stool, I guess as Jonathan put it, and a lot of competing ideas.

And frankly, this is what conference committees are for, right?

There's a proposal on the table.

There are competing proposals on the table, and you get in a room and hash it out.

And unfortunately, we're not invited, which seems rude.

But yeah, well, that's the reality.

It would seem to be that this coalition goes to, particularly members of the House who are wishy washy on this and say, look, we're looking at the calendar.

You've got a primary coming up in August, don't you?

Yeah, absolutely.

I think the election year is what overshadows all of this.

There's a certain couching of expectations, but I think there's also, because of what they're looking to do with this funding, they want to be able to come to their constituents in August and say, see, although, you know, we may not have as much money to work with, we're still delivering for you.

And as a new, you know, Democratic trifecta, the first in 40 years, we still have an ambitious policy agenda that we're moving forward on.

And it wasn't just a fluke because of this glut of federal resources.

And I wonder if some might of like directing it into the specific programs gives you something more concrete to brag about.

You know, expanding school lunches was something that we always sort of said, like, where's the ongoing funding for that?

Expanding universal pre-K is something that, you know, a question hanging over It was where that ongoing funding comes from.

And I do think that, you know, maybe those programs are easier to talk about than a general school and get more money.

Well, plus, there's the potential loss of all that mental health services and the counseling and tutoring stuff that went on post-COVID.

Some of those people may evaporate, but for lack of money, some of this might end up there for sure.

Well, yeah, a lot of the districts themselves were getting money from the federal government as well.

That expires this year.

As you mentioned, counselors, school support staff.

The state had a program where they were paying part of the salaries for districts to bring those folks on using COVID money.

So a lot of the stuff is all coming to a head.

I mean, it's been good for schools in the state that they got all this federal money.

But now how you know, did you use it on long term expenses or did you use it on one time expenses because you could spend it on salaries like Ann Arbor seems to have done somewhat.

You're looking at potentially having to make some painful cuts this summer during the budgeting process for local school districts Well, the L word is now in play layoffs.

Yeah, absolutely.

And I think that's something that we've seen in Ann Arbor now is that specters raise its ugly head and as a result is Jonathan was mentioning there's little control that the state has over how these local school districts use these funds.

And so as a result, this gives the school districts as well a little bit of wiggle room because they're not they don't have that sort of OPEB monkey on their back.

Well, the interesting part of their story, it will affect the quality of education from virtually every school kid is out there.

How if you were betting on which side is going to win, which side would you bet on?

You know no bettors in the group.

well, the House plan actually is somewhere in between what the education lobby wants and what the governor wants.

So I woulnt be surprised.

Theres a middle ground there.

Im not going to bet.

But I will say over the last decade, we've seen increases in education and whether we see increases in these specific programs or the overall bottom line, they're going to be an increase.

Yeah, the bottom line, Democrats want to put out a press release that says record funding again for K-12 schools every year.

That's right.

It's sitting on the back desk waiting to be issued.

Yeah, I think that obviously it's a lot easier to be like, hey, look at my new sports car instead of I'm making extra principal payments on my mortgage.

How cool is that?

And so, yeah, absolutely.

And I think one of the short fallings of our budget process that people have complained about for a long time is there's a level of opaqueness in that until we see these documents come out of conference committee, we don't really know all of the stakeholders that are at play, what all the demands are in terms of looking at where this flexible funding can go from different stakeholders.

And so the number that they're arriving at in the House and the Senate, we're seeing that sort of as a as a signal for where these stakeholders are.

But we really don't know how things are going to shake out.

The bad news for Republicans is the concept of delayed gratification is but a fond memory.

Okay?

People don't want to look ten years down the road.

Okay?

They want to look at what's in front of their nose, enough of the editorial comment.

All right.

Let's move on to number two.

The Bidens.

Everybody and there uncles coming in Michigan.

Yeah, you may have seen Joe Biden as far north as the upper Peninsula this week.

She'll be downstate.

She'll be downstate three days.

Yup, yup.

Upper Peninsula up north and then down state to Midland, Detroit.

And of course, the president himself is coming to the NAACP dinner in Detroit.

So that's a pretty broad swath of voters they're targeting between the two agendas.

Are the two itineraries there?

Well, is it the vice president's husband also in the state?

Yeah.

Yeah.

He's traveling with Joe Biden.

So, you know, and we saw Harris in the state last Monday, I believe.

So I do think.

Does the White House event, not a campaign event.

Yet.

So in quotes.

So is this an indication?

Well, one, it's an indication that Michigan is important, but is it an indication that this campaign is in trouble in Michigan?

I think when.

You talk to campaign officials, Biden campaign officials, they bend over backwards to say that we don't have concerns.

This just demonstrates why Michigan is secure for us because we're willing to show up, whereas the former president, Donald Trump, is just going to fly in, hold a rally and fly back out.

But we're here on the ground.

And so that's why you should know that we have real commitments.

But they're projecting confidence.

But I think that just the sheer amount of ground time for all of these prominent figures seems to indicate that there are some concerns for the campaign.

Well, the memory of go ahead and.

Michigan isn't alone.

They're right.

Obviously, there's a few a handful of swing states, the blue wall, if you will, that the Biden campaign is paying a lot of attention to.

I think there's a couple of things going on.

One, Biden has an advantage that they have so much money there.

They're holding events as surrogates every other day.

I mean, it's it's a little hard to keep up with, honestly, as a reporter and I don't know, I want to cover some of those surrogates.

But that said, they they also Biden has an advantage that he's not forced to be in New York court several days a week.

So he you know, and his family in this case can have a little more flexibility to be around the state.

But obviously, Michigan is very important.

And Biden himself coming to Detroit, where Jill Biden or Doug Emhoff are ending their statewide tour.

You know, that's sort of the big push this week.

It's nice to be up in Marquette, in the Upper Peninsula.

But Biden himself is making Detroit a priority for a very specific reason.

Biden's coming to Michigan because he wants to win Michigan, certainly.

But I also think this insulates him from, you know, we saw after the 2016 election the backlash against Hillary Clinton.

She felt she people said she didn't spend enough time here.

She didn't put in enough ground game here.

She didn't foresee the 11,000 vote margin that would hand it to her opponent and ultimately hand him the presidency.

You know, to some extent, this is a CYA operation.

Well, some of the recent polling data shows that in Wisconsin, in Michigan, the race is a lot closer than it is in the other four swing states.

So that's good news, you know, for the Biden folks, but they're not home free yet.

Yeah, I think if there's anything that can be elucidated from those numbers, you know, nearly six months out from the election, it's that there's a somewhat of a gulf that we're seeing between registered voters and likely voters.

And among likely voters, this gap is a lot shorter.

But in that recent New York Times poll, that Gulf is considerably wider among registered voters.

And so I think that this really sort of shows how much is going to come down to voter enthusiasm and voter turnout.

And I think that the amount of appearances that you're having from the Biden campaign really, they want to underscore that they're taking nothing for granted and how much they care about, you know, getting that turnout machine running.

And to be clear, I don't think they are.

I mean, going into the U.P., how often do we see national candidates campaigning in the U.P.?

How often do we see, you know, Biden coming into this giant dinner?

I think he's certainly looking to shore up the African American vote.

I really think that, you know, they're making a concentrated play and they're really executing a strategy to try to win here.

I think talking about strategy, let's call in our guest today, the superintendent of the LAnse Creuse down in McComb County.

Erik, good morning.

Welcome to the record, sir.

Nice to see you.

All right.

So you heard our conversation.

Are we making, too much of this dispute?

Do you think this is just a gentlemen and gentle ladies disagreement on how to fund schools?

Yes, I think this is all part of the normal budget process that occurs every year.

And always the executive budget comes first.

And it's a great budget.

It's the governor has been a very strong supporter of public education and gotten us great budgets over the past several years.

But I think this is just an opportunity and kind of a promise that was made to us many years ago that when certain financial conditions were met, that we would benefit from the overpayments we have been making into the system because the funding has reached a level at which there's solvency and it's over 100% funded.

So I think that all three of the budgets are very strong and they have been strong and now it's just a matter of kind of delineating priorities.

And I think the conference process is fairly standard at this point.

But this really isn't just about this year for us.

I don't see this as a single year issue.

This really started in 2012 with Governor Snyder when he enacted the plan in order to create stability in both the pension and the OPEB.

And now that we've achieved that, I just see this as a really historic opportunity for schools.

Yes.

But at the end of the day, let's be honest here.

The governor has one plan and you have another.

That is a disagreement, is it not?

Well, right.

I mean, but I think those types of differences are common even in years when there isn't.

I guess, this substance of an issue on the table.

So I think that, you know, the House and the Senate have frequently and the executive had frequently had different budget priorities.

And years past, even under Democratic control or divided control previously to that.

So I think that this is a this is a conversation.

This is one where we agree on many, many points.

I think the governor was right to raise the issue in her budget back in January when she released in February that when the over funding of OPEB occurred, that seeing some action on that makes sense.

And I see this there's sort of three legs to the stool as as you've inferred and I think that there's a benefit to employees there is possible here too that they've been paying 3% of their salaries of those in the traditional system.

And I think there's a the promise was made to them as well back at that time that once the funding occurred at a level of over much more than 100%, that they would benefit from not having to pay into it as well.

You know, one of the things that I sort of see at the end of this argument is how flexible the funding you get ultimately is.

You know, obviously the governor has some priorities she'd like to fund.

I'm sure you have your own priorities.

So what kind of flexibility?

How do you benefit from the flexibility that you're proposing?

Sure.

I think I think the more flexible dollars are, the more we can operationalize them based on individual needs.

Of course, you know, I think a lot of this has to do with what you also talked about before is we really were very, very proactive with us.

Our dollars with dollars that came out of COVID and really focused on student needs, on mental health needs, on student support needs.

And those programs are just starting to gain traction.

And we have no expectation that the dollars that we're funding them with now and in years past are going to continue.

So I see this as opportunity to continue those programs in a way that they're just needed.

I know the money was one time we knew it was going to be one time money.

There's no question about that.

But we all had to take a leap of faith on the fact that we needed these programs for kids.

And kids desperately needed support coming out of the pandemic.

So I think that any opportunity of flexibility of funds, this is one source.

There are others.

The foundation grant is another.

All of those sources need to be looked at to address shortfalls that are going to occur and are occurring because of the loss of ESSER dollars.

You know.

While this was an opportunity made available to you because of these overpayments in the past, this additional flexibility in spending, clearly it's not an opportunity that can go into the future perpetually.

Do you want to see a long term structural change that can make more sustainable differences in terms of how the funding is allocated?

Sure, of course.

I mean, I think I think that it is should be looked at in terms of if it's over 100% funded on a year by year basis, then the benefit should occur to the parties that were making the overpayments.

So I you know, I think we agree with Senator Albert's plan overall, looking at the 2038 deadline of paying off the system of following the plan as it was enacted for both the pension sign and the OPEB sign side of it.

And the OPEB, according to the numbers that exist today, will remain funded at above 100% through the duration of the payoff period.

And if that remains the case, then I think that the normal cost should be the payment that districts make.

We are still making normal cost payments.

We're making the 100% payments.

And if that ever were to be sink below that 100% again, then we should pay to make it go over 100%.

But I don't I don't think that's forecast.

And I think this is a sustainable model through the payoff period.

Erik, there's been a lot of talk about this idea of a COVID cliff, right?

All these extra federal dollars are running out.

Some of that money came through the state that's running out.

How real of a cliff is that?

Are you guys staring at a cliff?

Our districts around the state and is that cliff this summer as the budgeting process occurs?

Yes, I think for some, unfortunately, it's a cliff.

And for others it's a it's a it's a hill.

It's a hill that is is somewhat steep or somewhat not or somewhat slow.

But in all cases, there is a shortfall of positions that were funded or programs that were funded with those dollars.

And decisions have to be made as to how to continue them, maybe pull them back or slow them down or discontinue them.

And all of those are challenging decisions.

When you know they have only been enacted for 1 to 3 years.

And of course, you don't know how the state budget is going to be resolved yet, Right.

So I'm sure that complicates things.

Just talk a little bit about, though, the mental health side of things.

You said you guys have made a concerted effort there.

Some of those positions I assume you hired were with this money that came from the feds through the state, paid part of the salary.

What did you do and what are you going to have to do now in terms of counselors and psychologists and mental health professionals?

Yes.

First of all, I think I want to I want to wrap around the issue of the OPEB overpayment and the additional UAL payments we make that we are committed to doing and have been into sort of a tax that we have to pay on these types of of all employees.

You know, it's really a 21% tax.

We pay over and above the salary of all of our employees, which makes a very tight labor market for us even more challenging and competitive.

You know, we're trying to be competitive with these types of mental health professionals who do have more transitional skills outside of education.

Unlike teachers and other more traditional practitioners in education.

So, you know, it's very challenging with these extra fees that we have to pay statutorily on top of their salaries.

And I'll just say on the student support side, these positions have been vital.

We made a very early commitment and we did use the money that is now down to 0% reimbursement of salaries to add social workers, counselors.

We added some other behavioral support specialists to all to our elementary schools as well, all in order to try to keep Tier one classroom teaching moving forward while we support kids that need additional help.

And so we're just committed to continuing that, even though the funding is not going to be there from that source, which is why we're looking for other sources to continue those those positions.

You're you're lobbying of the legislature, particularly in the House, to be in an election year for them.

Do you play that card in a subtle way or a direct way to basically say, you know what, if you'd like to get reelected and you'd like our help, we need a vote?

Well, I don't know if it's that direct.

I think that it is.

I think that there is a lot of actually there's a lot of and there's a kind of cohesiveness in the end goal here.

The end goal is we need to focus on teaching and learning.

We need to focus on core practices in our classrooms.

But there are a lot of distractions that exist in schools and a lot of political distractions as well.

That we need additional support to make sure that our core mission can be completed.

And I think, with all due respect, by the same token, the people on the other side of the table need to get reelected.

You can help them.

Right?

You know, I'll be honest with you, I, I personally have worked very hard to depoliticize our schools, both externally and internally through the entire pre-COVID, during COVID and post-COVID.

And I am I am for anyone who is supporting the mission of public schools.

And I really think that they should be as depoliticized as possible.

And we've seen that, too.

We've seen that we've seen support from a variety of individuals within our county, within our K-12 alliance.

As far as Republicans and Democrats who are supportive of public schools.

And those are candidates that we're supportive of.

In terms of the funding that we discussed earlier or the Hill, as you described, that, you know, how much danger is there to you and your school board that you get blowback from the community who didn't necessarily understand that this was one time funding or funding that wouldn't be available, that bolstering some of the programs you're proud of?

Certainly, I think that that is it's not just perception, it's actual service to students.

And I think that that's the more critical piece that we you know, every time you add something into a system, people become reliant on that and it becomes part of the normal operation of the system.

So I think it's both to parents expectations.

It's our own.

It's the rest of our staff's expectations.

Teachers had really been asked to do more and more and more, and their jobs have become objectively and perceptively more challenging.

And so all of these positions are to assist our classroom teachers as well so they can focus on their job.

So I think it's expanded beyond just parental potential blowback.

It's it's it's issues within our own workforce as well that they are they expect and need these supports.

and need these supports.

Now, ultimately, somebody can say to you, look at you can raise all the revenue you want, just go to a bonding proposal.

You don't need the lawmakers.

Well, I think that, you know, that's unfortunately in Michigan since 1994, we have this sort of bifurcated system where our general fund is all that can be used to support salaries and operational dollars and bonding can only be used for capital costs and capital needs and construction and whatnot.

So, you know, that's always been sort of the the double edged sword of proposal A that it created the system that that quite frankly, is is is very unique, I'll say, in Michigan compared to other states that, you know, we don't have the option of just asking our local communities to support staff directly or to support certain positions directly.

And I think, you know, I think that's something long term that needs to be looked at.

You know, that's always talked about.

You know, we always talk about around the edges and around the fringes, but that might be the core issue that we're really need to address long term.

Mr.

Superintendent, good to see you.

Best wishes to all our friends down in McComb County.

And we appreciate your being on the program also, our thanks to our panel next week right here.

More off the record tune in.

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