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25 October
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What renting says about your financial status

ByMark Huffman

Mark Huffman has been a consumer news reporter for ConsumerAffairs since 2004. He covers real estate, gas prices and the economy and has reported extensively on negative-option sales. He was previously an Associated Press reporter and editor in Washington, DC, a correspondent for Westwoood One Radio Networks and Marketwatch.

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25 October
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A beginner’s guide to buying car insurance

By Rob Infantino/Credit.com

Insurance is an anomaly among commodities; its one purchase that we hope we never have to use. But car insurance is a mandated purchase almost everywhere, and with good reason: If your vehicle were to be stolen, vandalized or in an accident, you could be at risk for huge financial burdens if faced with covering the costs on your own.

Shopping for car insurance isnt rocket science, but getting the best rate possible requires you to understand some basic information. Your rate will be affected by the value of your vehicle as well as any requirements from your state and your lender. Heres a look at some of the considerations youll face when insuring your ride.

What Is a Deductible?

The word deductible refers to the amount of money youll have to pay out of pocket, following an accident, before your insurance kicks in.

So why not always opt for the lowest deductible possible? The lower your deductible, the higher your monthly premium, or out-of-pocket expenses, will be. On the flipside, a higher deductible will lower your monthly payment. When settling on a deductible, pick one that works for your budget. A high deductible can save you money in the short term and might be the smartest choice if you have money saved to cover your deductible in the event of an accident or break-in. If you can afford it, a low-deductible plan will ensure that you wont have to dig deep into your pockets to pay for auto body work or car repairs resulting from a wreck.

Where You Live Makes a Difference

City vehicles are typically subjected to more break-ins, theft and fender benders, and are therefore more expensive to insure than ones in rural areas. In addition, your states laws may require you to carry a certain amount of insurance coverage. For example, if you live in California youre required to carry minimum liability insurance of $15,000 for injury or death to one person, $30,000 for injury or death to more than one person, and $5,000 for property damage. But if you live in New Hampshire, youre only required to have motor vehicle insurance if youve been convicted of certain violations, including DWI and leaving the scene of an accident. Your first step should be to research the insurance requirements in your state by checking with your local motor vehicle office.

How Much Insurance Do You Need?

The car you drive may translate into pricier coverage. According to a survey by Insure.com, late-model BMWs, Mercedes and Audis are some of the most expensive cars to insure because they cost more to repair. Looking for cars that that wont require you to purchase more insurance? Consider a Jeep SUV or a Honda Minivan; theyre among the cheapest new cars to insure.

Finding a balance between good coverage and affordable coverage is important. On the one hand, you want to have enough to cover your losses in the event of an accident. On the other hand, the more insurance you opt for will make for a higher monthly premium. Think it over carefully. You may decide that your 15-year-old jalopy isnt worth the cost of coverage. If you drive a brand new car and are still paying for it, your lender will likely dictate your coverage minimums on the car since it officially belongs to the bank.

The Different Types of Car Insurance

Your car insurance policy is comprised of a handful of different categories of coverage. Heres a list of the most common types and what they mean.

  • Collision insurance covers damage to your car up to its current estimated value, also known as its Blue Book Value.
  • Liability insurance is the portion of your policy that pays for damages youve caused to others if youre found to be at fault in an accident. This covers a wide range of damages, including bodily injury and property damage.
  • Uninsured or underinsured insurance covers your losses if youre hit by someone with no insurance, or not enough insurance to cover the cost of damages.
  • Comprehensive insurance pays for damages that occur to your car that arent collision-related. According to the Insurance Information Institute, this includes theft, vandalism, fire and natural disasters.
  • Personal Injury Protection (PIP for short) covers your medical expenses if youre injured and can sometimes even pay out for lost wages if your injuries prevent you from working.

Look for Discounts

Car insurance companies offer a variety of discounts based on a number of factors:

  • A clean driving record can net you some big savings — up to 45 percent according to Allstate, and 26 percent according to Geico — because it shows youre less of a risk.
  • Safety and security features can also translate into savings. Front- and side-impact airbags reduce your risk of injury, and security alarms decrease the risk of your vehicle being stolen, therefore limiting the insurance companys exposure.
  • If you have a homeowners insurance policy, booking car insurance with the same company may drive rates down even further.
  • State Farm says that car insurance premiums may fluctuate based on how much you drive, your age, sex and marital status, and your credit history. You can see where your credit scores stand for free on Credit.com.

As always, it pays to comparison-shop before buying. Once youve identified the vehicles youre considering, call several insurance companies, who will be happy to provide you with estimates. In most states, insurance is a mandatory, ongoing cost, so doing your homework could go a long way toward saving you money.

  • How your credit score impacts your car insurance
  • What to do if you cant make car payments
  • The worst car buying mistakes you can make
25 October
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Startup Funding Online: The 5 Success Factors

In this article I’ve highlighted some of the most critical factors that drive successful startup fundraises online.

For a brief refresher, it was just over a year ago (September 2013) that we saw Title II of the JOBS Act kick off and unleash a powerful new market for startup funding online, also referred to as equity crowdfunding.

This new capital market created under Title II is showing rapid growth, even while the opportunity to invest is currently limited to accredited investors and institutions.

Restrictions keeping everyday people (non-accredited investors) from participating may be lifted at some point under Title III of the JOBS Act, though regulators have stalled to release final rules.

That said, startupsand investors are not waiting on Title III. The new startup funding market is off to the races. Technology and automation are rapidly transforming the way investments in startupsand small businesses are done – driven primarily by a few leading equity crowdfunding platforms.

Today we are seeing everyday individual investors getting to invest alongside VCs and super-angels online, often in the same deals and at the same terms as some of the worlds most experienced early stage investors.

According to Kay Koplovitz and her article on the impact of the first year of equity crowdfunding, estimates for the startup funding commitments made online were estimated at over $217,000,000 in equity and debt. The sectors leading the way were the technology and real estate sectors.

Within these funding numbers are a variety of potential signals for what leads companies to succeed with raising startup funding online. Here aresome of the potential signals and success factors that are drive startup funding online.

Integrate Offline + Online Fundraising Efforts

Smart entrepreneurs today are using the internet and technology to supercharge their fundraising efforts.

It’s only been a year since equity crowdfunding became legal and widely available to any entrepreneur – but now it’s clear that the fundraising landscape and behaviors are changing.

We’re moving towards a world where an investment ready company has the potential to reach several thousands investors in a day. This has, and will continue to, change the dynamics of direct fundraising efforts inside the board room.

I’ll go out on a limb to say that in another quarter or two, raising startup funding online will become the “new normal.”

Meaning that if you’re an entrepreneur with a startup and you are not taking advantage of the ability to pitch online, get distribution to hundreds or thousands of potential investors, leverage the powerful social proof and signaling that equity crowdfunding brings with it, and use automated investor closing tools that equity crowdfunding provides – then you’ll be missing out on a huge opportunity.

Smart entrepreneurs are also finding that their online fundraising efforts help accelerate and drive outcomes in their direct discussions with investors offline.

More than 75% of the startup founders that I’ve met or spoken with who have successfully used equity crowdfunding found that their online efforts helped not only connect them to new investors they met and spoke with offline, but also played a meaningful role to help close investment from offline investors they were already speaking with.

Online fundraising isn’t a replacement for strategic direct and offline fundraising efforts – it is the perfect complement.

Follow The Leader

Investors trust other investors more than they trust entrepreneurs. As such, who else is investing in a startup is one of the more powerful signals that can attract investors.

In my experience as the CEO of a startup funding platform, our company has observed that when a startup has a credible or notable lead investor in their current funding round it brings roughly 5 times the amount of engagement and follow on investment to a deal- as compared with startupsthat don’t have first money or lead investors in.

The power of of who else is investing and how this impacts the attention and decisions of other would-be investors operates in part on what is called “social proof.”

Social proof is one of the most powerful ways that our thinking amp; decisions are influenced, according to Dr. Robert Cialdini in his book “Influence: The Psychology of Persuasion.”

Of course, finding a notable or lead investor doesn’t happen overnight. It means you have to spend the time to build a real relationship with an active investor.

For one of the better explanations of exactly how and why to get to know and investor and build the kind of relationship that can lead to a lead investment, read the post by VC at Upfront Ventures, Mark Suster, called “Invest in lines, not dots.”

Do the meaningful work of finding some more experienced investors who will both help you arrive at market terms for your funding round, but also bring their name and experience with them. The validation and the social proof will do wonders for your fundraising.

Leverage The Power of Story

Startups and entrepreneurs who excel at fundraising aren’t just the ones that have the best traction or most experienced management team- they’re often great storytellers.

Each investor has what I call the Two Brains. For an investor to invest in your company, you ultimately need to engage, stimulate, and satisfy the Two Brains.

The first brain is the rational and quantitative brain. This is the part of each investor that wants and needs to boil their investment down to the dollars and cents of their potential return and risk. We all know this brain when it questions our sales projections and our financial assumptions.

Inexperienced fundraisers often spend most, or all, of their time appealing to and trying to convince the rational brain to invest.

The second brain is the non-rational, or emotional brain. This is the part of each investor that cares about the context and larger story of a business. The huge market potential you see for your business as an entrepreneur, and the unique approach and culture you’re going to use to serve customers and win this market is what activates the second brain of the investor.

All successful fundraising pitches, even online, start by painting a powerful and compelling story for the investor and then walking them through the rational parts of the business in the context of the larger story.

What’s great about startup fundraising online is that you now have incredible powerful and visual storytelling aides through which to pitch investors – leveraging visual pitch decks, videos, and social proof points like who else is investing – all in one place.

For a template built from other successful startup pitches that will guide you through crafting a powerful story for investors, see The Ultimate Pitch Deck To Raise Money for Startups.

Lower The Investment Minimum, Raise Funding Conversion

Something new and interesting happen when the minimum investment amount an investor has to meet to invest in a startup falls from where it used to be in the past – say $50,000 or $100,000 – and instead comes down to as little as $5,000.

When this happens, both the real and perceived risk and exposure for any single investor changes dramatically. Now, it’s not that investors don’t expect or want a return when they invest smaller sums. They do. It’s that for $5,000 the decision to invest changes.

But won’t a startup have a big problem on its hands with a crowd of small investors?

Equity crowdfunding solves this problem by aggregating these smaller ticket investors in to a single entity or mini “fund.” These mini-funds aggregate the smaller investors together in one entity, and that entity invests as a single entry on the respective companies Cap Table.

This simplification of the funding model provides an effective solution for startupsto lower their minimum investment amount, and enables them to go out and take funding form a larger potential pool of investors

When In Doubt, Execute

If there’s one thing above all else that investors value that helps drive successful fundraising outcomes online or offline, it’s when an entrepreneur has a clear focus, aggressively executes, and creates meaningful results as measured by specific month over month growth or product milestones.

Your fundraising success online and offline will be amplified by these things.

Disclaimer: I’ve been a participant in JOBS Act legislative and regulatory efforts in Washington DC and currently serve as the CEO of equity crowdfunding platform Crowdfunder

25 October
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Fact Check: Tobin voted to lower child-welfare funding

ANALYSIS: The Democratic Congressional Campaign Committee, a political committee that supports Democratic US House candidates, is running the ad criticizing Tobins vote in the Arizona Legislature to decrease funding for the agency formerly known as CPS.

Tobin served as Arizona House majority whip, majority leader and, since 2011, as speaker of the House. Hes running against incumbent Democrat Ann Kirkpatrick in the 1st Congressional District, which covers must of northeastern Arizona.

The ad, titled Uninvestigated, alleges Tobin voted to cut Child Protective Services, which resulted in eliminating 159 caseworkers and investigators. The ad also claims there were over 900 reports of child abuse and neglect that were not investigated by staff members and that Tobin ignored it.

The political committee based its assertion that Tobin voted to cut Department of Economic Security funds, and therefore CPS monies, on his vote for Senate Bill 1001 in the 2009 first special session. The bill was intended to balance the fiscal 2009 budget, which had a projected deficit of more than $1 billion. The bill reduced the DES general fund DES by $83 million and made cuts to the budgets of about 60 other state agencies.

The Senate bill was transmitted to the House on Jan. 30, 2009, and Tobin voted for the bill, which was signed into law by the governor that same day.

In February 2009, DES laid off 620 workers, including some in CPS, because of budget cuts by the Legislature. A month later, CPS made additional cuts, leading to the combined loss of 159 case specialists from their staff and a 15 percent smaller staff.

By fall, during a fourth special session of the Legislature, the House heard a different piece of legislation with the same name, Senate Bill 1001. The bill made revisions to the fiscal 2009-10 state operating budget, which had a projected shortfall of nearly$2 billion.

To make up the difference, the bill reduced DES appropriations by $115 million. The bill was sent to the House on Nov. 23, 2009, and Tobin voted for the bill, which was signed by the governor on the same day.

By June 2013, a CPS report revealed there were nearly 900 uninvestigated cases of abuse and neglect. Days after, Tobin, then speaker, adjourned the House in an effort to stall a bipartisan House coalition, which tried to pass Gov. Jan Brewers $8.8 billion 2014 budget. Brewers budget, which included $77 million to hire 150 CPS caseworkers, came under fire from conservatives, including Tobin, because it expanded Medicaid. The House added more than 50 amendments in an effort to kill the Medicaid portion of the bill. Eventually, Brewers CPS funding was cut by $8 million.

In an Arizona Republic story, Brewers spokesman was quoted saying the governor reached her final straw when Tobin adjourned the House. She called a special session, bypassing him and other legislative leaders in her own party, which Tobin described as pretty bad.

During Tobins leadership tenure, CPS was abolished and reformed as a new agency — Department of Child Safety — that reports directly to the Governors Office. The proposal to create the agency had bipartisan support and passed quickly through both chambers without much opposition.

Tobins campaign released a statement saying the DCCCs ad was an attempt to turn a vital reform our state needed into a baseless attack ad. Tobin, in the release, said, Im proud of my record.

BOTTOM LINE: Tobin voted to decrease funding for CPS on two different occasions for two consecutive fiscal years, to balance a budget and during a recession. He also stalled a 2014 budget bill that included more funding for CPS, because of the bills support of Medicaid expansion.

THE FINDING: Four stars, true.

SOURCES:Uninvestigated; SB 1001 first special session votes; SB 1001 first special session house summary as transmitted to the governor; First special session SB 1001; SB 1001 fourth special session votes; SB 1001 fourth special session house summary as transmitted to the governor; Fourth special session SB 1001; 112 case workers laid off at CPS; DES to lay off 620 workers; Andy Tobin biography; Today at the Capitol; Dems, moderate Republicans debate $8.8 billion budget; Arizona Legislature adjourns special session; Special Session Budget; Arizona House leader moves forward on budget, Medicaid.

24 October
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Moorhead council asked to consider enough funding to restore library hours in …

“Since our hours were cut in Moorhead, we have been hearing a lot from our community members,” Liz Lynch, regional library director for the Lake Agassiz Regional Library System, told the Moorhead City Council on Monday.

Lynch urged the council to look ahead to 2016 to consider providing the additional funding needed to return to previous hours.

The library requested a $12,430 increase in its 2015 budget, which the city has tentatively agreed to fund. That’s enough to maintain the current level of operations, Lynch said.

Hours were reduced to 10 am to 8 pm Monday through Thursday and Sundays were eliminated this year when the City Council declined to give the library a 6 percent funding increase for its 2014 budget.

That relatively large request was “an odd situation,” Lynch told the council, because the library had not asked for a funding increase the previous few years.

“Last year, we asked for a $40,000 increase to try to make up for not asking for an increase for so many years,” she said.

Lynch said the library, which faces increasing health insurance costs and declining state funding, laid off staff and reduced hours after the funding request was denied.

That prompted a public outcry, Lynch said.

“It was quite eye-opening to receive these phone calls and emails and visits regarding the closure,” she said. ” … We have thought about how we can possibly open up again 9 to 9 Monday through Thursday.”

Lynch said an additional $20,000 would be enough to restore previous Monday through Thursday hours and encouraged the council to consider funding that amount in 2016. It would take an additional $40,000 to restore Monday through Thursday and Sunday hours, Lynch said.

The council was asked in January to provide additional funding to the library, but the motion failed in a 4-4 vote.

Council members listened to Lynch’s presentation Monday and asked questions, but did not indicate their position on providing enough funding to restore library hours in 2016.

The council also heard presentations from department heads as part of its ongoing budget negotiations. Engineering and wastewater, planning and neighborhood services, public works and police leaders discussed the year’s accomplishments and plans for 2015.

24 October
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Snowflake Computing Emerges From Stealth With $26M In Funding To …

Snowflake Computing came out of stealth today and announced $26M in Series B funding. They hope to modernize the data warehouse by creating a cloud-based system that can process both structured and semi-structured data in a single system, giving their customers what they believe to be the best of both worlds.

The funding is led by Redpoint Ventures along with Sutter Hill Ventures and Wing Ventures. Sutter Hill funded the seed round and Series A. The company has been around since 2012, but is just emerging today announcing the funding and its first product.

The product, The Snowflake Elastic Warehouse, is a cloud-based service, what they are calling Data Warehouse as a Service. The data warehouse concept actually dates to the 1980s when companies such as financial services and credit card companies were starting to deal with lots of data coming from relational databases and they needed a way to pull data from various systems to make reasoned decisions. These early systems required tremendous resources and IT help to pull off, often took years to build, were expensive to build and maintain and complicated to run, requiring experts to help formulate queries and generate answers.

Snowflake saw an opportunity to modernize this concept by reducing the complexity and putting the whole thing in the cloud. That takes the hardware out of the equation because users can access as much compute and storage resources as they need at a reasonable price, and IT doesn’t haven’t to build or maintain a system in a data center.

End users don’t have to worry about anything except loading data and running queries and the system can scale up or down to meet their needs. This means they aren’t limited by the size of the data stores and they don’t need IT or DBAs to help them -but Snowflake didn’t stop there.

24 October
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LendingClub to join financial brethren on New York Stock Exchange

Although its joining many banks on the NYSE, Lending Club has been quick to say its not a bank. Thats no surprise given the volume of regulation that comes with being a bank. Most innovators in financial services are eager to leave the regulatory burden to others — think Apple Pay (NASDAQ: AAPL).

LendingClub is led by founder and CEO Renaud Laplanche.

In the regulatory filing Monday, LendingClub revealed just how sophisticated the investor side of the equation has become in a business once known as peer-to-peer lending. LendingClub noted that just 24 percent of loans were financed through self-managed individual investors in the second quarter, while 30 percent of the loans were financed by institutional investors and another 46 percent were financed by individuals investing through special investment vehicles and managed accounts.

The New York Times painted those figures as LendingClub seeking to dispel the notion that individual investors are being crowded out of marketplace lending. But the peer-to-peer model didnt originate with the idea that almost half the money invested through the platform would come via special investment vehicles and managed accounts.

24 October
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Wired Internet arrives in Silverton, finally

Pete McKay was downloading a song Thursday at his home in Silverton. The little wheel on his screen kept turning.

Still waiting, he said after several minutes of buffering.

After 20 years of dreaming, 15 years of work, yearly setbacks and countless wasted minutes staring at screens, last-century buffering is ending in Silverton.

This week, the peak-hemmed hamlet became the last county seat in Colorado to be wired for high-speed, fiber-optic broadband Internet.

It has been a long haul for Silverton population 639 and the only town in remote San Juan County.

How is it that we lost every single battle for 15 years and still won the war? said McKay, a 20-year resident and a county commissioner for 14 years.

He answered his question with a quote from Margaret Mead: Never doubt that a small group of thoughtful, committed citizens can change the world.

Over the past two decades, many politicians promised that high-speed Internet was coming to this island in the jagged sea of the San Juan Mountains. Utility companies affirmed the pact. Federal stimulus dollars dwindled. When the 2010 deadline for a statewide plan to wire every county passed, Silverton stood alone in the dial-up desert.

The digital divide has lingered long in Silverton, where a microwave radio relay system ferried Internet and phone calls from the outside world. A fiber-optic cable stopped 16 miles south of town, on the wrong side of the precipitous Coal Bank Pass.

24 October
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Atlas Financial Inks Global Liberty Deal to Boost Position

Atlas Financial Holdings, Inc. (AFH) has inked a deal to acquire New York-based Global Liberty Insurance Company and its affiliated underwriting and premium finance companies for $25 million, subject to final adjustment. The transaction is expected to close in the first quarter of 2015.

Shares of Atlas Financial gained 7.1% and closed at $14.88 per share with the news coming in the middle of the trading session. Given the optimism regarding the deal, the share price is expected to rise further in the next few trading sessions.

Global Liberty provides services in the light commercial auto sector, primarily insuring limousine, black car and luxury car vehicles. The company, which is an admitted carrier in 14 states, underwrites around $40m of annual commercial auto direct written premiums and has $19.5 million of GAAP book value.

The takeover will help Atlas Financial to expand its commercial automobile insurance services in the New York market and will also add significant infrastructure on the East Coast.

The Transaction in Detail

The deal price will include Atlas Financials preferred shares worth $4 million, with an annual dividend of 4.5% payable both in cash or kind. After the fifth anniversary of issuance, these shares will be convertible to the companys common stock at a strike price of $20 per common share. Based on actual loss development related to Global Libertys pre-acquisition reserves, the final sum of the preferred share will be adjusted.

After the third anniversary of issuance, both the acquirer and the acquiree will hold a mutual right to interchange the shares for cash at a face value, in addition to any accrued interest.

The remaining purchase price is expected to be paid in cash. During the three years following the transactions effective date, earn out to the limit of an additional $1 million will be paid based on the New York businesss underwriting profitability.

The estimated annual pre-tax income generated by the businesses to be acquired is approximately $4 million.

Atlas Financial expects to incur transaction related non-recurring expense of of 57 cents and 68 cents per share in the fourth quarter of 2014 and the first quarter of 2015, respectively.

Rationale

This deal is a strategic one for Atlas Financial, as Global Libertys current premium base, strong heritage in the public auto market and expert team will help the property and casualty insurer to increase its share in the countrys largest light commercial vehicle market.

Atlas Financial also plans to preserve Global Libertys local infrastructure on Long Island and have the site serve as Atlas Financials East Coast regional office.

In order to ensure an easy transition for existing customers and agents of Global Liberty, Atlas Financial will continue to operate Global Libertys public auto insurance business on completion of the deal.

Atlas Financial also plans to keep supplying products under the current brand name.

Zacks Rank

Currently, Atlas Financial holds a Zacks Rank #2 (Buy).

Other Stock Picks

Investors interested in the same industry could consider stocks like Alleghany Corporation (Y – Snapshot Report), Endurance Specialty Holdings Ltd. (ENH – Snapshot Report) and RLI Corp. (RLI – Analyst Report). All these sport a Zacks Rank #1 (Strong Buy).

23 October
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Governor’s office defends education funding; 2nd study says funding’s up, but …

Gov. Rick Snyders office defended his education funding record Thursday morning in the wake of a study that reported funds available to teachers is 9.5 percent below pre-recession levels.

Meanwhile, a second study released Thursday morning stated the raw numbers show education funding has increased since 2010-11. However, most of that money is earmarked for retirement obligations, and discretionary funds available to school districts have decreased, according to the Citizens Research Council.

A study released by the Center on Budget and Policy Priorities reported that discretionary foundation funding for school districts is 9.5 percent below pre-recession levels in Michigan. David Murray, deputy press secretary for Snyder, called the report incomplete and inaccurate.

The group appears to limit its review to the states per-student foundation grant, which is only one piece of the school funding puzzle, Murray said. Gov. Snyder has provided support to schools in a variety of other ways, including money for adopting best practices that benefit districts and families.

The CBPP report focused solely on the foundation grant available to school districts to spend on students. When adjusted for inflation, the study stated the per pupil foundation grant is $615 less than the fiscal year 2008.

Previous story: Study: Michigans K-12 spending 9.5 percent below pre-recession levels

Murray said state support for K-12 districts increased by $1.1 billion during the last four years. He added that Snyders budgets cover a large portion of teacher retirement expenses, protecting teacher pensions and freeing up money to spend in the classroom.

Murray also pointed out the state is spending $7,798 per pupil in 2014-15, the highest level in more than a decade. The report released Thursday morning from the Citizens Research Council agreed that total per pupil funding is growing in Michigan.

But, the CRC says that doesnt mean more funds are available to districts. The report states a district receiving the minimum foundation allowance in fiscal year 2011 received $7,316 and had to use 16 percent of that money for retirement obligations leaving $6,181 for discretionary spending.

In fiscal year 2015, the minimum foundation allowance is $7,251 per pupil and 18 percent of that must be used to satisfy retirement obligations, according to the report. That leaves $5,947 per pupil for discretionary spending $234 per pupil less than in fiscal year 2011.

While the amount of total state per-pupil funding has grown, much of the increase is earmarked for specific purposes (eg, retirement obligations) as opposed to unrestricted state aid, the report stated.

However, Murray said that without the governors help, districts could have been crippled by retirement costs in the last few years.

They were going to be paying a figure equal to 30 percent of their payroll to the retirement fund, Murray said. Reforms passed in 2012 capped the amount districts would contribute to retirement obligations at 20.96 percent.

Murray added, The state relieving the districts of a large portion of these expenses is like someone paying your largest bill. That system was on an unsustainable path.

According to the Citizens Research Council study, total education funding is up from $10.7 billion in fiscal year 2011 to $11.8 billion in fiscal year 2015. Much of that increase follows the trend of rising retirement costs, the study reported.

The amount of money specifically spent on the Michigan Public School Employees Retirement System (MSPERS) went from $155 million in fiscal year 2012 to $883 million in fiscal year 2015.

These retirement payments are mandatory and have to be satisfied one way or another, either through direct state appropriations or via the state aid provided to school districts through their foundation allowance, the report stated.

Other policy changes have also put stress on the School Aid Fund, once solely used for K-12 funding.

The Citizens Research Council found the School aid Fund shouldered a large amount of a $1.8 billion business tax cut as a part of a tax reform packed that took effect in fiscal years 2012 and 2013. In addition, money is now going from the School Aid Fund into the higher education budget, used to fund universities, colleges and community colleges.

According to the study, about $460 million went from the School Aid Fund to higher education in fiscal year 2012. Since then, about $400 million has been transferred from the School Aid Fund to higher education each fiscal year.

This has had the effect of reducing the amount of resources available for K-12 education each year, the study stated.

However, funding doesnt tell the full story of Snyders work on education, Murray said.

Murray pointed to the work the governor has done on district accountability, teacher effectiveness and innovating connections between higher education and businesses to prepare students.

Its important to remember that commitment to schools and teachers must be measured by more than the amount of dollars spent, Murray said.

  • View the full Citizens Report Council report here.
  • View the governors offices full response here.

Kyle Feldscher is the Capitol education and MSU reporter for MLive Media Group. Reach him via email at kylefeldscher@mlive.com or follow him on Twitter at @Kyle_Feldscher. Read more stories here.