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www.mybaycity.com January 20, 2009
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Bay Area Community Foundation Gets McGillivray $1.2 Million Education Gift

Education "Promise Zones" May Be Created Under New State Legislation

January 20, 2009       Leave a Comment
By: Dave Rogers

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Ronald K. and Greta A. McGillivray
 

The Bay Area Community Foundation has received a $1.2 million gift from the Ronald K. and Greta A. McGillivray Estate that will help community leaders and Bay City Public Schools fund a pilot program focused on higher education in Bay County.

"Bay Commitment is in the second year of the pilot program." said BACF president and CEO Eileen Curtis. "Our goal is to determine best practices AND the funding required for a sustainable program. Promise Zones are an interesting concept."

Up to 10 "Promise Zones", designed to send students in high-poverty areas to college, could be created under legislation recently signed by Gov. Jennifer Granholm.

Mr. McGillivray, longtime city planner, was active in development of Veterans Memorial Park and construction of Veterans, Independence and Liberty bridges. Mrs. McGillivray was active in the YWCA and church groups. In honor of his wife, Mr. McGillivray established the Ronald K. McGillivray Saginaw River Improvement Fund and the Ronald K. & Greta A. McGillivray Scholarship Funds at BACF.

"Mr. and Mrs. McGillivray's belief in higher education provided the basis for funding scholarships for young people in the community," said Mrs. Curtis. "A portion of the McGillivray donation will support the Bay Commitment Scholarship program available for students who will be the first generation in their family to obtain a college degree and plan to attend either Delta College or Saginaw Valley State University.

Approximately $4,800 per child in a zone would be required to start the program. (The amount raised would have to total enough to send all eligible students in the zone to community college for two years). Then, local officials could capture half the annual growth in state education tax revenue generated by any increase in property values in the zone.

The program is modeled after the privately funded Kalamazoo Promise, which offers free tuition to Kalamazoo Public Schools graduates to attend a Michigan public university or community college.

"We want to make sure that all children have access to higher learning and this is a creative financing way we can ensure that the business community partners with the education community to provide opportunities," Granholm said.

Eligible students would have to live within the zone but do not have to attend a public school.

As real estate values begin to grow again, the state's financial share in the program will increase, said policy advisor Chuck Wilbur. Legislative estimates place the eventual state cost at nearly $16 million annually.

The Kalamazoo Promise is scholarship program that provides Kalamazoo Public School (KPS) graduates with the opportunity to attend a Michigan public post-secondary institution with up to a 100% scholarship (on a sliding scale based on years of KPS attendance). It is a 501 (c)(3) non-profit corporation funded entirely by a small group of anonymous donors (see OLR report 2007-R-0527). During her 2007 State of the State address, Michigan Governor Jennifer Granholm introduced the idea of implementing a similar program statewide and legislation was subsequently introduced in the House and Senate.

The House bill, HB 5375, was introduced on October 25, 2007 by Representative Tim Melton, House Education Committee Chair. The bill would allow the Michigan Department of Treasury to approve a request by the governing bodies of high poverty communities (i. e. , those with a higher percentage of poor students than the state average) to establish and manage Promise Zones.

If approved, Rep. Melton said the governing bodies would create a Promise Zone Authority to produce "Promise Zone Development Plans" that would ensure financial assistance for postsecondary education to public and private high school graduates who live and go to school within the zone. The authorities could structure the program so the scholarships could be restricted based on grade point average or years of residence in the zone.

During the first two years, the Promise Zones would have to raise funds through private donations. Subsequently, they would also be eligible to receive public funds through an arrangement similar to tax increment financing primarily used for development.

Currently, 6 mills are levied on all property for the State Education Tax (SET). Under the bill, there would be a capture of a percentage of the increase in the SET revenues to continue the program. The idea is that the Promise Zones would create economic development. When property values increase, the SET revenue would rise and the Promise Zones would receive half of the increase in revenue. The Michigan Department of Treasury would oversee the program.

According to the Michigan House Fiscal Agency's legislative analysis, opponents of the bill expressed concern with the high level of community fundraising necessary to sustain the program. The House passed the bill on December 13, 2007, by a vote of 71 to 34. The House referred the bill to the Senate on January 9, 2008. The Senate has not acted on the bill.###

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Dave Rogers

Dave Rogers is a former editorial writer for the Bay City Times and a widely read,
respected journalist/writer in and around Bay City.
(Contact Dave Via Email at carraroe@aol.com)

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