Monday, June 10, 2013

What is "Proposal A," and how does it effect my school?

As we bring more folks into the public school finance discussion, we hear the same question over and over: "What is Proposal A?"
Before 1993, Michigan schools were largely funded by local property taxes.  Individual school districts were funded much the same way other local governmental entities are - local voters were able to decide on millages for their schools.  Districts who wanted to invest in their schools were able to put the questions to their citizens.  There were also discrepancies in funding between districts during this period.  Wealthier areas tended to have better funded schools. 

In 1993 the Engler administration pursued and achieved Public Act 145 of 1993 (145 PA 1993) which repealed property taxes as the primary funding source for K-12 education.  145 PA 1993 eliminated approximately $7 billion in school operating funds and did not provide any alternative funding source.
In 1994 voters were given two choices of how to fund schools, but both choices accomplished this through state taxes.  Voters were asked to increase the sales tax rate (Proposal A) or increase the income tax rate if Proposal A failed (Statutory Plan).  Voters chose Proposal A, but either way, there was no longer a choice to fund the operating budget of schools through local choices.  Every district in Michigan would now be dependent on a yearly per pupil allowance (the foundation allowance) from the state, and would be prohibited from raising more money for operating expenses locally.  School Finance Reform in Michigan, Proposal A: Retrospective. This effectively capped what districts could spend on teacher salaries, crayons, toilet paper, and everything else considered an operating expense.

School districts can still pay for some things with millages such as building construction and technology.  But, because of Proposal A, school districts cannot raise more money locally to make up deficits, shrink class sizes, or add programming.  All of this must be paid for by the per pupil allowance which comes from the state. 

Initially, the per pupil allowance from the state to districts, the foundation allowance, kept pace with inflation.  However, since 2002 Michigan has dramatically defunded K-12 education.

This is why the per pupil funding from the state is such a critical issue to every public school in Michigan, and why getting funding for your school is a statewide issue.


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