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The debate over which school districts have more money, and therefore, which students are better prepared for college and the world beyond, has been raging for decades. It was supposed to have been settled in 1994, when Michigan enacted new legislation to end the funding of local school districts completely from property tax revenues, instead transferring the funding to the state, through legislation called Proposal A, which set up a per pupil amount for both wealthier districts and poorer districts. The goal, over the last 22 years, was to erase the deficit between the two, creating greater equality in the state for all students.
That goal has largely been reached, with the difference in the per pupil amount, called the foundation formula, only a few hundred dollars a student apart, rather than thousands of dollars apart, as it was years ago. Yet, disparities in the quality of education continue to exist, including in some districts which receive higher per pupil amounts. Why? The real culprit, education experts on all sides of the discussion concur, is enrollment and its decline, and the inability of districts to recover from that spiral.
The goal of Proposal A, which took effect in 1994, was two-fold: to cut and cap local property tax burdens, and to gradually reduce the disparities in school funding between local districts across Michigan. It also eliminated 64 percent, or $6.4 billion of the $10 billion of total K-12 school funding, beginning with the 1994-1995 school year.
Prior to the enactment of Proposal A, Michigan had a long history of leaving education in the hands of local communities, from funding to major decisions regarding curriculum. Schools in Michigan were completely funded by setting millage rates for property taxes, which provided most of the funding for local school districts. But by the early 1990s, taxpayers across the state were fed up with high taxes, and demanded property tax relief. Approximately a dozen ballot proposals to improve the system had failed over several years, and residents continued to be upset about high taxes, with school districts across the state having varied funding levels based on their communities' level of affluence and willingness to support education.
Under Governor John Engler, the state legislature passed and Engler signed into law Proposal A in July 1993, which eliminated all property tax paid for schools, transferring control to the state. Voters followed up in March 1994 by approving the new system for funding schools, with 69 percent of voters approving, leading to three key changes. First, Proposal A eliminated using local property taxes as the source of school funding, creating a new state education tax. From that day forward, school districts received their funding as per pupil payments from the state....continued on page 2