School boards around the state are voicing opposition to Gov. Rick Snyder’s proposal to use “School Aid Fund” revenue to fund community college and higher education budgets. Some Democrats want to amend the Michigan Constitution to prevent this so-called “fund raid,” and the Republican-controlled Senate has passed budgets that use less SAF money for colleges and universities than the governor proposes.
Although only once before has SAF money been used for colleges, no current law prohibits doing so again, K-12 spending-interest arguments notwithstanding. That one time was just last year when Gov. Jennifer Granholm used $195 million in SAF money for community colleges.
In addition, for many years SAF money has been spent on other non-K-12 education items. For example, more than $130 million dollars from the fund was earmarked last year for things like pre-kindergarten programs, adult education and the Michigan state library. Many school districts themselves spend part of their SAF money on higher education: Last year, K-12 districts sent more than $11 million to universities and community colleges for dual-enrolled students.
Opponents of the governor’s plan claim that using SAF money to cover part of the colleges and universities budgets breaks the “promise” established by Proposal A. They contend that because the Proposal A ballot language did not mention higher education, SAF revenue should only be sent to K-12 school districts.
The problem with that argument is that Proposal A’s ballot language didn’t mention the SAF at all. It did allocate an increase in the state sales tax to “schools,” but that is just one of several revenue sources that currently flow into the SAF, and none of those other sources are constitutionally prohibited from being used for colleges and universities.
As for what voters intended back in 1994, most regarded the primary purpose of Proposal A as capping out of control property tax increases, which not surprisingly had huge popular support. Accomplishing this required creating a new school funding mechanism, but other than a portion of the sales tax revenue, this did not mean carving out a sacrosanct and eternal revenue stream exclusively for K-12 schools.
Indeed, the SAF existed long before by Proposal A. It was codified in the Constitution of 1963, which states, “There shall be established a state school aid fund which shall be used exclusively for aid to school districts, higher education, and school employees’ retirement systems, as provided by law” (Article IX, Section 11).
Given that under Gov. Snyder’s budget proposal schools get far more funding than the amount provided by the 1994 Proposal A sales tax increase, the argument that the state cannot use any SAF money for colleges and universities is clearly incorrect.
The public school establishment also argues that it’s unfair for community colleges and universities to get SAF money because the former already have the power to impose property taxes for operating expenses, and the latter can always raise tuition — options that K-12 school districts do not have. However, school districts can turn over some services to intermediate school districts, which are allowed to impose property taxes for general operating revenues. ISDs can also levy “regional enhancement” millages that are shared by their regular school districts.
Ironically, after years of complaining that the SAF was “underfunded” and that Proposal A didn’t work, suddenly the public school establishment claims that it is “fully funded,” and is clinging tightly to the newly discovered “covenant” of Proposal A. Citizens (and courts) should look with great skepticism on arguments marshaled in support of this new and self-serving faith.