Recently, 12 former and current legislators who were involved in crafting the 1994 Proposal A school finance initiative were invited to review its results and recommend revisions. Most of the group’s proposals were variations on the predictable and politically unlikely "send more money" theme, an idea they claim would allow for a "more successful pursuit of excellence," but for which they offered no concrete, verifiable evidence. In one instance, however, they offered some practical wisdom that current policymakers should take to heart.
One of the promises of Proposal A was to vastly reduce the number of so-called "categorical" grants, in which the state provides money to school districts strictly for activities in a specific "category," and replace most of them with a single "no strings attached" foundation grant based solely on the number of pupils in the district. Before Proposal A there were 31 such funding categories and they accounted for 44 percent of state support of public education. These programs had many strings attached, making them hard for local schools to navigate and the state to administer. After Proposal A the number of categoricals was reduced to 24 programs accounting for 15 percent of (greatly increased) state funding in the 1994-1995 school year, and it fell to just 15 programs in 1996. Since then the number has risen again, reaching 22 programs in 2003-2004.
A 1999 Citizens Research Council recommendation, in fact, called for the elimination of Intermediate School Districts, saying that before Proposal A, ISDs helped local school districts "navigate the labyrinth of categorical program paperwork," but that the reduction of categoricals eliminated one justification for keeping ISDs.
The rap against categoricals is that they represent an effort by a centralized bureaucracy to micromanage local schools. Or, that they reflect political considerations in the legislature, rather than educational realities in the classrooms. On the other side, some "categoricals" are justified by the fact that eligibility for them varies widely across school districts with different socio-economic characteristics. Examples include funding for "at risk" pupils (defined somewhat arbitrarily on the basis of how many students in school qualify for free school lunches on the basis of family income), and for "school readiness" programs for educationally disadvantaged four-year-olds. Another huge categorical is funding for special education, which proponents believe would receive short-shrift in some school districts if its funding was not in a separate category restricted for this purpose.
A Brief History
-Passed with more than a 2-1 margin in March 1994.
-Significantly restructured property taxes and school funding.
-It increased the sales tax from 4 to 6 percent, and capped annual home assessment increases at 5 percent or the rate of inflation, whichever is less.
-Under Proposal A, the amount of state and local dollars spent on public education has increased from $9.3 billion to $14.5 billion, while the minimum per-pupil foundation allowance has grown from $4,200 in 1995 to $6,875 today.
Nevertheless, there is a general consensus that the number of categoricals should be kept to a minimum, so that decisions about how to allocate finite resources are made by educators "on the ground" in school districts rather than bureaucrats and politicians in Lansing. Cutting back the growth of categoricals is one recommendation from the Proposal A review group deserving support.
Jack McHugh is a legislative analyst for the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich.