The system that finances Michigan’s schools from kindergarten through 12th grade is a perennial topic of conversation among policymakers, parents, taxpayers and voters. A constructive discussion of this issue, however, requires a sound knowledge of the financial workings of Michigan’s elementary and secondary school system.
This knowledge is precisely what the authors have attempted to provide. While the Mackinac Center for Public Policy has developed numerous policy recommendations over the years, this primer is exclusively informational. The primer does not make recommendations or adopt positions on questions of school finance, governance, budgeting or management.
Instead, the primer addresses the following:
how revenues are raised for Michigan’s elementary and secondary public school system;
how money is distributed to education programs and school districts once it is collected by various taxing authorities; and
how districts budget monies to be spent on the various activities involved in operating schools and other educational programming.
For instance, we will describe what a sinking fund millage is, the statutory limits on its rate, where the revenues from such millages go when they are collected and how a school district is permitted to spend the funds. We will not discuss, however, whether residents should vote for a sinking fund millage. The simple but important purpose of this primer is to explain to Michigan policymakers, school officials, media and residents how the system works. Understanding the status quo, after all, is the proper starting place for any meaningful attempt at improvement.
Still, a reasonable reader might ask, If this book is a "primer," why is it so long? The authors have often asked themselves this question too, but the answer is straightforward: Michigan school finance is complex and minutely defined. About 376 tightly formatted pages of the Michigan Compiled Laws are needed to reproduce the various Michigan statutes affecting the collection, distribution and expenditure of money in Michigan’s school system. Any primer on this subject is necessarily dense with detail.
This book is arranged in four sections. The first — and the shortest — is "A Brief Overview of the Structure of Michigan’s Public School System," which defines a few basic terms and sketches the main local, state and federal agencies involved in financing Michigan’s public school system. This overview should help readers unfamiliar with Michigan’s public school structure navigate the remainder of the book.
The second, third and fourth sections are considerably longer than the first and cover the three areas outlined above: tax revenues, distribution of revenues and financial management of those revenues by school districts. Three appendices to the book contain a table of federal spending on Michigan’s public schools, a discussion of the landmark "Durant" lawsuits and a brief introduction to a new electronic Web module of Michigan school data.
One final caveat: This primer is current at the time of its publication. We have based our findings on a wide range of legal documents: the Michigan Constitution and Michigan Compiled Laws; reports from Michigan government agencies, such as the Department of Education and the Department of Treasury; interviews with state and school district personnel who administer the details of the system on a daily basis; and various other sources. The reader should be aware, however, that statutes are frequently amended, that figures are revised as they are audited and that new information regularly becomes available as an agency’s reporting schedule is completed.
While we have striven to incorporate the most current data and explanations, minor discrepancies with post-publication data may sometimes crop up. Readers curious about any apparent inconsistencies between recent data and the material in this book may want to visit the Michigan Legislature’s Web site (www.legislature.mi.gov) to see if the amendatory history of a statute indicates a recent change. Recent legislative proposals and changes can also be researched by visiting www.MichiganVotes.org.