State and local property taxes for education are typically collected by local government, but they must then be distributed to state or local school authorities according to procedures prescribed by state law. Federal taxes are collected by the federal government, and federal revenues for Michigan schools are allocated by the U.S. Department of Education and other federal departments to Michigan’s school aid fund and distributed according to state and federal laws. Local property taxes for education, such as school district capital levies and hold-harmless millages, are collected by local government, usually cities or townships, and then transferred to a school district’s treasurer. The statewide property tax for education (i.e., the state education tax), is collected by local government, usually cities and townships,[lxxii] and then transferred to the county treasurer. The county treasurer then sends the revenues to the state treasurer, who deposits the revenue in the school aid fund.
All other state taxes that state law dedicates to the state’s school aid fund are deposited in that fund as they are collected.
[lxxii] This process is described in MCL § 211.905(2), but MCL § 211.905(4) contains a provision that allows a school district to elect to collect the tax. A city or township may also decline to collect the state education tax (MCL § 211.905b(2)), in which case the county treasurer would collect the tax and impose an administrative fee. The county treasurer may refuse to collect the tax in lieu of the city or township (MCL § 211.905b(4), and in that case, the state treasurer would collect the tax and impose an administrative fee (MCL § 211.905b(5)).