Amendment’s Effects on Higher Ed are Uncertain

Proposal 1 may offer more leeway in funding universities than intended

Most of the focus on Proposal 1 has been directed to its changes in the state’s fiscal policies, rather than a close look at its proposed constitutional changes. One issue demands further attention since its effects are unclear.

The constitutional amendments allow for a higher sales tax, earmark more money to the School Aid Fund and exempt road vehicle fuel from sales taxes. But they also remove “higher education” from the list of acceptable uses of the SAF while adding community colleges and some programs to the acceptable uses of the that fund. Here is this section of the proposed amendment:

There shall be established a state school aid fund which shall be used exclusively for aid to school districts, higher education, PUBLIC COMMUNITY COLLEGES, PUBLIC CAREER AND TECHNICAL EDUCATION PROGRAMS, SCHOLARSHIPS FOR STUDENTS ATTENDING EITHER PUBLIC COMMUNITY COLLEGES OR PUBLIC CAREER AND TECHNICAL EDUCATION PROGRAMS, and school employees’ retirement systems, as provided by law.

As I mentioned in my brief, this has some fiscal consequences. The state has been spending $200 million in school aid fund money in the state higher education budget and this would likely have to stop if the amendment is approved. There are small amounts of general fund money in the state’s school aid budget that may mitigate this new prohibition.

Stay Engaged

Receive our weekly emails!

Future policymakers could still devote money from the SAF to the state’s public universities through possible loopholes in the language.

A number of state universities still participate in the school employees’ retirement system, which remains an acceptable place to devote SAF dollars. The state could contribute to these universities by directly paying for the retirement contributions of those participating institutions.

Policymakers could even expand on this practice by allowing university employees to participate in the school employees’ retirement system. Or it could create a new “school employees’ retirement system” with state university participation and provide SAF money for participating employers.

This amendment also changes this section of the constitution from naming the kinds of institutions that can receive SAF money to naming uses for the money. The state’s public universities could receive SAF money for scholarships for students in career and technical education programs, or they could set up career and technical education programs themselves.

Public universities may even make the case that they are fundamentally in the business of providing career and technical education. After all, while most universities remain liberal arts institutions, career preparation remains their primary selling point to both prospective students and to the Legislature when asking for state money.

Judicial interpretation of our state constitution is subject to different standards than those used for regular statutes. The justices would rely more on a normal citizen’s interpretation of the language rather than the often arcane interplay of existing statutes. On that standard, there seems to be more leeway for funding the state’s public universities than policymakers may have intended.


Related Articles:

Higher Education Subsidies: Is College More ‘Affordable’ for Those Who Don’t Go?

‘Fact Check’ on Higher Education Piece Falls Flat

Michigan Universities Doing Just Fine

The Evidence is Clear: State Spending on Colleges is Wasteful

New Study Calls for More Spending to Provide Nothing

Stopping University Tuition Hikes Would Cost Nearly $3 Billion