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
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
Jack McHugh is a legislative analyst for the Mackinac Center for
Public Policy, a research and educational institute headquartered in Midland,