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