Article IV
Sec. 41: The legislature may authorize lotteries and permit the sale of lottery tickets in the manner provided by law. Beginning January 1, 1990, all net revenue and interest earned on net revenue, other than interest used for the payment of prizes, by the state from the operation of a lottery shall be deposited in the state account for education fund established in section 11 of article IX.
Article IX
Sec. 3: The legislature shall provide for the uniform general ad valorem taxation of real and tangible personal property not exempt by law. The legislature shall provide for the determination of true cash value of such property; the proportion of true cash value at which such property shall be uniformly assessed, which shall not, after January 1, 1966, exceed 50 percent; and for a system of equalization of assessments. The legislature may provide for alternative means of taxation of designated real and tangible personal property in lieu of general ad valorem taxation. Every tax other than the general ad valorem property tax shall be uniform upon the class or classes on which it operates.
Beginning in the 1990 calendar year, the legislature shall impose a state general ad valorem property tax at the rate of 14 mills on property classified as business property and 9 mills on property classified as nonbusiness property.
Beginning in the 1990 calendar year, a local school district shall levy a general ad valorem property tax for school operating purposes only as provided in this section.
Except as provided by this section, a local school district may uniformly levy the local foundation millage, as described in this section, without approval of the qualified electors.
If the local school district’s basic per pupil revenue guarantee established for the 1990-91 fiscal year pursuant to section 11 of this article is less than or equal to $3,540.00, the local foundation millage is 8 mills. If the local school district’s basic per pupil revenue guarantee for the 1990-91 fiscal year is greater than $3,540.00, the local foundation millage is the millage required in the 1990 calendar year to yield combined basic state and local per pupil revenues equal to the local school district’s basic per pupil revenue guarantee for the 1990-91 state fiscal year. A local school district shall not levy less than 8 local foundation mills in any calendar year in which the local school district’s basic per pupil revenue guarantee for the state fiscal year beginning in the calendar year is less than the statewide basic per pupil revenue guarantee.
As used in this section and section 11 of this article, “statewide basic per pupil revenue guarantee” means the sum of the basic per pupil grant from the state account for education fund established in section 11 of this article plus the combined state and local per pupil revenue of the first 8 local foundation mills guaranteed under section 11 of this article.
The local foundation millage that may be levied on business property in a local school district shall be reduced by the number of mills by which the sum of the local foundation millage plus the state property tax imposed on business property pursuant to this section exceeds the number of mills the local school district is authorized to levy for operating purposes in 1989. However, this paragraph does not apply to a local school district in which the sum of the local foundation millage plus the state property tax levied on nonbusiness property exceeds the number of mills the local school district is authorized to levy for operating purposes in 1989.
A reduction in the number of local foundation mills levied pursuant to this section shall be applied only to nonbusiness property until the number of mills levied on nonbusiness property does not exceed the number of mills levied on business property, and any additional reduction shall be applied uniformly to the number of mills levied on all classes of property.
As used in this section and sections 5 and 11 of this article, “business property” means property classified as commercial, industrial, utility, or developmental and “nonbusiness property” means property classified as residential, agricultural, or timber cutover.
If approved by a majority of the qualified electors voting on the question, a local school district may levy not more than 4 additional mills for operating purposes in excess of the local foundation millage for a period of not to exceed 20 years at any one time. A local school district shall hold not more than 2 elections in a calendar year concerning an additional millage allowed under this paragraph, regardless of the number of questions presented at each election.
This section shall not preclude the establishment of tax increment financing plans in the manner provided by law.
Sec. 5: The legislature shall provide for the assessment by the state of the property of those public service businesses assessed by the state at the date this constitution becomes effective, and of other property as designated by the legislature, and for the imposition and collection of taxes thereon. Property assessed by the state shall be assessed at the same proportion of its true cash value as the legislature shall specify for property subject to general ad valorem taxation. The rate of taxation on such property shall be the average rate levied upon other business property in this state under the general ad valorem tax law, or, if the legislature provides, the rate of tax applicable to the property of each business enterprise assessed by the state shall be the average rate of ad valorem taxation levied upon other business property in all counties in which any of such property is situated. However, for purposes of the calculation applicable to taxes levied in the 1990 calendar year, the average local school district millage for operating purposes levied on business property is 26.9 mills.
Sec. 6: Except as otherwise provided in this constitution, the total amount of general ad valorem taxes, other than school operating millages, imposed upon real and tangible personal property for all purposes in any one year shall not exceed 15 mills minus the number of mills allocated for local school district operating purposes in 1989 on each dollar of the assessed valuation of property as finally equalized. Under procedures provided by law, which shall guarantee the right of initiative, separate tax limitations for any county and for the townships and for intermediate school districts therein, the aggregate of which shall not exceed 18 mills minus the number of mills allocated for local school district operating purposes in 1989 on each dollar of such valuation, may be adopted and thereafter altered by the vote of a majority of the qualified electors of such county voting thereon, in lieu of the limitation hereinbefore established. These limitations may be increased to an aggregate of not to exceed 50 mills on each dollar of valuation, for a period of not to exceed 20 years at any one time, if approved by a majority of the electors, qualified under section 6 of article II of this constitution, voting on the question. The state property tax millage established in section 3 of this article is not included in calculating the 15-mill or 18-mill limitation but is included in calculating the 50-mill limitation. The number of mills included in the calculation of the 50-mill limitation for business property and nonbusiness property includes the greater of the number of mills levied on that property by the state and the local school district for school operating purposes in the current year or in the 1989 calendar year.
The foregoing limitations shall not apply to taxes imposed for the payment of principal and interest on bonds approved by the electors or other evidences of indebtedness approved by the electors or for the payment of assessments or contract obligations in anticipation of which bonds are issued approved by the electors, which taxes may be imposed without limitation as to rate or amount; or, subject to the provisions of section 25 through 34 of this article, to taxes imposed for any other purpose by any city, village, charter county, charter township, charter authority or other authority, the tax limitations of which are provided by charter or by general law.
In any school district which extends into two or more counties, property taxes at the highest rate available in the county which contains the greatest part of the area of the district may be imposed and collected for school purposes throughout the district.
Sec. 8: Except as provided in this section, the legislature shall not impose a sales tax on retailers at a rate of more than 4% of their gross taxable sales of tangible personal property.
Beginning January 1, 1990, the legislature shall impose the sales tax on retailers at an additional rate of 2% of their gross taxable sales of tangible personal property not exempt by law and the use tax at an additional rate of 2%. The proceeds of the additional 2% rate of the sales and use taxes shall be deposited in the state account for education fund created in section 11 of this article. The allocation of sales tax revenue required or authorized by sections 9 and 10 of this article does not apply to the revenue from the levy of the additional 2% rate of the sales tax.
No sales tax or use tax shall be charged or collected from and after January 1, 1975 on the sale or use of prescription drugs for human use, or on the sale or use of food for human consumption except in the case of prepared food intended for immediate consumption as defined by law.
¶This provision shall not apply to alcoholic beverages.
To compensate units of government other than the state for loss of revenue resulting from repeal of the sales tax on food and prescription drugs, each present allocation of sales tax revenue to such units shall be increased by 1⁄5.Sec. 10:
One-eighthFifteen percent of all taxes imposed on retailers on taxable sales at retail of tangible personal property at a rate of 4% and 1% of the use tax imposed at a rate of 4% shall be used exclusively for assistance to townships, cities and villages, on a population basis as provided by law. In determining population the legislature may exclude any portion of the total number of persons who are wards, patients or convicts in any tax supported institution.Sec. 11: There shall be established a state school aid fund which shall be used exclusively for aid to school districts
, higher educationand school employees’ retirement systems, as provided by law.One-halfSixty percent of all taxes imposed on retailers on taxable sales at retail of tangible personal property at a rate of 4%,and other tax revenues provided by law,shall be dedicated to this fund. Payments from this fund shall be made in full on a scheduled basis, as provided by law. On January 1, 1990, all revenues and obligations of the state school aid fund shall be transferred to the state account for education fund and the state school aid fund shall no longer exist.On January 1, 1990, there is established a state account for education fund that shall be used exclusively for providing aid to local and intermediate school districts as provided in this section; meeting obligations incurred under this section; establishing a countercyclical economic and budget stabilization fund for local school districts as provided by law; assisting, in the manner provided by law, local and intermediate school districts in providing special services required by the United States government or a court of competent jurisdiction; providing assistance to local and intermediate school districts for transportation, special education, and vocational education services; providing reimbursements to tax increment financing authorities to the extent required by this section; and providing reimbursement to local school districts as required by this section.
Beginning January 1, 1990, 60% of all taxes imposed on retailers on taxable sales at retail of tangible personal property at a rate of 4%; the proceeds from the state property tax levied pursuant to section 3 of this article; the proceeds of the additional 2% rate of the sales and use taxes provided for in section 8 of this article; the proceeds from the first 4% of the rate of the excise tax on spirits, as defined by law as of November 7, 1989; the proceeds of the first mill of the excise tax on cigarettes, as defined by law as of November 7, 1989; the portion of the proceeds of the industrial facilities tax, the commercial facilities tax, and the technology park facilities tax required by law to be paid to the state; and 100% of the net revenue and interest earned on net revenue, other than interest used for the payment of prizes, by the state from the operation of a state lottery shall be deposited in the state account for education fund.
To meet obligations incurred under this section, the legislature may by law authorize the state to issue its full faith and credit notes pledging undedicated revenues and revenues dedicated to the state account for education fund to be received within the same fiscal year for the repayment of the notes. The indebtedness in any fiscal year shall not exceed 25% of the revenues dedicated to the state account for education fund received by the state during the preceding fiscal year, and the debts shall be repaid at the time the revenues pledged are received, but not later than the end of the same fiscal year.
The legislature shall provide by law that the reductions in revenues resulting from the decrease in school operating millage required by section 3 of this article shall not impair any tax increment financing contractual obligation, as defined by law, entered into or incurred before June 1, 1989; any tax increment financing obligation, as defined by law, issued after June 1, 1989 in anticipation of those revenues, if an agreement was entered into before June 1, 1989 by a municipality or authority providing for interim financing to be refunded by those tax increment financing obligations; or any tax increment financing contractual obligation incurred by or on behalf of a municipality or authority before September 1, 1989, if a tax increment plan providing for the issuance of those obligations in anticipation of those revenues was adopted before June 1, 1989. Nothing in this section shall preclude the capture and use by tax increment financing plans of the revenue derived from the property tax levied by the state pursuant to section 3 of this article.
The state shall reimburse each local district for the revenue not received because of the reduction in the number of local foundation mills that may be levied on business property, as required by section 3 of this article. The reimbursement to each local school district shall equal the product of the district’s 1990 state equalized valuation of business property multiplied by the number of local foundation mills levied only on nonbusiness property in the calendar year ending in the state fiscal year for which reimbursement occurs.
In addition to the funding provided to the state account for education fund under this section, for state fiscal years beginning after September 30, 1989, 25% of the proceeds of the sales tax imposed at a rate of 4% on tangible personal property that is not described in section 9 of this article and 54% of the proceeds of the use tax imposed at a rate of 4% shall be appropriated each year for K-12 education, as provided by law.
The legislature may provide by law for the revision or elimination of any of the requirements of the following paragraphs of this section. A law enacted pursuant to this paragraph or any amendment to a law enacted pursuant to this paragraph shall require the approval of 2⁄3 of the members elected to and serving in each house of the legislature.
Beginning with the 1990-91 state fiscal year, the legislature shall establish a specific local school district basic per pupil revenue guarantee for each local school district pursuant to this section. For a local school district in which the basic per pupil revenue for operating purposes for the 1989-90 state fiscal year was $3,190.00 or less, the local school district basic per pupil revenue guarantee shall provide a $350.00 increase in basic per pupil revenue for operating purposes for the 1990-91 state fiscal year. For a local school district in which the basic per pupil revenue for operating purposes for the 1989-90 state fiscal year was greater than $3,190.00, the increase in per pupil revenue for operating purposes for the 1990-91 state fiscal year shall not be less than $250.00 or more than $350.00. As used in this section, “basic per pupil revenues for operating purposes for the 1989-90 state fiscal year” means the greater of the local school district’s gross allowance established for the 1989-90 state fiscal year as certified by the department of education and as adjusted by the department of education to include amounts expended for operating purposes in the local school district’s 1989-90 fiscal year from any unexpended fund balance from a prior fiscal year or the product of the per pupil 1989 state equalized valuation of the district reduced by the amount of any captured assessed valuation and the millage used to compute the gross allowance.
For state fiscal years beginning after September 30, 1991, the local school district’s basic per pupil revenue guarantee is the sum of the combined state and local per pupil revenue from its local foundation millage plus the basic grant payable under this section. However, for a state fiscal year in which a local school district’s basic per pupil revenue guarantee in the previous fiscal year was less than the statewide basic per pupil revenue guarantee in that previous fiscal year, the increase in the local school district’s basic per pupil revenue guarantee for the state fiscal year shall not exceed $300.00.
The state account for education fund shall pay a basic grant to each local school district. For the 1990-91 state fiscal year, the basic grant shall be the lesser of $2,700.00 per pupil or the amount necessary to assure the local school district its local school district basic per pupil revenue guarantee if the local school district levies not less than its local foundation millage. However, the grant shall not be reduced below $2,700.00 per pupil for any local school district in which the reduction would result in a local foundation millage greater than 8 mills. Beginning in the 1991-92 state fiscal year, the basic grant shall be $2,700.00, as adjusted under this section, or the amount necessary to assure a local school district to which the $300.00 limitation applies its local school district basic per pupil revenue guarantee if the district levies not less than its local foundation millage.
Beginning in the 1990-91 state fiscal year, the state account for education fund shall supplement the revenue generated by a levy of the first 8 mills of local foundation millage in any local school district in which the state equalized valuation per pupil is less than $105,000.00, and shall supplement additional local foundation mills in a local school district in which the state equalized valuation per pupil is less than $85,000.00 per mill. The sum of the supplement and the actual yield shall equal the revenue that would have been produced if the state equalized valuation per pupil in the district had been $105,000.00 and $85,000.00, respectively.
The state account for education fund shall supplement the revenue generated by a levy of up to 4 additional mills approved by the qualified electors in any local school district in which the state equalized valuation per pupil is less than the state average state equalized valuation per pupil, determined without regard to district valuation, each year the extra voted mills are levied. The supplement and the actual yield shall equal the revenue that would have been produced if the state equalized valuation per pupil had been equal to the state average state equalized valuation per pupil.
Total state funding for special education for the 1990-91 state fiscal year; total state funding to assist local and intermediate school districts to provide transportation for students for the 1990-91 state fiscal year; total state funding for vocational education for the 1990-91 state fiscal year; and total state funding for intermediate school districts for the 1990-91 state fiscal year shall be, respectively, 10% higher than total state funding in the 1989-90 state fiscal year.
For state fiscal years beginning after September 30, 1991, the $2,700.00 basic grant described in this section; the $105,000.00 and $85,000.00 state equalized valuation amounts; and the total state appropriation for the general funding membership formula for intermediate school districts shall be adjusted, as provided by law, by the same percentage as the percentage increase or decrease in per pupil revenues of the state account for education fund. A law enacted to implement this paragraph shall provide for the uniform adjustment of percentage changes to reflect amounts deposited in or expended from the countercyclical economic budget stabilization fund provided for in this section; supplements authorized by this section for additional millages; payments of notes issued under this section; and any other payments required to be made or permitted under this section.
Beginning in 1995 and every 5 years thereafter, the state board of education shall make recommendations to the state legislature regarding the revision of methods used for providing improved school financing, equity in school financing, and quality programs, and shall prepare and submit to the legislature a 5-year plan for improving school financing, providing equity in school financing, and providing quality programs.
Sec. 14: To meet obligations incurred pursuant to appropriations for any fiscal year, the legislature may by law authorize the state to issue its full faith and credit notes in which case it shall pledge undedicated revenues to be received within the same fiscal year for the repayment thereof. Such indebtedness in any fiscal year shall not exceed 15 percent of undedicated revenues received by the state during the preceding fiscal year and such debts shall be repaid at the time the revenues so pledged are received, but not later than the end of the same fiscal year. This section does not apply to indebtedness incurred by the state under section 11 of this article.
Sec. 36: An amount equal to the sum of the reductions in local school district property tax revenues in each local school district shall be excluded from the calculations required by sections 26, 28, and 30 of this article. As used in this section, “reduction in local school district property tax revenues” means the product of the difference, if greater than zero, between the millage levied by the local school district for operating purposes in 1989 and that district’s local foundation millage described in section 3 of this article multiplied by the state equalized valuation of the local school district for the calendar year ending in the state fiscal year for which the calculations required by sections 26, 28, and 30 are made. The local foundation millages determined under section 3 of this article are excluded from the provisions of section 31 of this article.
