Public Education Finance Act

Any Time, Any Place, Any Way, Any Pace

School Aid Act History and Shortcomings

  • The statutory structure for financing Michigan’s system of free public and elementary schools is based on a school district model that was replaced by the voters and the legislature.
  • For over 100 years, Michigan relied primarily on geographically based school districts and locally raised property taxes for public schools.
  • Since 1994, however, with the adoption of Proposal A and Michigan’s constitutionally guaranteed per pupil allowance for school operating, parents and students have had broader ability to select from available public options that meet the student’s educational and family needs and objectives.
  • Now, the present system of public education includes both local property taxes and a wide range of state taxes, including a state real estate tax, dedicated sales taxes, lottery revenue and other state taxes to pay for a wide range of public schools including district schools, public school academies, urban high school academies, schools of excellence, cyber schools, and dual enrollment of high school students in college classes.
  • The State School Aid Act of 1979 (“Act”) that annually appropriates $14+ billion plus for public schools, is a unique statute in that it serves as both a substantive law supplementing the Revised School Code and an annual appropriations act that must be amended each year to appropriate funds for K-12 education.
  • The Act is exceptionally opaque and, while it serves the interests of legislators and representatives of education interests who control the education system, is generally inaccessible to the general public.
  • As presently written, the Act makes it very difficult to implement new ideas and new forms of education, including the following proposals put forward by Governor Rick Snyder:
    • Greater choice for students and parents.
    • A state foundation allowance should not be tied exclusively to the school district.
    • Funding the follows the student.
    • Early college attendance.
    • Total on-line learning.
    • Experiential learning models.
    • Mandatory “schools of choice,” i.e., inter-district choice.
    • Education system that offers unfettered flexibility and adaptability for student learning models and styles.
    • Proficiency-based funding rather than “seat time” requirements.
    • A system that is more cost-efficient, competitive, innovative and effective in motivating student achievement.
    • A system that embraces innovative learning tools.
    • Changing from a static approach to education delivery to one responsive to individual learning styles.
  • A fundamental anachronism in the present State School Aid Act is that it is structured around the concept of “membership” in a local school district, whereby a student is essentially treated as the property (and responsibility) of the school district because of the school aid funds that flow to the district through enrollment of pupils in membership. Any other form of public education is treated as an exception, frequently requiring approval of the school district of residence.
  • A modern public education law would be based primarily on the interests of the student, not the particular school or schools he or she attends. A 21st Century public education system would recognize the diversity of competing schools and educational approaches necessary to meet the needs of a diverse population.
  • And a school financing system that is more cost-efficient, competitive, innovative and effective in motivating student achievement would be transparent and understandable to the consumers of education services – parents and students.
  • The Michigan Education Finance Project is a 6-month intensive project to draft and submit for the Governor’s consideration a new, modern Michigan Public Education Finance Act of 2013 to replace the 32-year old State School Aid Act of 1979.
  • By proposing a new school financing law for fiscal year 2013-2014, effective October 1, 2013, the structure and the financing of Michigan’s public education system can be modernized to be more responsive to the educational and economic challenges the state faces.
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