The Problems with Proposition A:

Let’s Make Michigan Schools Great Again

Elizabeth Tallent
Oakland University Education Specialist Program
EA8840 School Business Management
Dr. C. Suzanne Klein
February 10, 2020
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Abstract

In March of 1994, Governor John Engler and Michigan Senate lawmakers passed an

unprecedented new law to fund Michigan schools called Proposition A. This law ended funding

of Michigan schools based on property taxes and currently funds schools from up to eight

different revenue sources, all of which fluctuate year to year depending on the strength of the

economy. This paper outlines the downfall of Proposition A, and the issues Michigan schools

face in funding programs with a system that does not consistently or reliably fund schools.

Proposition A also did little to bridge the gap of funding between low income and high income

districts and providing equity and adequacy to students throughout Michigan. Michigan prisons

are increasing in funding at a faster rates then schools. In addition, a proposed solution to the

school funding problem by the School Research Collaborative group in Michigan outlines a plan

that is equitable and adequate for all Michigan students.

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Adequately and equitably funding schools in the 21st century is a complex and

contentious issue. Proposition A currently funds schools from up to eight different revenue

sources, all of which fluctuate year to year depending on the strength of the economy. These

sources include 2% of the 6% Sales Tax Revenue, Income Tax 22%, State Education Tax,

Lottery Transfer 7%, Use Tax 4%, Tobacco Tax 3%, Real Estate Transfer 2%, and other sources

comprising an additional 2% of the School Aid Fund (SAF) (Price, 2018, appendix 1). These

fluctuations greatly affect a school’s ability to prepare and provide consistent educational

standards and practices. In addition, as the population decreases or when students leave the

district, the per pupil dollars decrease in kind, thus leaving schools with the same educational

needs and less funding to meet those needs. “After losing small percentages of students,

schools find it difficult to quickly cut budgets or staff because when a district loses a small

percentage of students (and the revenue they bring), that doesn’t mean costs to run the

district decline” (The Center for Michigan, 2014, para. 14).

Since Proposition A became law in March of 1994, schools must make financial

decisions based on the number of pupils that may attend school, this may or may not be enough

funding to provide a quality education. This constant increasing and decreasing of dollars year to

year, takes away resources and could account for low-test scores and reading levels. Schools

want to make changes to increase productivity and learning, but without consistent funding, it is

difficult to maintain programs. For example, lowering classroom’s student to teacher ratios and

providing opportunities for teacher training are great ways to provide more individualized pupil

care, and tools and resources for teachers. These were positive reinforcements for teachers to

provide quality instruction. “Michigan’s extraordinary slide in K-12 education funding is all the

more striking because it occurred simultaneously with the state’s establishment of ambitious
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curricular and achievement standards for children” (Arsen, Delpier, Nagel, 2019). Yet, when

funding fluctuates, schools must make hard decisions about how to meet their budgets, class

sizes increase and the opportunities for innovation and programs become too costly and time

consuming. “Parents, educators and policymakers want some assurance that sufficient aggregate

revenue is available for public schools as the economy experiences periods of growth and

recession” (Addonizio, Kearney, 2002, p. 39).

Prior to Proposal A, school funding was derived primarily through property taxes. The

Kalkaska school district ran out of money two months before the end of the year, and because of

complaints about high taxes; Governor John Engler signed a bill into law removing property tax

funding for Michigan public schools. This historical moment happened when Engler proposed a

20% property tax cut, and to prove a point, Debbie Stabenow proposed a 100% cut of property

taxes. According to University of Michigan researchers in the Journal of Policy Analysis and

Management in 1997, Paul N. Courant and Susanna Loeb wrote:

At the time, Stabenow’s move was widely interpreted as an attempt on her part to

show how silly it was to cut taxes without specifying new revenues for the

schools. If that was its purpose, it backfired. The Senate passed the amended bill

the same day, the House followed a day later, and the governor immediately

announced that he would sign the bill. With little debate the state had eliminated

$6.5 billion in school taxes for the 1994-1995 school year. Absent further action,

there would be no way to finance the public schools (Dwyer, para.14).

The bill passed in July of 1993, and therefore, Michigan legislators had to come up with an

alternate plan to fund schools (The Center for Michigan, 2014, para. 2). Knowing that legislators

had devised a plan for the 1994-1995 school year under duress, now that the primary funding of
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schools (property taxes) was no longer available, may be the reason why Proposition A is failing

to adequately and equitably fund Michigan schools today. “In other words, in the span of one

day, Michigan leaders had decided to completely defund public schools” (Dwyer, 2014).

Allocation of money for schools (see above stated revenues) without allowances to

recover for economic downturns and subsequent lost revenue from declining student enrollment

were just a few areas not accounted for in the state’s plan. Proposal A’s roller coaster method of

funding, which is supplemented by leveraging a millage above the allotted 6 mils on homestead

property, bond initiatives, and sinking funds (all with voter approval), does not meet the standard

of adequacy or of bridging the equity gap of funding from district to district. Districts in low-

income areas will not vote to approve building funds, a millage, bonds, and/or sinking funds,

because they cannot afford to pay higher taxes, and if they do approve bond loans, districts

struggle to pay back these debts. “…once a district has taken out a school bond, it must pay it

back, even if the community falls on hard times. …Instead, school officials have to find the

dollars somewhere, either by extracting it from local taxpayers or taking away resources from

kids” (Richmond, 2019). Yet, districts from wealthy neighborhoods, with whom have kept their

higher per pupil rates due to harmless hold, have the financial capability to fund their schools

from the upkeep of their buildings, to their staffing and resources.

Initially, for the first 10 years of Proposition A, Engler accomplished increased funding

for schools in poorer districts, and the per pupil sum somewhat narrowed the gap between low

income and high-income districts. However, with inflation, decreasing enrollment, and budget

needs for special education, the gap between poorer and richer districts remains distinctly apart.

Yet, Proposition A also accomplished a way to open the door for charter schools to become part

of the education landscape. “Engler’s team scrambled to replace the lost school revenue with a
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new proposal to voters, they used the crisis to create school choice in Michigan and lay the

groundwork for Michigan’s charter school law” (Dwyer, 2014).

The reasoning behind schools of choice was to make schools more competitive and give

parents options outside of their school districts. Yet, placing education in the hands of

companies for profit has not improved the quality of education in Michigan. According to Arjay,

Tomlinson & Tokarz, 2019, “It was also theorized that increased competition between public and

charter schools would lead to better educational programs for all students. Yet, despite these

freedoms, many experts argue that the charter schools are under-performing in comparison to

public schools.” Michigan is failing to fund the needs of students and the idea that schools can

function like businesses and compete for students for profit is a poor model for improving

student achievement. Schools are about communities and the cooperation of parents in the

education of all children (from students with disabilities to gifted students). Schools of choice do

not provide a competitive edge, but divide and weaken schools; fluctuating enrollment and the

funding schools need to provide quality education.”… recent investigations conducted by the

Center for Research on Education Outcomes (CREDO) at Stanford University reveal that

students' test scores may prove that public schools are now outperforming charter schools”

(Chen, 2018).

In addition, it is important to recognize that Michigan’s priorities in funding education

are far below the rate of increase of the state’s prison system. “The state spends more on

education than it does on corrections. “But the report shows that from 1979 to 2013, Michigan

increased spending on schools by 18%. During that same time period, the state increased

spending on corrections by 219%” (Higgins, para 8). Michigan’s prisons account for about one

fifth of the state budget’s general fund. Each prisoner costs the state about $30,000 a year per
THE PROBLEM WITH PROPOSITION A 7

prisoner, in comparison to about $8,000 per pupil. “At that rate, a single prisoner sentenced to

30 or more years would cost Michigan taxpayers more than $1 million to incarcerate” (Shamus,

2018). In an era that deems companies as people, and provides incrementally higher funding

priorities for prisons over schools, Michigan lawmakers must make changes in school funding

and give Michigan students the tools to further their educations and compete for jobs. According

to Kary Moss, Executive Director of the ACLU of Michigan, “Michigan has been on a downward

spiral in terms of spending on public education for nearly two decades, a situation she said is

starving schools and creating inequities in funding from school district to school district”

(Higgins, para 9).

The School Finance Research Collaborative of Michigan is a group that studies school

funding and makes recommendations to establish funding adequacy for students. The group uses

three research criteria to approach adequacy, evidence based research, professional judgement of

teachers and administrators, and the examination of successful school districts that outperform

other schools in Michigan. These research criteria have led the group to propose a system of

funding schools that will provide consistency by establishing a base rate per pupil that does not

fluctuate. This will allow school districts to plan their budgets and programs, knowing the money

is available, and greatly narrow the per pupil gap from district to district. The proposal will also

use weights added to the base rate to provided increases for students with special needs, students

that live in poverty, or students that speak another language. Rick Johnson, a Research

Collaborative member, states, “It’s time to abandon tax gimmicks that only hurt our kids and

instead give them the same opportunity to get a high-quality education and compete for jobs”

(Statement: Bills Provide Tax Relief to Big Business at Cost of Michigan's K-12 Students,

2020).
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The School Finance Research Collaborative group seeks to teach the whole child. It is

time for Michigan lawmakers to abandon Proposition A, a funding plan that is failing our

students and our schools, and adopt a plan that consistently and fairly funds schools and provides

students with the teachers and resources adequately and equitably in order to become productive

citizens. Education is the key to preserving this great democracy. Recently, President Trump

referred to Public Education as “…failing government schools” (New York Times, 2020). Yet,

when his son stayed in New York because he did not want to transfer from his exclusive private

school in the middle of the year to live in the White House, it cost taxpayers dearly. “His

[Trump] spokesman added that there ‘was ‘obviously a sensitivity to pulling out a 10-year-old in

the middle of the school year.’ (The unprecedented cost of protecting the First Family in New

York for a prolonged period of time is reported to be about $1 million per day.)” (Fox, 2016).

Michigan students need an adequate and equitable education so they can further their education,

support themselves and their future families, and be knowledgeable of the democratic process

and their civil liberties. It is time to make Michigan schools great again.
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