ERIC Number: ED468340
Record Type: Non-Journal
Publication Date: 2002-Jun-26
Reference Count: N/A
Expanded School Sinking Fund Taxes: Infrastructure Investment, or Backtracking on Proposal A?
Anderson, Patrick L.; Watkins, Scott D.; Geckil, Ilhan K.
In 1994, Michigan voters approved Proposal A, which reduced school property taxes, increased the sales tax, and established a per-pupil funding guarantee for public schools. This report describes the effects of Proposal A and challenges to it. Since Proposal A was implemented, funding for schools has grown substantially while property taxes have fallen, as promised. However, school districts have levied additional taxes, resulting in a millage-rate growth of over 60 percent in 6 years. Michigan legislators continue to explore ways to increase the taxing powers of local school districts beyond those allowed by Proposal A. One proposal would allow districts to use "sinking-fund" taxes to pay costs that go beyond their intended use. To better understand the impact of such legislation on taxpayers, this report simulated the effects of increased school sinking-fund taxes over a 10-year period and found a substantial tax increase. As a result, the report presents the following options for Michigan policymakers: (1) retain Proposal A; (2) consider regional taxes; (3) prohibit "double dipping"; (4) tighten allowable purposes for debt millage; (5) expand charter schools; and (6) insist on better management. (Contains nine charts and graphs, and photocopies of state documents itemizing Proposal A.) (WFA)
Descriptors: Educational Finance, Elementary Secondary Education, Finance Reform, Financial Support, Property Taxes, Public Schools, Public Support, School Funds, School Taxes, Tax Allocation, Tax Effort, Tax Rates
Anderson Economic Group, 615 West Ionia Street, Lansing, MI 48933. Tel: 517-374-2596; Fax: 517-487-9097; Web site: www.AndersonEconomicGroup.com. For full text: http://www.andersoneconomicgroup.com/Projects/schools/sinkingfund/FINAL_sinkingfund.pdf.
Publication Type: Reports - Evaluative
Education Level: N/A
Authoring Institution: Anderson Economic Group, Lansing, MI.
Identifiers - Location: Michigan