Artifact 3

Running head: PROPOSAL A: GREAT INTENTIONS WITH SOME SUCCESS

Proposal A: Great Intentions with Some Success

Thomas R. DeGrand
Oakland University
EA 741- Dr. Klein
February 15, 2016

PROPOSAL A: GREAT INTENTIONS WITH SOME SUCCESS

Abstract
In 1994, funding for public education in the state of Michigan drastically changed after the voters
approved Proposal A. This change created many advantages and disadvantages for school
districts throughout the state. Throughout this report, I will explore what some of those
advantages and disadvantages were, and still are, and will conclude with my thoughts and
recommendations for how schools should be funded moving forward. While this can often lead
to a political debate citing viewpoints from each side, I will maintain factual arguments for both
the pros and the cons using the resources that have been available to me. What you will discover
in the end is that both sides have legitimate arguments. Proposal A was a solution to a near $7
billion cut that the state legislature made to school funding by eliminating local school property
taxes. While it solved this funding issue in the state, it also created and maintained other issues.
Proposal A was needed to identify certain flaws in the system. It ultimately will be what will
lead us to a new, improved, equitable, and adequate education funding system. What that system
will look like is the million dollar questionor should I say billion dollar question?

PROPOSAL A: GREAT INTENTIONS WITH SOME SUCCESS

Proposal A: Great Intentions with Some Success

Picture thisyoure a Michigan resident in the year 1993. You have always known that
your property taxes were rather high; however, you become privy to the fact that you are paying
the third highest property taxes in the country at approximately 30 percent above the national
average (Bessette, 2006, p. 25). This outrages you! You demand change, but you understand
that the schools your children attend are receiving 66% of their funding from the property tax
revenue (Kearney & Addonizio, 2002, p. 3). Nerves calm slightly because you want what is best
for your children. However, this disturbing fact leaves a burning question in your mindif not
property taxes, then what?
Then you wake up on the morning of July 22, 1993, grab your morning paper and coffee,
and sit down ready to read what we all assume when we open the paperbad news. There it is,
in bold letters across the front page, MICHIGAN LEGISLATURE ELIMINATES THE
LOCAL PROPERTY TAX AS A SOURCE OF OPERATING REVENUE FOR THE PUBLIC
SCHOOLS- $6.5 BILLION LOST (Kearney & Addonizio, 2002, p. 2). You drop your coffee
in disbelief, and immediately wonder what Governor John Engler plans to do to fix this financial
shortfall. Soon after, Proposal A was born, voted on, and approved by the Michigan voters.
Proposal A- In a Nutshell
Proposal A was the school finance reform that occurred in the state of Michigan after the
state legislature cut approximately $6.5 billion of public school funding by eliminating local
school property taxes in 1993. Cutting two-thirds of the public schools operating revenues not
only stunned the educational community, but it also drew national and international attention
(Kearney & Addonizio, 2002, p. 2). This cut came due to the significant disparities in public
school funding by using the local property taxes as the primary source of revenue for districts. In

PROPOSAL A: GREAT INTENTIONS WITH SOME SUCCESS

addition, Michigan had one of the highest property taxes in the nation, and lawmakers needed to
find a way to bring it down closer to the countrys average. The cut in funding forced action to
find a different method of funding education in the state. Governor Engler had a solution ready.
Elected in 1990, Engler had made a 20 percent reduction in property taxes one of his
campaign promises (Loeb & Cullen, 2004, p. 3). The problem he faced was that there had been
a string of 12 consecutive failed statewide ballot proposals that were aimed at reforming the
system and that spanned more than a decade in the 1980s and early 1990s (Kearney &
Addonizio, 2002, p. 2). His solution, along with the legislature, involved two plans to replace
the property tax revenue that was lost- Proposal A and a statutory plan. Proposal As major
element was the increase in sales tax to produce the needed revenue. The statutory plan would
increase the income tax (Loeb & Cullen, 2004, p. 4). A vote was needed to pass a plan during
the spring of 1994 before the 1994-1995 school year began. Proponents on both sides marketed
heavily to sway voters, and then on March 15, 1994, Michigan voters resoundingly passed
Proposal A with a 69-31 margin (Kearney & Addonizio, 2002, p. 2). From that day forward,
Michigans public school funding was forever changed. How it was changed is up for
interpretation.
Proposal A centered around the idea of a foundation grant given to districts per pupil
enrolled instead of the old system that based a districts revenue on the property values of the
homes within the district. The major changes in the reform came with the sales tax increase, the
property tax decrease, as well as many other changes as noted in the table on the next page.

PROPOSAL A: GREAT INTENTIONS WITH SOME SUCCESS

Table 1
Revenue Sources for K-12 Education Before and After Reform
Tax
Prior to Reform
Sales Tax
60% of proceeds from
the 4% rate

Use Tax

All revenue from the 2

percentage point increase

Income Tax

14.4% of collections from the

4.4% rate (down from 4.6%)

Real Estate Transfer Tax

Cigarette Tax (per pack)

All revenue from the 0.75%

tax
$0.02 of the $0.25 tax

Other Tobacco Products

Liquor Excise Tax

Lottery

Proposal A
60% from the 4% rate and
100% from the 2 percentage
point increase

63.4% of proceeds from the

$0.75 tax
Proceeds of the 16% tax (on
wholesale price)

Revenue from the 4% tax

Revenue from the 4% tax

Net revenue

Net revenue

State Tax on All Property

6 mills

Local Homestead Property

Tax

34 mills (average)

Local Nonhomestead Property

Tax

34 mills (average)

18 mills

Source: Adapted from Michigan House and Senate Fiscal Agencies (1994) Tables 1 and 2.
(Loeb & Cullen, 2004, p. 4)

The table above shows the changes in revenue sources due to Proposal A for public school
funding in the state of Michigan. The table on the following page shows what percentages of the
School Aid Fund come from the various sources. Notice the large majority of the revenue
coming from the sales tax.

PROPOSAL A: GREAT INTENTIONS WITH SOME SUCCESS

Table 2
School Aid Fund Revenue Sources
Source
Sales and Use Taxes
Local Property Taxes
State Property Taxes
Income Tax
Tobacco & Alcohol
Gaming
State Budget Stab. Fund
State GF
Source: Bessette, 2006, p. 25

Percent of School Aid Fund

38%
21%
14%
15%
3%
5%
3%
1%

Now that you have seen a brief history of Proposal A, including why it came to be and
the changes it made in the tax structure and the funding of public education, lets examine the
advantages and disadvantages of the major school finance reform that Michigan experienced 22
years ago.
Proposal A- The Advantages
The scenario presented in the introduction allows you to imagine what it must have been
like as a Michigan resident during this precarious time. Frustration with high property taxes was
solved, just to be replaced with frustration with increases in other taxes. However, Michigan
voters passed Proposal A by a 2 to 1 margin, showing that the public saw positives in the reform.
Lets take a look at the positives Proposal A brought with it.
Property Tax Reduction
As mentioned earlier, Michigan was ranked one of the highest in the country for property
taxes. Proposal A has done a remarkable job at doing what it was created to dolower property
taxes. Prior to 1994, property taxes represented 66% of public schools total revenue. After
1994, property taxes only represented 32% of the revenue (Kearney & Addonizio, 2002, p. 3).

PROPOSAL A: GREAT INTENTIONS WITH SOME SUCCESS

Cutting property taxes in half was a major feat, and proved very favorable among the Michigan
residents.
Increased State Share
Through the passage of Proposal A, there was a major shift in funding sources in
Michigan. Prior to 1994, local funding represented about 55% of the revenue, while state
funding represented 45%. After 1994, local funding fell to only 19% of the total revenue, and
the state was representing the remaining 81% (Bessette, 2006, p. 26). This is a remarkable shift
in how public schools were funded. This increase in share made Michigan a leader among
states in the state share of public school fundingstudy reveals that Michigan ranks sixth among
the 50 states in the state-financed share of school funding (Kearney & Addonizio, 2002, p. 38).
Many people viewed this as a positive showing that the state is ready to help improve the
education system; however, you will read later that many people also saw this as the states way
of taking control from the local districts.
Educational Equity and Adequacy
Another major objective of Proposal A was to decrease the disparity in funding between
the highest funded district and the lowest funded district. According to Bessette (2006), Prior to
Proposal A when school funding was based solely on the value of property, there was a great
inequality in per pupil funding ranging from $4,000 to $11,000 (p. 27). Proposal A sought to
shrink that funding gap by tying funding to a per pupil amount rather than property values. This
allowed districts with lower valued homes to be funded more equitably. By raising the minimum
foundation payment to $6,700 per child, districts on the lower end of the spectrum found
themselves more closely funded to other districts in the state (Bessette, 2006, p. 27). This helped
to level the playing field between districts.

PROPOSAL A: GREAT INTENTIONS WITH SOME SUCCESS

In addition, Kearney and Addonizio (2002) discuss two types of equity that Proposal A
brought: horizontal equity and vertical equity (p. 42). Horizontal equity, or equal treatment of
equals, improved nicely when looking at the reduction in disparities in basic per pupil revenue
across districts, as noted above (Kearney & Addonizio, 2002, p. 42). This leveling up
approach has achieved what it was designed to do: narrow the gap between high- and lowrevenue districts (Kearney & Addonizio, 2002, p. 44). Moreover, vertical equity, or unequal
treatment of unequals, also saw an improvement after Proposal A due to a substantial increase
in the states commitment to fund programs for at-risk students (Kearney & Addonizio, 2002, p.
49). While the equity in funding between districts was not fully resolved, it is clear that Proposal
A was successful in closing some of the gap found in public school funding.
In addition to equity in funding, another problem had to be solved- how to adequately
educate all students to achieve high standards no matter their background, socioeconomic status,
level of learning, or degree of special needs. Under Proposal A, districts would receive their
foundation allowance from the state according to the formula (foundation grant x number of
students), plus any categorical funding to help fund special education and other programs. In an
effort to provide additional funding, intermediate school districts (ISDs) could also levy an
additional three mills through a voter-approved enhancement millage (Kearney & Addonizio,
2002, p. 39). As districts continue to receive their foundation allowance each year, the question
still remainshow much is enough to adequately educate all students? Until we know that
answer, if it is even possible to find, Proposal A has at least gotten us closer by raising the per
pupil amount of all districts, while at the same time, closing the funding gap.

PROPOSAL A: GREAT INTENTIONS WITH SOME SUCCESS

Choice
Another major element to Proposal A that many view as a positive is the idea of choice.
Loeb and Cullen (2004) explain:
Proposal A expanded school choice in Michigan by allowing students to opt to attend
public school academies (PSAs), known more widely as charter schoolsOptions for
choice have been further expanded through schools of choice legislation that allows
students to attend public schools outside their home district. (p. 13)
The driving force behind this was the concern for quality of instruction in the state. Lawmakers,
along with the business community, believed that by allowing people the choice of where they
attend school, districts will need to place more focus in their quality of instruction as a way to
attract more students (Kearney & Addonizio, 2002, p. 58). In essence, it created competition
between districts, and gave them a way to increase their revenue each year by accepting out-ofdistrict students that bring with them their home districts foundation allowance (Kearney &
Addonizio, 2002, p. 60). For some school districts, school of choice has saved them from having
to make even more drastic cuts, and has ultimately saved the jobs of many teachers.
Local Funding Options
While it is true that Proposal A took much of the local control for funding school districts
and transferred that control to the state, it is important to note that the reform allows for multiple
opportunities for the voters in each local school district to vote on various methods for additional
school funding. Kearney and Addonizio (2002) specifically mention three: cash reserves,
building and site sinking funds, and bonds (p. 61).
Cash reserves may include monetary gifts, proceeds from the sale of buildings or land,
or the diversion of up to 20 percent of annual state aid for school operations (Kearney &

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10

Addonizio, 2002, p. 61). Cash reserves are usually devoted to financing minor capital outlay
needs since Proposal A prohibits foundation money from being spent on such necessities.
Building and site sinking funds have to be approved by the local voters; however, they
may not be more than five mills for 20 years. They can only be used for capital outlay purposes,
such as infrastructure improvements, maintenance, and repairs (Kearney & Addonizio, 2002, p.
61). A sinking fund does not involve borrowing and therefore does not involve long-term debt
or interest paymentsa pay-as-you-go process (Price, 2015, p. 25).
In addition to a sinking fund, a school district can sell municipal bonds, which is a debt
or obligation incurred by an operating entity with repayment characteristics that extend beyond
ten years (Price, 2015, p. 22). These are attractive to potential investors because they are low
risk and earnings are tax exempt from both federal and state income taxes (Price, 2015, p. 22).
Bonds can be used by school districts in a number of ways. Some of these include: construction
of new school facilities as well as additions to existing school buildings, energy conservation
improvements, school buses, developing athletic and physical education facilities, purchasing
furniture and equipment, and purchasing technology (Price, 2015, p. 23).
Proposal A may have stripped local school districts the ability to control their own
funding; however, it allowed opportunities like the three mentioned above to receive additional
funding through the approval of their local residents. Some districts are becoming even more
creative at finding ways to raise additional revenue (or save on spending) by: identifying learning
difficulties early to decrease the high expense of enrolling students into special education; raising
fees for athletics, other extracurricular activities, and even parking; and creating a communityfunded foundation to help fill budget gaps (Hess & Osberg, 2010, p. 68). As you can see, school
districts have opportunities to not only raise additional money, but also cut in areas that wont

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11

negatively affect student learning. This idea, along with the fact that per-pupil funding has
increased since the pre-Proposal A years, shows that the lack of money may not be entirely true
as many opponents point out. Economist Patrick Anderson of the Anderson Economic Group
states, The promise of Proposal A has been more than fulfilled by taxpayers. Theres no longer
monetary excuses for poor school performance (as cited in Bessette, 2006, p. 26). Proposal A
appears to have accomplished many of its objectives; however, did it create more problems in
doing so?
Proposal A- The Disadvantages
It would be safe to say that the majority of the people in Michigan have not viewed
Proposal A as a favorable method of funding public education. This is confirmed by a statement
from Arsen and Plank (2003), With the present budget crisis in Michigan, the number of school
districts that perceive themselves to be losers under Proposal A has grown dramatically (p.
49). In this section, I will describe four of the most common arguments against the reform.
Volatility of Sales Tax
Though Michigan may have been one of the highest ranked states in the nation in regards
to property taxes, lowering property taxes and shifting to sales tax to fund the majority of the
State School Aid Fund may not have been the best solution. As we know, the United States has
experienced an economic recession since the early 2000s. When a recession occurs, people do
two things: 1. spend less money; 2. move elsewhere in search of a job. As people spend less, the
amount of money raised from the sales tax falls. When you have people leaving the state, you
have less spending and less students in schools. When you tie public school funding to a per
pupil dollar amount, along with a tax that can be very volatile in times of economic crisis, bad
things happen. With property taxes being more stable, maintaining that as the primary funding

PROPOSAL A: GREAT INTENTIONS WITH SOME SUCCESS

12

source would have been a better option since it is not as sensitive to fluctuations in the economy
(Kearney & Addonizio, 2002, p. 56). Furthermore, Kearney and Addonizio (2002) state that
many people argued for an increase in the personal income tax rather than the general sales tax
as a more equitable approachthe evidence does seem to favor the income tax (pp. 56-57).
When one compares the effects on school funding using the pre- and post-Proposal A tax
structure during a recession, an interesting discovery occurs. Kearney and Addonizio (2002)
explain this when they state, It is entirely possible that the real resource losses experienced by
the public schools during the 1979-1983 recession would have been even greater under the postProposal A tax structure (p. 40). They go on to say, Nevertheless, until an economic downturn
of comparable depth and duration reoccurs, careful comparison of the relative performances of
the pre- and post-reform tax structures, and the legislatures political response to those
performances, will have to wait (Kearney & Addonizio, 2002, p. 40). That was in 2002 just
before the current recession hit; I think its time for the legislature to take action to solve the
public school funding crisis that we are in. It is clear this tax structure does not work in regards
to funding schools equitably and adequately, especially during tough economic times.
Equity and Adequacy Issues Remain
One of the main objectives of Proposal A was to level the playing field in how school
districts were being funded. Ironically, this was described earlier as a positive effect of Proposal
A due to the fact that it has brought the lowest districts up to a minimum foundation allowance of
$6,700 per pupil. The problem is that the highest districts have also increased (at a lower rate),
and there remains an approximate $5,000 disparity between the highest and the lowest revenue
districts. Bessette (2006) states:

PROPOSAL A: GREAT INTENTIONS WITH SOME SUCCESS

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Prior to Proposal A when school funding was based solely on the value of property, there
was a great inequality in per pupil funding ranging from $4,000 to $11,000. Contrary to
what most people think, Proposal A did not erase the inequality in funding amongst
districts, but agreed to a new minimum payment of $6,700 per child. (p. 27)
A large funding gap existed prior to Proposal A, and it still exists today after 22 years under this
reform. Kearney and Addonizio (2002) add, This directly impacts educational adequacy (p.
46). Lower revenue districts cannot adequately fund every child to achieve academic success,
thus they cannot compete with the higher revenue districts. When they cant compete, they lose
their home district students to neighboring districts through the schools of choice program (a
product of Proposal A). This creates an even tougher situation for these districts because they
are losing their per-pupil foundation allowance for every student that leaves the district. The
advent of charter schools and schools of choice legislation at the same time as the passage of
Proposal A has not helped. These schools have attracted those families who can move out of the
urban into suburban districts (Bessette, 2006, p. 29). Arsen and Plank (2003) also note this by
saying, Most central city and low-income suburban districts are worse off under Proposal A
because slow growth in the per-pupil foundation allowance has been accompanied by falling
enrollments (p. ii). Urban districts are not alone. Arsen and Plank (2003) add on saying,
Some rural districts are worse offbecause big enrollment declines have overwhelmed
increases in the per-pupil foundation allowance (p. i).
Not only have charter schools and the schools of choice program created equity issues
between districts, but the two have not done what they were intended to do: to create
competition for students (that) will drive quality and innovation in learning and substantially
improve student achievement (Price, 2015, p. 18). Price (2015) goes on to say, Student

PROPOSAL A: GREAT INTENTIONS WITH SOME SUCCESS

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achievement results have not been much different (p. 18). Loeb and Cullen (2004) confirm this
in their statement, A cross-cohort analysis did not find much evidence that these (charter)
schools improve student achievementNor do the nearby public schools improve in response to
competitive pressure from charter schools (p. 13).
While Proposal A has been somewhat successful in raising the funding per pupil and
closing the funding gap, it is clear that much improvement is needed to bring true equity and
adequacy among all districts. When this will occur is a question many people are waiting to see
answered.
Loss of Local Control
He who pays the piper, calls the tune (Kearney & Addonizio, 2002, p. 58). This old
saying may have been heard a lot after the passage of Proposal A. During the years prior, school
districts had more control and more choice with how to fund their schools and where to spend
the money. Economists have long celebrated this local flexibility as enhancing the overall
efficiency of a states K-12 education system (Arsen & Plank, 2003, p. 49). Under Proposal A,
the state shifted much of the control from local to state after they took on a much larger share of
the responsibility for funding public education in Michigan (Kearney & Addonizio, 2002, p. 58).
School leaders now must look to Lansing when it comes to funding their school district.
Losing control at the local level also created another problem: competing with other state
funding areas (Loeb & Cullen, 2004, p. 16). Since Proposal A tied school funding to the
network of state revenue raising policies, changes in any one of the state revenue instruments
may reduce funds targeted to the School Aid Fund to the other state budget areas (Loeb &
Cullen, 2004, p. 17).

PROPOSAL A: GREAT INTENTIONS WITH SOME SUCCESS

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Funding Shortfalls
Durant et al vs. State of Michigan- a prime example of one major funding shortfallstate
funding for state-mandated programs. In 1978, Michigan voters passed the Headlee
Amendment that basically said the state must provide funding for state-mandated programs at a
level no lower than the level the state paid in 1978-1979. In 1997, plaintiff districts from the
1980 Durant lawsuit were awarded $212 million in damages due to the fact that the state failed to
fund state-mandated special education programs at the level required by the State Constitution
(Kearney & Addonizio, 2002, pp. 62-63). Despite categorical funding for programs such as
special education, school districts continue to have to fund such programs from monies outside
of the categorical funding that they receive. This is putting a large strain on each districts
general fund.
Another major funding shortfall that came out of Proposal A is funding for capital outlay
expenditures. Today in Michigan, no state school aid is provided for capital outlay financing
(Kearney & Addonizio, 2002, pp. 60-61). The state decided to take away districts abilities to
raise money through local property taxes to fund their infrastructure, and in doing so, chose not
to develop a system that would provide these lost funds for districts. While there are
opportunities to raise such funds through enhancement millages, sinking funds, and bonds, none
have proven overly successful at the polls. Currently, only four ISDs have approved an
enhancement millage for operations (Price, 2015, p. 17). Additionally, Kearney and Addonizio
(2002) state, Voter response to bond issues to meet school facility needs has generally been
poorwith the majority of bond issues failing (p. 62).
The last major funding shortfall that Proposal A brought with it is the transfer of
responsibility of who pays for retirement funding. Bessette (2006) states:

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Prior to Proposal A, the retirement and pension funds were paid out of the General Fund
and, therefore, were separate from the School Aid Fund. While under Proposal A,
funding controls shifted from local to state; responsibility for retirement shifted from
state to local in 1994 just after the passage of Proposal A. (p. 31)
Bessette (2006) also uses the words unexpected, added burden, and final blow as she describes
this element of Proposal A that has caused a great deal of financial distress on school districts as
they try to pay for the increasing retirement costs (p. 23).
Funding for mandated programs, capital outlay, and retirement costs are just a few of the
areas Proposal A fell short. Until the state solves these three issues, and many more, school
districts will continue to struggle to stay afloat.
Conclusion/Recommendations
Picture thisyoure a Michigan resident in the year 2016. You sit down with your
morning k-cup coffee, and begin scrolling through various news articles on your smart phone.
Then you get to the headline, PROPOSAL A 2.0- MICHIGAN PUBLIC SCHOOL FUNDING
GEARED FOR THE FUTURE! This brings you back 23 years earlier when you remember
reading about Governor Engler cutting property taxes as a revenue source for public schools.
That $6.5 billion cut led to a drastic change in public school funding in the state of Michigan.
Over the 22 years that Proposal A has been in existence, people have argued for and against it.
You knew that a change was needed. A smile begins to form on your face as you come to realize
that your grandchildren will be able to experience a quality education that will prepare them to
compete globally. Then the question hitshow did they solve this longstanding problem?
I would like to recommend three major changes that I believe will lead to a headline
similar to the one above:

PROPOSAL A: GREAT INTENTIONS WITH SOME SUCCESS

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1. Increase the state education property tax

2. Cost-based funding
3. Provide transitional support for districts with declining enrollment
Prior to describing each of these changes, I would like to note that this paper, my research, and
my participation in a class debate, have led me to believe that Proposal A had some positives as
well as some negatives. This paper has described both viewpoints in depth. Moving forward,
the state needs to use what we have learned from Proposal A to create a new funding structure.
There will likely be elements of Proposal A in that new system. As Bessette (2006) states,
Abolishing Proposal A is not necessarily the solution(it) could have worked if the economy
were strong indefinitely. Howeverit is not a system based on equality or equity, and it shows
all children are not given the same value, nor are they receiving the same service (p. 36). I
believe my recommendations below will address these issues.
Increase the State Education Property Tax
By increasing the state property tax only two mills, earmarked for the School Aid Fund,
school districts would be provided additional revenues needed to fund mandated programs, as
well as prevent further drastic cuts in staffing, infrastructure, and programs (Arsen & Plank,
2003, p. 51). While the foundation monies cant directly be used for salaries and infrastructure,
districts wont need to use general fund dollars to pay for state-mandated programs; therefore,
more money would be available for paying the staff and improving capital outlays. An increase
of this amount would raise the typical Michigan homeowners property tax payment by less than
10 percent of the annual value of the property tax saving produced by Proposal A (Arsen &
Plank, 2003, p. 51). If a lack of funding is a major problem our state faces, then raising taxes is
unfortunately the only way that money will show up. Bessette (2006) explains, Taxes have

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18

continuously been cut in Michigan; if it is eventually seen important enough, someone might
have to sacrifice his or her political career and campaign for higher taxes (p. 37). This
recommendation does that, but has less drastic impact on Michigan homeowners.
Cost-Based Funding
Funding school districts with the assumption that all students cost the same to educate is
a primary reason school districts throughout the state are having equity and adequacy problems
in regards to funding the education of their students. Proposal A uses this approach with perpupil foundation grants given to each school district. Loeb and Cullen (2004) suggest a different
funding approach called differentiated foundation grants (p. 16). They state, The implicit
assumption that the marginal student is as costly as the average student can create severe
difficulties for districts (Loeb & Cullen, 2004, p. 16). The state needs to determine the cost to
educate a child, and find a way to take into consideration circumstances such as: urban vs. rural
vs. suburban, special education, at-risk, and second language. The last time Michigan studied
this question was in 1968. According to Superintendent Watkins, Michigan school funding
formulas have been based more on dollars available in the states budget than on research
regarding what it actually costs to educate a child (Bessette, 2006, p. 36). Its important to
note that Michigan is not unique to the idea of per-pupil funding disparities between districts.
Since the mid-1960s, lawsuits have been filed in 43 states seeking a reduction in these disparities
(Bessette, 2006, p. 36). Moving to a cost-based funding system will help decrease these
disparities and allow districts to adequately educate their students.
Provide Transitional Support for Districts with Declining Enrollment
My third and final recommendation revolves around the idea that districts with declining
enrollment simply cannot remain fiscally sound when every child that leaves their district is

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taking foundation money with them. When one child leaves, the resources needed to educate the
remaining students do not proportionately adjust for the smaller revenue. This has created
financial burdens for many districts. I believe the schools of choice program, a product of
Proposal A, had good intentions and should remain to allow parents more choice in where they
want their child to be educated. However, the state needs to put into place a program that
supports districts with declining enrollments that allows the financial burden to be distributed
over a longer period of time. This will give these districts an opportunity to adjust to reduced
revenues in a more deliberate and effective way (Arsen & Plank, 2003, p. 50). Modifications
have been made to Proposal A to provide transitional support to small declining-enrollment rural
districts; however, this support should be extended to all declining-enrollment districts (Arsen &
Plank, 2003, p. 50). Softening the blow is a simple, yet important step in supporting districts
to allow them to do what they are supposed to doeducate all children at a high academic
standard.
As you can see, Proposal A exposed the deficiencies, as well as the successes, of
Michigans school finance system. It is important that the leaders in Lansing, in addition to all
Michigan voters, understand this and make the necessary steps to improve the system
immediately. Our future as a state, as well as a nation, is depending on it. To quote Tom
Watkins, former State Superintendent of Public Instruction for Michigan, In this century, the
State and Nation that gets its system of education right will prosperOur children must receive
unprecedented, quality educational opportunities if they are to be prepared to succeed in a global
world (Watkins, 2004, p. 2). The time to get it right is nowour children- and grandchildrenare depending on it!

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References
Arsen, D., & Plank, D.N. (2003, November). Michigan school finance under Proposal A: State
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