Running Head: PROPOSAL A AND MICHIGAN SCHOOL FUNDING

Proposal A: An Analysis of Disparity in Michigan School Finance

Sebrina T. Shields

Oakland University

March 2018
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Running Head: PROPOSAL A AND MICHIGAN SCHOOL FUNDING

Introduction

On May 17, 1954, Earl Warren, Chief Justice of the U.S. Supreme Court wrote in part,

“…in the field of public education the doctrine of ‘separate but equal’ has no place. Separate

educational facilities are inherently unequal”. Brown vs. the Board of Education of Topeka, 347

U.S. 483 of 1954 483, was a hallmark case that examined inequities in education based upon

race and subsequently began the integration of public schools nationwide. This ruling had major

criticisms, however in 2014 an article was written that highlighted the impact of this important

civil rights litigation. The Atlantic magazine article entitled, “How Brown vs. the Board of

Education Change-and Didn’t Change American Education" (2014) cannot be ignored. article

reported that prior to Brown vs. the Board of Education integration began that “only about one in

seven African-Americans, compared with more than one in three whites, held a high school

degree…the share of all African-American adults holding high school degrees (85 percent)

nearly equals the share of whites (89 percent); blacks have slightly passed whites on that

measure among young adults ages 25 to 29.

However successful integrating schools based on race has been based upon the Brown vs

the Board of Education ruling, America still faces inequities in funding of public education. In

the state of Michigan by 1993, spending for some of the wealthiest school districts outweighed

poorer districts by a ratio of three to one. In addition, funding for school districts relied

primarily on local property taxes causing an undue hardship on Michigan residents. Michigan

taxpayers paid 33% more in property taxes in comparison to the national average. Failed

attempts to give school property tax relief and an ever-increasing disparity between wealthier

districts and their poorer counterparts was met with stalemate solutions for years. However, in

the early 1990’s, The Michigan State legislature under the leadership of Governor John Engler
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Running Head: PROPOSAL A AND MICHIGAN SCHOOL FUNDING

began a game of political chicken to force a bi-partisan solution. In July of 1993, the Michigan

legislature eliminated more that 60 million dollars in school funding, forcing the approval

funding inequities and local property taxation for schools through Proposal A. In years

following the passage of this proposal, districts in Michigan have found a reduction in the

funding inequities by placing most of funding for schools at the state level and substantially

giving property owners the much-needed break in the local property taxes.

However, there are both proponents and critics since Proposal A’s inception in the early

90’s. This paper will provide an analysis and discussion of Proposal A’s success against its

intended goals using two primary documents: The Michigan Department of Treasury’s Report

entitled, “School Finance Reform in Michigan Proposal A: Retrospective” (2002) and the

“Michigan Education Finance Study” a comparative look at Michigan School Funding by the

consulting group, Augenblick, Palaich and Associates (2016).

Assumptions and Limitations

An assumption made by this discussion, is that the analysis provided by the two primary

documents provide objective analysis and comparisons of Michigan school finances across

similar variables. Another assumption is that whether Proposal A is a direct or major influence

on its reported financial analysis by changing the funding sources for education from local to

state control. The first source may prove to be a more objective view of Michigan’s education

finances as it provides comparisons of identified financial variables across school districts and

does not purport to analyze Proposal A. The second source is a document whose goal is to

retrospectively analyze Proposal A since its inception. However, it is provided by an agency

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Running Head: PROPOSAL A AND MICHIGAN SCHOOL FUNDING

within the State of Michigan’s Treasury department. This is governmental analysis of a

governmental program. This may be a source of limited objectivity.

Discussion

The results of both the treasury department’s analysis and the APA documents indicate that

the decision to fund public school education from the state versus local property taxes and to

provide equity in funding appears to have done what is purported to do. Without this “cliffhanger”

legislation, students would be increasingly subject to inequitable funding without recourse. In that

respect, this leads to a favorable outcome based upon its original objective. However, Proposal A

has not proved to be a silver bullet solution. Because of the complexity of funding and work-

arounds such as “hold harmless” provision. Higher income districts are still typically funding

more generously than lower-income districts. In addition, if bringing the funding sourcing closer

together from the state and not based upon property taxes, then the major result should be an

increase in school achievement.

However, the achievement gap based upon socio-economic status still occur in Michigan.

Districts such as Birmingham, Bloomfield and Troy consistently score higher on standardized

testing historically. From MEAP scoring in the 1990’s to NWEA testing currently, lower socio-

economic schools such as Pontiac and Oak Park are woefully behind. The 2016 Michigan Finance

Report was instrumental in pointing out specific problems that occur under Proposal A funding:

 Michigan’s school finance system is moderately inequitable

 The state may be falling short in providing additional resources for serving special needs

populations.
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Running Head: PROPOSAL A AND MICHIGAN SCHOOL FUNDING

 number of districts spent considerably more per student than the median district. Some

variation was due to higher student need, a certain amount can be attributed to a number

of high wealth, high spending districts.

Despite the issues with Proposal A, it has still shown that if it was not enacted, then the

results would have been even more burdensome on local tax payer. In this regard, the Proposal A

has provided relief at the local level and closed the school funding gap. The Department of

Treasury Reports indicated that the pre-proposal A ration of 3:1 was reduced to as much as a 2:1

ratio of high income vs. low income schools. In addition, the report stated that, “the property tax

burden was more than 33 percent above the national average with the sales tax 32 percent below

the national average. Both are now near the national average” (2002) As with any change

initiatives, they usually start as a “stake in the ground”. Proposal A was a positive solution, but

in no uncertain terms the final or best solution for Michigan students. Looking at the studies in

terms of continually improving Michigan school finance is possible.

Continuous improvement efforts with the increasing special needs population, arresting the

creeping financial inequities in school funding (to include the increasing work-arounds) based

upon the finance study should be of utmost priority. This of course is subject to the same

political and philosophical differences that led to the game of chicken that birthed proposal A.

Recommendations

Change initiatives seldom fail because they are not successfully implemented, they fail because

of inflexibility, lack of sustainability and disregard of changing environmental factors. This is true

with Michigan’s school finances. In addition to these risks, Michigan finances are subject to

partisan politics and different philosophies of each presidential administration. As such, there are
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Running Head: PROPOSAL A AND MICHIGAN SCHOOL FUNDING

a few recommendations that could address current threats for our students and the citizens who

help to finance our schools:

 Create a bi-partisan committee that would be similar the judicial branch of government

 This committee would take 3rd party audits and reports and put specific action plans in

place to respond to data-driven analysis provided

 Look at a 1-2% flexible increase in sales tax, based on environmental condition for

funding issues in high-need districts.

 Create long-term strategic planning that anticipates changes in student populations,

special need predictions and teacher shortages that extend up to 25 years out.

Conclusion

Proposal A was not a silver bullet solution to Michigan funding disparities. However,

Proposal A was a step in the right direction. It ended years of inaction of Michigan legislators

with bi-partisan roadblocks to an ever-increasing problem for taxpayers and children. There are

critics and proponents abound, however the two documents researched in this discussion are

credible sources of data to those who have the task of continuously improving the education of

our most precious commodity. The Michigan Finance Study has provided data in which our

legislators and educational thought leaders can sort through the changing landscape that our

children are facing.

For example, if Proposal A was instrumental in closing the funding disparity gap and the

Finance study is showing that is now trending back towards a larger gap, we should be providing

a root cause analysis and looking at those factors that are impacting this trend. Although the

1993 game of political cliff-hanging provided the state of Michigan with a viable solution to two

ever present issues of high property taxes and funding disparities, we should not be in the
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Running Head: PROPOSAL A AND MICHIGAN SCHOOL FUNDING

business of political gaming to solve one of the most critical issues of our time, the equitable

education of our students despite their socio-economic status.