Thursday, October 30, 2008

Michigan School Funding - Part IV

Michigan's total state budget is comprised of 34.6% federal tax revenues, and 65.4% state tax revenues (of which 31.6% is "discretionary" in the General Fund, and 68.4% is "targeted" for specific uses like the 6 mill state education tax on primary residences, or net lottery proceeds).

How much money gets to Michigan schools? That's mostly a function of very complex language embedded in laws like Proposal A and the Headlee amendment. It is also governed by court decisions like Durant vs. State of Michigan.

For the next school year ('08/'09) the budget total is $13. 31 Billion. This does not count money spent from prior year savings (projected to be $ 68.7 million). This also does not count local funds that supplement (i.e., lower) state aid payments. The most significant "supplement" is local tax revenue generated from the 18 mill's raised on "non-homestead" properties (these are typically business properties or second homes). The state formula mandates a dollar for dollar reduction in the state foundation allowance for every dollar raised from the 18 mill allocation on non-homestead properties (even if a municipality collects less than the 18 mills - something that can happen through Headlee rollbacks).

Clear as mud? It's more complex, but for now you can look at the chart below to see how the large blocks of money flow into the system (if you click on the chart name below the graphic it will take you to the full sized version).

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