Late in December 1993 the Governor and a bipartisan group of Legislators enacted a revision of the school funding infrastructure. Under a package of laws, a statewide ballot will be before the electorate on March 15, 1994, that features a sales tax increase from 4 to 6 percent. If rejected, residents will see an increase from 4.6 to 6 percent in the state's personal income tax. In addition, the state's main business tax, the Single Business Tax, will be raised from 2.35 to 2.75 percent. Two companion laws, Public Act 335 and P.A. 336, change the school code to improve education quality and to allocate the amounts of the dollars to be spent on educating children in Michigan.
Both plans would reinstate some property taxes on businesses and homes, but the ballot plan would reinstate less property tax on homes. The effect of the new legislation on individuals will vary based on income, property value, and school district. The economy and the new taxes on individuals may have an even greater impact on the Governor and lawmakers who are up for election in November.
Because this document went to press before Michigan's special statewide ballot went to voters on March 15, we can only hope this story has a happy ending . . . one that will improve the quality of public education for Michigan's young people and help other states as they try to resolve the complexities of school finance.
URL: http://www.ncrel.org/sdrs/areas/issues/envrnmnt/go/94-wrece.htm