Michigan budget director questions school funding formula
State budget director John Nixon says he thinks Michigan needs to rethink the earmarks used to fund public education.
The Associated Press reports:
“It’s not that I’m saying we need to cut the school aid fund … (but) a lot of this stuff was put in place 15, 20 years ago when Michigan looked totally different,” he said during a recent interview with The Associated Press. “We just need to strip things down and say, `This is the money we’re bringing in, this is where it’s going. Is it lining up appropriately?”‘
Nearly three-quarters of the sales tax collected annually goes to the $13.3 billion school aid fund, as well as nearly a fourth of the income tax revenue, 42 percent of cigarette tax revenue and a third of the money raised by the use tax and the Michigan Business Tax. The school aid fund also receives all of the money raised through a statewide 6-mill education property tax, the real estate transfer tax, the state casino wagering tax and the net proceeds from lottery sales.
The 2012 budget approved by Gov. Snyder and the Republican-controlled Legislature took $396 million from the school aid fund and gave it to colleges and universities.
Nixon’s suggestion that the school aid fund might be further stripped will be troubling to the many school districts that are already facing layoffs and program reductions.
School districts already are watching nervously as a substantial business tax cut takes effect Jan. 1. As business tax revenue drops over the next two years, school aid revenue will sink by more than $660 million annually, according to the nonpartisan House Fiscal Agency. Coupled with the loss of federal funds, the school aid fund is expected to bring in $1 billion less in the upcoming fiscal year.