The amount of money Michigan has to spend in its general fund for everything from prisons to health care dropped by nearly 25 percent over the past four fiscal years amid the recession and shrinking tax revenues. Yet the state's school aid fund remained relatively healthy, protected by earmarks for public schools.
State budget director John Nixon thinks those earmarks merit another look.
"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.