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This bill would give charter schools a cut of millage revenue. Here's what you need to know.

Oct 23, 2017

Under current law, charter schools don't get any funding from regional enhancement millages.
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There’s a bill going through the state legislature right now that would require traditional public schools to share money raised by regional enhancement millages with charters.

Senate Bill 0574 was passed by the Senate last week after it was introduced by Representative David Hildenbrand, R-Lowell, in September.

The bill has caused a lot of controversy and complicated the ongoing debate about charter schools in Michigan.

So what would the bill change, and how would it affect schools?

Charter schools would collect a portion of revenues from millages

If passed, any money raised by enhancement millages would have to be split with charter schools on a per-pupil basis.

Under current law, intermediate school districts can levy regional enhancement millages in order to provide additional money for schools. That money is divided on a per-pupil basis between the districts within that ISD.

For example, in 2016 voters in Wayne County approved a millage that would provide the public schools in that ISD with $80 million annually for the next ten years. That works out to around $375 per student per year.

The argument for allowing charter schools to get a cut of that money hinges on the fact that charters are considered public schools under the Michigan Constitution. Republicans say that charter school students have the same right to the money raised by millages as traditional public school students.

But Democrats opposed to the bill say it is an attempt to take money away from traditional public schools, and to aid charter schools owned by private institutions.

It would apply to current millages

Sen. David Hildenbrand has said he does not expect the bill to apply to existing millages, and that it would only affect any new millages or renewals.

Craig Thiel of the Citizens Research Council of Michigan says otherwise.

“As I read it – and I’m not a practicing attorney, I’m a public policy guy – I can’t see where this only applies to renewals or new millages," Thiel said. "It appears that the language is written that the next time the revenue is collected, and if this law were put on the books, the distribution would change and the charters would take a piece of the existing millages.”

The Senate Fiscal Agency agrees with that conclusion.

"This tax and the authorization for this tax goes all the way back to Proposal A - yes, 25 years ago." - Craig Thiel

So if the bill passes, some of the money from that 2016 Wayne County millage could go to the county’s many charter schools. That would mean traditional public school districts would take an approximately 24 percent cut in millage revenue.

The bill would also affect schools in Kalamazoo, Kent, Midland, Monroe and Muskegon, the other ISDs that have passed millages.

Democrats say that is unfair to voters, who approved the millage with the understanding that it would help fund traditional public schools.

Thiel notes that in the grand scheme of things, the millages do not provide a massive amount of money to traditional public schools.

“Talking about total per pupil funding in the state … and looking at the total picture of, you know, between $12- and $13,000 per kid, $300 is not a huge sum. It’s an important sum, but it’s not a huge sum overall,” said Thiel.

It all goes back to Prop A

“This tax and the authorization for this tax goes all the way back to Proposal A - yes, 25 years ago,” Thiel explained.

You might remember Prop A. In March 1994, it was approved by voters and resulted in a total revamp of the way Michigan funds public schools.

The new policy eliminated the use of local property taxes as a source of school funding, and it required the state’s lowest-funded school districts to receive a basic level of education funding. To compensate for the end of property tax use, it added a new state education tax and raised the state sales tax.

The law also established charter schools in Michigan.

Thiel says that when Prop A was passed, people wanted a way to raise revenue for their local schools, so the ability to levy local millages was included in the policy.

"But charters 25 years ago weren’t envisioned to be as big a player in the public school environment as they are today,” he added. 

Some say that this new bill would simply be putting a band-aid on an out-dated education financing system.