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School Equity Evolution:

Proposal As Lineage and Future
Matthew J. Dailey
When Governor John Engler signed Proposal A into law, Michigans K-12 education
funding was as unequal an Olympian swimmer competing against high school student-athletes.
During the lead up to Proposal As adoption, school funding aligned with the a communitys
affluence. In order to match growing needs for educating students, communities relied on their
local tax base for accessing funding for district needs. As such, Michigan taxpayers experienced
rising property taxes while schools witnessed growing disparities in available finances for their
schools. When Proposal A was enacted in July 1993, tax relief was imminent, the state adopted
a far greater role in distributing school funding, and school funding, over-time, became more
equitable for Michigans school. However, under the auspices of Proposal A, our state must now
evolve its application of the proposal to focus its efforts on the adequacy of what is needed to
prepare students for the modern-day demands beyond high school.
By the early 1990s, Michigans schools could be classified as high and low revenue
districts. With local school funding tied to local revenue sources, the quality of educational
services provided were in adherence to a communitys tax base. For Michigans students to
achieve with national results, funding first needed to be equalized at the state level. Prior to
Proposal A, thirty-two states had more equal distribution of funding per pupil revenues than
Michigan; however, by 2000, Michigan had reduced this national disparity to seventeen states
(Mattoon, 2004, p. 1). This funding equalization was achieved through several tax measures.
For starters, Michigan increased its state sales tax by two percent. While 60 percent of the the
first four percent of the sales tax went to the newly created State School Aid Fund (SSAF), one
hundred percent of the additional two percent of the sales take went directly to funding schools.
Notably as well, Proposal A stipulated a statewide education property tax of six mills on
residential and agricultural properties and 18 mills on nonhomestead properties such as

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businesses. According to Prince (1996), Proposal A allowed for a 50 percent reduction in

property taxes, reduced the disparities in funding school districts, and planned on annual per
pupil revenue increases. As an additional consequence, this method of funding shifted the
distribution of district funding more in the hands of Michigan legislators than in accordance
with local school districts.
Proposal A had a strong advantages for taxpayers and was pragmatic implementation for
poor and affluent school districts across Michigan. With taxpayers paying less to the state,
inevitably money was freed for other individual uses. After ten years under Proposal A, school
district fiscal disparity had been reduced and our current per pupil expenditure rose above the
national average (Mattoon, 2004). Therefore, the horizontal equity across Michigans schools
had been significantly leveled, allowing poor districts such as the city of Detroit and rural
communities to have reduced monetary pressures. As Mattoon (2004) points out, students in
financially desperate districts received a thirty percent increase in per pupil funding under
Proposal A. Meanwhile, for districts levying more money than was allocated by the SSAFs
foundation allowance, they were allowed to be held harmless to locally fund the difference
between the state allocated foundation allowance and the per pupil funding by more affluent
districts prior to Proposal A. With voter approval, such higher tax base districts are still
permitted to capture this funding difference between the foundation allowance and their
districts per pupil spending. However, should districts elect to be held harmless, they would
are ineligible to receive any federal funding for the districts at risk student population (Prince,
1996). For equalizing per pupil funding, Proposal A has achieved its desired ambition while
maintaining a sensitivity to districts that have the ability to fund their school district by a greater
amount.
While Proposal A equalized statewide school funding, the normalized per pupil
foundation allowance eroded local control of providing K-12 education services while making
several assumptions about the flow of money into the SSAF. Price (2015) called the school
funding change under Proposal A a state run system of Michigan education, rather than a

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system featuring local control of schools with local boards of education experiencing their
authority assharply diminished (p. 37). Mattoon (2004) echoes this sentiment with the
reduction of local control over schools as a source of friction (p. 2). As such, the state has
legislated themselves into maintaining greater control over requirements for school districts
across Michigan. However, under the occurrence of an erosion of local control over school
districts, Proposal A is problematic in the economic elasticity under which several of the funding
sources for the SSAF are based. While in 1993, the state of Michigan said each schools
foundation allowance would increase, the ideal excluded the volatility of a national and state
economy. The Great Recession left Michigan confounded with how to continue funding schools.
During this time period, our state joined other states in being unable to spend as much on
education in in 2012 as they were in 2008, once adjusted for inflation (Rebell, 2012, p. 1). Even
though property tax growth remained steady during the Great Recession, revenue generated
from sales tax and income taxes were far less reliable (Mattoon, 2004). As such, the state of
Michigan had to redirect monies from the General Fund into the SSAF in order to finance
Michigans schools. Between local boards of education being usurped of power and the SSAF
being partially funded by elastic economic sources, our state must consider if the horizontal
equality equates to an adequate education for Michigans students.
Proposal A placed a price tag on the education received by Michigans students.
However, one must scrutinize the need to fund schools with the necessity of adequately funding
schools based on their needs for vertical equity. With varying costs associated with educating
students of various socieoeconomic, linguistic, cultural, and familial backgrounds, a one-size-fits
all approach to funding is a bit out of touch with the realities of a school district. Since the
findings of the 1966 Coleman Report, the impact of a school districts money supply has been a
contested issue (Pasachoff, 2008). While the difficulty in arriving at agreeing on the
considerations in an adequate funding amount for an education cannot be understated,
policymakers should focus on designing a school financing system that assures that all students
receive a desired level of learning and that financing provides the necessary resources to support

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student achievement (Mattoon, 2004, p. 2). Questions such as what qualifies as an adequate
education, a determination on the minimum expectation for academic performance, and what
evaluations would be needed to fairly determine a students growth all are questions that
punctuate the conversation. While school funding has been found to have little effect on
academic performance (Coleman Report, 1966, and Hanushek, 1997 as cited in Pasachoff,
2008), greater financial resources in schools can lead to hiring more teachers formally trained
and officially licensed to teach while being able to retain highly effective teachers through
competitive salary schedules. Although, one must scrutinize the use of Michigans SSAF
foundation allowance if schools are not spending this money in ways that are centered on
maximizing currently available funds.
Under Proposal A, Michigan equalized funding its K-12 education system. However, as
we have distanced ourselves from the genesis of this legislation, our scrutiny of how we fund our
schools should not only rest on the adequacy of how our schools are funded, rather examine how
well these dollars are being maximized. Financial resources are finite. Accordingly, we must
ensure our profession is utilizing the dollars allocated in the foundation allowance in highleverage areas that are rooted in student growth, professional learning, and community
partnerships. Otherwise, no amount of money allocated for K-12 education will ever be
adequate.

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References
Mattoon, R. (2004). School funding ten years after Michigans Proposal A: Does equity equal
adequacy? Essays on Issues: The Federal Reserve Bank of Chicago, 203, 1-4.
Price, W. (2015). Taking the mystery out of Michigan school finance: A handbook of
understanding state funding policy for Michigan public school districts, 5th edition.
Ypsilanti, Michigan: National Council of Professors of Educational Administration.
Pasachoff, E. (2008). How the federal government can improve school financing systems.
Brookings Institute: Center on Children and Families. Retrieved from http://
www.brookings.edu/~/media/research/files/papers/2008/1/education-pasachoff/
01_education_pasachoff.pdf.
Prince, H. (1996). Proposal A and Pupil Equity. Retrieved from
http://www.house.mi.gov/hfa/Archives/PDF/Proposal_A.pdf.
Rebell, M. (2012). Four takes on tough times: The Recession - and students rights. The
Resourceful School, 4(69), 11-18.

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