Special Report


January 04, 2005 1 min read

In Michigan, the school finance system is based on a foundation formula, with a foundation level of $6,700 per pupil for fiscal 2005, provided by a combination of state and local resources. The foundation level is set every year by the legislature, but the figure has remained unchanged for several years. The state does not require districts to make a minimum local effort to receive state aid. Instead, Michigan assumes districts will raise an 18-mill property-tax levy and adjusts state aid accordingly. If a district is able to raise its entire per-pupil foundation guarantee by levying that local property tax, the district does not receive state foundation-formula aid. Michigan does not weight or adjust the foundation level for student or district characteristics. It did, however, provide more than $676 million in categorical aid in fiscal 2004, which is spread over 28 different programs. Michigan provides categorical support for programs such as special education transportation, aid for students eligible for free or reduced-price lunches, gifted-and-talented education, bilingual education, and early-childhood education. Michigan is one of the most active states in dedicating specific revenues to education. The state has a lottery dedicated to education and earmarks revenue from the following sources: sales and use taxes, education property tax (6 mills), cigarette tax, tax on other tobacco products, liquor excise tax, state casino-wagering tax, real-estate-transfer tax, and commercial-facilities tax.