Restructuring Budgets for Educational Equity

A Compromise of Contradictions

Reviewed by Isaac Park
April 21, 2014

This paper, by University of Michigan senior Hanlin Yang, examines the legacy of Proposal A, a landmark reform bill that restructured state funding for public K-12 schools in Michigan. Twenty years after its passage, Yang highlights both its successes and shortcomings, especially in regards to its effect on inter-district inequality. Yang also speculates on the funding structure’s future in a state with a precarious fiscal outlook.

Prior to the proposal, the state relied on a power equalization scheme to supplement revenues in low-income districts. Known as Direct Power Equalization (DPE), the previous structure was undermined by a formula based on millage (local property tax) rates, where a regressive funding scheme funneled more money to districts with lower rates of poverty.

Concerns about inequality led to Proposal A’s implementation. Given its predecessor’s failures, Proposal A could be considered a success, as it shifted the funding scheme slightly from local to state-level funding with the objective of promoting equality in school funding.

However, Yang warns against overstating this shift from local to state-level funding. He primarily criticizes the state for allowing many districts (at least 51 of them) to exceed millage caps, leading to tremendous variation between districts’ revenues.

Given these allowances, Yang argues Proposal A fails to promote equity among Michigan public schools, and questions the spending scheme’s sustainability. Amidst Michigan’s economic decline and shrinking enrollment in public schools, Yang points to Lansing and says it lacks the political will to aggressively redistribute funding for a more equitable society.

View the full paper here!

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