Nick Krieger (@nckrieger):
I've written about this topic previously. But it's worth repeating: Proposal 1, if adopted, will not constitutionally guarantee a single cent of additional revenue for K-12 schools or Michigan's per-pupil foundation grant.
Proposal 1 would generate new revenue for Michigan's School Aid Fund (SAF). This is beyond dispute. Most experts estimate that Proposal 1, if adopted, will result in an additional $300 million per year for the SAF. But would any of that additional SAF revenue ever make its way to Michigan's classrooms?
The SAF is a separate, restricted fund established by the Michigan Constitution. Since 1963, the money in the SAF has been available for three purposes only: (1) funding K-12 schools, (2) funding school employees' retirement systems, and (3) funding "higher education." In Michigan, the term "higher education" refers exclusively to four-year state universities that grant baccalaureate degrees.
If Proposal 1 is adopted on May 5th, it will amend the state constitution and fundamentally alter the nature of the SAF. Specifically, the list of permissible SAF uses will expand to include not only (1) funding K-12 schools, and (2) funding school employees' retirement systems, but also (3) funding career and technical education programs, (4) funding community colleges, and (5) funding scholarships for certain students. And Proposal 1 would not only add these three new uses; it would also remove "higher education" from the list. In other words, whereas the money in the SAF may currently be spent on three uses only, the money in the SAF will be available for five different uses if Proposal 1 passes.
Next, consider this: Most higher education funding comes from Michigan's General Fund, not the SAF. In recent years, higher education has received only about $200 million from the SAF. So eliminating higher education from the list of permissible SAF uses will not result in any great savings for the SAF. This is especially true given that community colleges (which will be one of the new SAF uses if Proposal 1 passes) receive a total, annual state appropriation for operations of about $300 million. Therefore the annual community college appropriation from the SAF will likely consume the full $200 million saved by eliminating higher education, as well as approximately 33 percent of the additional $300 million that is being projected for future years.
What does it all mean? After taking out the money for community college operations, there would be an additional $200 million in the SAF every year. But much of this money would be earmarked for (1) career and technical education programs and (2) scholarships for students—the other new SAF uses. We presently have no idea how much SAF money would go to these other new uses. But given that the Legislature saw fit to specifically include them in the proposed constitutional language, we can be sure that they would be funded with SAF dollars.
Only then—after funding all three of the new SAF uses—would any remaining amounts be leftover for K-12 schools and school employees' retirement systems. This could well turn out to be very little, if anything at all.
There is no binding formula in place to tell us how much SAF money will be spent on each of the constitutionally enumerated uses; nor are there reliable past data to guide us in this calculus. After all, three of the SAF uses would be entirely new. However, this much is certain: If Proposal 1 passes, the allocation of dollars among the five SAF uses will be left entirely to the whims and uncertainties of the legislative appropriations process. The state constitution will have nothing to say about the manner in which the SAF money will be divvied up among the five areas.
We simply have no way of knowing how much of the additional SAF revenue would be dedicated to the new constitutionally enumerated uses. It is entirely possible, however, that most or all of the additional SAF money generated by Proposal 1 would never make its way to K-12 education. At a minimum, it's something to think about next time you see one of those TV ads claiming that "Proposal 1 will put more money in schools."