School funding gets a closer look

Published 9:35 am Thursday, December 17, 2015

The state of Michigan may be on a path to much needed improvement as it concerns one of the funding mechanisms a school district is able to utilize.

The sinking fund is a voter-approved, capped (both in size [5 mills] and duration [20 years]) property tax that districts can use to provide funding for the purchase of real estate for school construction, or repair (not maintenance) of school buildings.

Under HB 4388, a sinking fund would be allowed to be used for existing purposes, and security improvements and technology investments would be added to permissible activities. The sinking fund would still require voter approval, but the maximum levy would be reduced to 3 mills (currently 5 mills) and the duration would be reduced to 10 years (currently 20 years).

The advantage to this adjustment is an ability to implement much-needed improvements without the filing and legal fees associated with a bond (the only current way to fund such improvements). It would also be without the need to finance a short-term loan for such projects (unless a particular project required an immediate investment, or savings of a one-time investment offset short-term interest expenses), allowing districts to maximize the use of funds over a period of time, based upon a plan.

This is not only a prudent change to the existing law, but a change that brings value in the form of options to local school districts. School funding and finance is complicated, and this change would be a welcomed addition to the limited options a district has at their disposal today to serve and educate students.

While this legislation is in its infancy, it would be a much-needed step in the right direction of school operating options.


Jon Martin is a member of the Niles Community Schools Board of Education since August 2011. The views expressed here are his own. He can be reached at