Michigan voters support more education funding, but how to pay for it is complicated

Jen Stroven, an organizer for Kalamazoo’s Yes For Families campaign, knew what she was up against: ‘Affordability, affordability, affordability.’ 

Asking voters to raise their own taxes to lower child care costs, expand access, and raise teacher wages may have seemed like a tall order at a time when the increased cost of living is a top issue on voters’ minds. But Stroven was confident the 0.5-mill property tax proposal would pass and she was right. In August, 63% of voters in Kalamazoo County approved the eight-year initiative that will add an average of $50 a month to their property tax bills.

Stroven said that even for those voters who didn’t have young kids, they were able to see the economic benefit for communities and businesses that are losing workers because of lack of affordable childcare. She said they also understood how far-reaching the impact could be from the benefits to families to childcare workers, to the kids themselves. 

“It seemed for most folks to be a worthwhile investment,” Stroven said. 

The success of the Kalamazoo millage may come at a particularly cash-strapped time for voters but its passage is part of a larger trend both statewide and nationally of a shift in thinking from childcare and early childhood education as a personal responsibility to a public good. Kent County approved an early childhood millage in 2018; Leelanau County followed in 2019.

If voters can coalesce around early childhood education as a social good, whether or not funding for K-12 education can receive similar support is a little more complicated. 

The legacy of Proposal A

For better or worse, K-12 educational funding in Michigan changed dramatically in 1994. Before, each school district relied heavily on local property taxes for funding. Unsurprisingly this led to massive inequities: Cities with a lot of property wealth could easily fund high teacher salaries, extensive programming and small class sizes with even smaller tax rates, while districts with low property values and rural communities were underfunded. 

In late 1993, the state Legislature removed the local property tax system, followed several months later by the voter-approved Proposal A constitutional amendment restructuring how Michigan funds K-12 public school operations. 

Since then, the Legislature distributes the exact same amount for each student in all schools through the School Aid Fund. Revenue for the fund comes mostly from sales taxes with small portions of revenue from income and property taxes.

Inequities still exist: Districts can pass voter-approved millages for capital expenses, such as school bonds and sinking funds to build new buildings or improve old ones. This means that some districts have state-of-the-art school buildings while students in other districts are stuck in crumbling schools.

But all Michigan districts are legally restricted from asking voters to fund operational expenses like hiring more teachers, increasing salaries or even basics like paying a building’s utility bills. This funding paradox can create an incongruent situation like what’s currently playing out in Ann Arbor: a budget crisis with teacher layoffs while new school buildings are erected from a 2018 millage. 

On one hand, the Proposal A funding model has created more solidarity among districts, said David Arsen, a Michigan State University professor who specializes in education policy and school finance. But the downside, he says, is that communities lose the ability to respond locally to their own needs even if voters would be willing to tax themselves as they were in Kalamazoo. 

Why are schools still underfunded? 

In July, Michigan lawmakers celebrated a per-pupil funding increase from $10,050 to $10,300, along with other notable educational investments from the School Aid Fund, including an expansion of the Great Start Readiness Program to fund PreK for All and free school meals. Still, school funding hasn’t kept up with inflation and the changing economy. 

A recent poll commissioned by the K-12 Alliance of Michigan found that half of surveyed voters said that their local school districts have funding shortages for the resources they need.

Not keeping up with inflation

While $10,300 per student may sound like a lot, that number hasn’t kept pace with inflation according to research from the Education Policy Innovation Collaborative at MSU.  When adjusted for inflation, Michigan now spends less on school operations than it did decades ago. In 2002, the School Aid Fund provided an inflation-adjusted average of $13,858 per student.

Decreased enrollment 

As a result of declining birth rates, population loss and other factors, public school enrollment in Michigan has declined by nearly 20%, or more than 335,000 students, since 2002. 

Tying funding to the number of students means that when enrollment drops, money disappears, even if costs increase. Schools have many fixed costs that can’t fluctuate with enrollment. A loss of even 20 students across all grade levels means a district loses hundreds of thousands of dollars while its operational costs, such as heating and cooling, running bus routes and paying school nurses, remain fixed or even increase with inflation. 

Compounding enrollment losses over several years force districts to cut essential staff and increase class sizes just to keep their budget balanced, even as per-pupil funding numbers are increased.

The problem with sales tax

Arsen explains that because the state sales tax is the primary source of revenue for the School Aid Fund, the education system loses out when there is a shift in consumer behavior and the tax code doesn’t keep up.

“The sales tax, which is the main source of revenue to the school aid fund, is based on the goods economy. There are a whole host of things in services that are not taxed. And so as the economy itself shifts from goods-producing to more services, that source of income doesn’t keep pace,” Arsen said. 

Where is the money going to come from?

The good news for schools is that voters generally agree that funding education should be a priority, and as supporters of  the Kalamazoo millage demonstrated — a case can be made that well-educated kids are essential for the future of the state. However, figuring out where the money will come from remains a challenge. 

“We can get consensus in Michigan on equitable and adequate funding. What we have not been able to do yet is get agreement on where the revenues will come in order to fund that,”  Arsen said.

The 2025 Invest in MI Kids campaign was an attempt at a solution. The campaign aimed to get a constitutional amendment on the 2026 ballot to place a 5% surcharge on single filers earning more than $500,000 and joint filers earning over $1 million. 

The initiative would have raised between $1.5 and $2 billion annually to lower student-to-teacher ratios, expand technical education and improve teacher retention.

The campaign faced several obstacles, including pushback and procedural delays along with a high signature threshold. Though the campaign collected more than 250,000 signatures, it fell short of the goal and suspended operations in March, saying it would look toward the 2028 election cycle instead. 

Despite not making this year’s ballot, campaign manager Jessica Newman, co-director of the Michigan Education Justice Coalition, still thinks there’s a path to future success.

“This is a state that is ready to tax the rich, it’s ready to fund our public goods and services, and I wouldn’t take our failure to get on the ballot as evidence of that at all,” she said.  

Newman is not alone in that belief. Stroven and Arsen agreed that education funding is increasingly a bipartisan issue in Michigan. 

As Invest in MI Kids looks to the 2028 ballot, the campaign is now considering several other funding options beyond an increased income tax on high earners. Funding options that the campaign proposed in a survey to past canvassers include repealing data center property and sales tax exemptions, raising the corporate income tax rate, introducing a wealth proceeds tax, introducing a digital advertising tax and extending the sales tax to include services.

Disclosure: The author was a volunteer signature collector for the campaign in 2025.

Voters in Kalamazoo and other counties approved taxes to pay for childcare. If Invest in MI Kids manages to get a proposal on the ballot next year, will Michiganders vote to fund education statewide? Public opinion seems to indicate they might. 

According to the EPIC survey, 65% of voters support an increase in education spending and put it on the top of their list of priorities, above even healthcare and fixing the roads.  

Newman remains hopeful. “I don’t have kids, but I understand that public schools are a public good that help every single person in the community.”

Support for this reporting came from The Better Life Lab at New America.