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Sales tax on services one option as school groups seek revenue boost for K-12 ed

Back of a school bus
Pixabay

FAs the Michigan Legislature crafts the next state budget, school groups are hoping the Democratic majorities will come up with new revenue to support Michigan’s K-through-12 schools.

Peter Spadafore is with the Michigan Alliance for Student Opportunity. He also serves on the Lansing City Council.

He says claims that schools are being funded at unprecedented levels ring hollow when inflation and other factors are taken into account. And, he said, schools are not alone.

“We’ve got roads that need desperate repair,” he said on the Michigan Public Television show “Off The Record.” “We’ve got an education system that’s historically underfunded when you adjust for inflation. We’ve got services that are not being taken care of. Local governments are struggling. You can’t grow this state without more revenue to provide services.”

Spadafore said the Legislature should consider extending the state’s 6% sales tax to also apply to services.

“You go to the movie theater, right? You pay sales tax on the candy but not on the tickets,” he said. “A lot of folks don’t realize that, don’t know that.”

But efforts over the years to expand the sales to services have failed. A law adopted in 2007 to expand the sales tax to services was so widely panned it was quicky repealed.

In this session, there are also efforts to expand sales tax exemptions. Governor Gretchen Whitmer signed a bill in April to exempt most delivery and installation charges from the sales tax, although that was largely to fix an inconsistency in how the tax was applied.

Rick Pluta is Senior Capitol Correspondent for the Michigan Public Radio Network. He has been covering Michigan’s Capitol, government, and politics since 1987.