From St. Joseph County to Sault Ste Marie, there are dozens of school funding questions on ballots across Michigan in the August 5 primary election.
These can be a lot to take in and figure out. Sometimes districts have multiple measures on the same ballot.
There are three different types of proposals Michiganders might see from their local district.
They all rely on millages, but in different ways for different reasons.
Operating millages
These are the most common type of school funding requests voters will see on ballots in most election cycles. It’s also the most flexible in purpose.
Money from this type of millage goes to the district’s general budget to pay for things like teacher salaries, utilities and other operational expenses.
The majority of homeowners don’t have to pay this tax, because most districts can only apply this tax to businesses and secondary homes, like vacation homes, rental units and AirBnBs.
There is a lot more to an operating millage because of state law. Click here or scroll down for more.
Bonds & sinking funds
The other two school funding initiatives Michiganders might see on their ballots this August are bonds and sinking funds. These funding methods have more use restrictions than operating millages.
For the most part, they can only be used for capital projects. So they can’t be used to give schools funds to hire more teachers, for example.
Examples of capital projects include constructing new buildings or renovating and maintaining old ones. Schools also commonly use these funds to buy new athletic equipment, classroom technology or school buses.
The difference between a bond and a sinking fund is primarily the speed at which schools get the money and where it comes from.
- Bond: This is basically a loan that allows districts to get all the money needed for large projects at once, allowing them to start and finish those projects faster. A millage is used to pay back the loan over time. Bonds are not allowed to be used for smaller maintenance needs.
- Sinking fund: This gives districts smaller amounts of money over time instead of a big chunk of change all at once like a bond. So this funding method is not a great way to pay for big renovations or purchases. However, it does help schools make small improvements and take on long-term maintenance needs without getting a loan or taking money out of the operating budget.
Both of these funding tools require property taxes to either pay off the bond or fill the sinking fund. So districts have to ask voters to approve a millage proposal.
That ends up being an opportunity for school leaders and community members to decide what a district’s priorities should be, said David Arsen. He’s a professor emeritus in education policy at Michigan State University who has studied the state’s school finance system.
“These proposals actually get a lot of vetting,” Arsen said. “These don't get on the ballot without a lot of discussion in local communities.”
While bonds and sinking funds can’t directly be used to pay salaries and electricity bills, Arsen said some districts end up having to use operating budget money for the sorts of things that bonds and sinking funds can pay for.
“They're taking money that could be used to reduce class size, that could be used to increase teacher salaries,” he said. “So in those situations, passing a facility bond could help. It's not a direct funding of those sorts of things, but it reduces the amount the district has to otherwise spend on those things too.”
Questions and answers to help you decide which bubble to fill in for school funding requests on your ballot:
Click on a question to go directly to the answer.
Operating millage questions:
How much do school budgets rely on operating millages?
What happens if an operating millage proposal fails?
How do districts decide what rate to set for an operating millage?
Can some districts ask for an operating millage that does levy a tax on primary residences?
Sinking fund & bond questions:
Where can I learn about what a bond or sinking fund will be used for?
How can I make sure a district uses funds appropriately?
Can bonds or sinking funds be paid with existing taxes?
Is it a big deal when bond or sinking fund proposals fail?
Operating millage questions:
How much do school budgets rely on operating millages?
Because these millages primarily apply to non-primary residences, the amount of money a district gets can vary greatly based on the community surrounding it. Usually, it is not a majority of their budgets.
Nottawa Community Schools in St. Joseph County, for example, says the millage it's trying to get renewed in August would bring in just over $600,000. That’s nearly a quarter of the district's proposed operating budget for the upcoming school year.
But about half of the per-pupil funding for White Pigeon Community Schools comes from its millage, which passed in May. The St. Joseph County district says that’s partly because the area its schools serve has a lot of non-homestead properties like second homes and farmland.
What happens if an operating millage proposal fails?
The district gets less money per student.
The state legislature has been considering setting funding at about $10,000 per student for the 2025-26 school year. But the divided legislature hasn’t been able to reach a budget deal yet. For most districts, a big chunk of that funding comes from the state’s collection of a 6 mill rate tax on all property.
But the state holds back a portion of these funds based on the expectation that districts will propose and pass their own operating millages.
So if a district’s operating millage is expected to bring in about $1,000 per student, the state would only give that district about $9,000 instead of the full per pupil amount. If the district then fails to pass its millage, the state doesn’t add an extra thousand dollars to its contribution.
For districts like Nottawa Community Schools that get a larger portion of per pupil funding from their millage, the funding cut would be even more drastic.
When millages fail, districts can try to pass the millage again or school leaders have to deal with the financial loss. This can potentially lead to layoffs, building closures, and other cuts to educational services.
How do districts decide what rate to set for an operating millage?
They kind of don’t get to decide that.
As explained above, schools must pass their operating millages to get full access to per-pupil funding at the rate set by the state.
The state expects that each district will pass an operating millage set at $18 per $1,000 in taxable value. So the state only gives schools enough funding to make up the difference between that millage and the maximum per-pupil funding set in state law.
For most districts, the millage only applies to secondary residences and commercial properties. So most homeowners never have to pay this tax.
A 2019 report from Michigan State University called these operating millages “effectively a state rather than local tax.”
But why do some districts set their operating millage proposals above the 18 mill rate?
A 1978 state law, the Headlee Amendment, reduces millage rates after voters approve them based on property values. As the values go up, the millage rate automatically goes down to avoid making property owners pay more.
But if the values start going down again, the millage does not automatically go back up. And the state does not increase its contribution to per-pupil funding based on the mill rate reduction. Schools can be left with no way to close the gap.
So districts often try to give themselves a cushion that accounts for the Headlee reduction until the millage can be renewed again. But that doesn’t mean property owners pay more, as state law caps the amount schools can get at 18 mills — even if voters approve more.
For example, McBain Rural Agricultural School in Missaukee, Wexford, Clare and Osceola Counties is asking for a 18.5 mill increase for its operational millage this August. But, the district acknowledges that it won't get $18.50 per $1,000 dollars in taxable value, just $18.
Can some districts ask for an operating millage that does tax primary residences?
Yes. 43 districts are allowed to levy a tax on those residences based on the fact that they were wealthier than most other districts in 1994. That’s the year the law that governs operating millages today was passed.
As of 2023, only 21 of those districts actually use their ability to tax those primary residences.
One of those districts, Farmington Public Schools in Oakland County, had a millage renewal on last November's ballot. It successfully got voters to approve about $12 per $1,000 of taxable value on primary residences.
That’s on top of the regular operating millage that most other districts use, which only impacts businesses and secondary residences. That’s set at the required 18 mill rate.
Sinking fund & bond questions:
Where can I learn about what a bond or sinking fund will be used for?
Districts often have informational web pages that contain details of the proposal, including project details, timelines, budgets, pay off schedules (for bonds) and more. Some will even include images of the exact areas that need upgrades, replacements or repairs.
“You don't have to take hours, you know, ten minutes of searching on the website, you get a pretty good idea of what's being planned,” MSU professor emeritus David Arsen said. “And I think that's .. a good opportunity for citizens to get involved with things that matter in their communities.”
Arsen said there are typically a lot of opportunities for communities to get engaged around these proposals through school board meetings and informational town halls as well as social media posts and videos.
“This is one area where we have local control and the proposals actually get a lot of vetting,” he said. “These don't get on the ballot without a lot of discussion in local communities … about what we need, what it should look like, where it should be.”
Local news outlets are also a great place to learn about these proposals, Arsen said.
How can I make sure a district uses funds appropriately?
The vetting process isn’t limited to community preferences, Arsen said. For bonds, that includes an application to the state treasurer that includes cost analyses, detailed construction plans, estimates of how many kids will use the new infrastructure and more.
In order to get approved, schools must show the state treasury department evidence that “the cost per square foot … will be reasonable in light of economic conditions” in the district’s area.
And the districts have to show that they will be able to pay the loan off in time. Districts also often detail efforts to find cheaper or more effective alternatives in information shared with the community.
After a bond is completed, there is an audit of how the funds are used to ensure that money was used in a way that fulfills the proposal’s promises and follows state law.
You can find those audits on the state treasury website to review how funds were handled by your district in the past.
Can bonds or sinking funds be paid with existing taxes?
Yes and no. Districts can’t use their operating millage on a bond or sinking fund.
But, districts have been relying on bonds and sinking funds to handle facility needs for years. So, in some cases they can just ask voters to renew or extend an existing millage that was used to pay off a past bond or fill a lapsed sinking fund.
Northville Public Schools in Wayne County is asking voters to extend a millage for 10 years at the current rate of less than 1 mill to cover a sinking fund that will give the district $4.1 million annually. The district says the money would go to repairing roofs, new laptops for students, security upgrades and more.
Sometimes districts are asking for a new millage or an increase to an existing one.
Union City Community Schools in Branch and Calhoun Counties, for example, is asking for a $19 million bond with a new millage of $2.59 per $1,000 in taxable value over a 30 year period.
Currently, the district has a combined middle and high school building. The bond would be used to separate the grade levels into different wings, create a “STEM lab,” fix foundation issues in the elementary school building and more.
If voters approve Union City Community Schools' bond request on August's ballot, it will be the first bond the district has passed since 1972. The district failed to pass bonds in two separate 1992 elections and hasn’t tried again until now, according to the state treasurer.
In some cases, districts can ask for voters to extend a bond or sinking fund for less money. Fitzgerald Public Schools in Macomb County is seeking to replace two existing sinking funds that expire in 2026 with one new millage that will last until 2035 and cost taxpayers slightly less.
Is it a big deal when bond or sinking fund proposals fail?
Bonds are failing more often in Michigan, according to a Michigan Public analysis, with half being rejected by voters in recent years.
“The fact that a bond fails is not a disaster. It means that there needs to be more discussion,” Arsen said. “Typically there'll be a reassessment … to try to get an idea of ‘how can we focus this in a way that will win community approval?’ and have a clearer idea of what the community needs are. And sometimes that means scaling back a project.”
Watervliet Public Schools in Berrien County is a good example of that process. In the May election, the district asked for a $13.5 million bond to make its school buildings more secure, improve classroom accessibility, expand a cafeteria and add classrooms for "hands-on learning" at its elementary schools.
Voters approved its proposal to extend the existing bond millage at the same rate so that the money which isn’t being used to pay off the old bond can start going to a new one.
The district expects to pay off both bonds by 2050, with a final combined rate under 3 mills.
Voters rejected a version of this proposal in 2023. The new version asked for less money "based on feedback provided by the community."
But it doesn’t always work out so cleanly.
In the same May election, Mason Consolidated Schools in Monroe County came to voters for a $16 million bond with a new millage of $2.69 per $1,000 in taxable value.
Voters rejected a previous attempt to pass a millage that was more than twice as large in 2020. After that failure, the district held listening sessions, sent informational mailers and did a survey.
That survey laid out four possible bond requests and asked over 500 participants for their feedback on each. All four proposals were much smaller than the version that failed and focused on different priorities.
A majority of the survey’s participants said they would vote to accept the second smallest proposal, which would use the money “solely” to address “critical facility needs and maintenance upgrades.” This included upgrading water and electrical systems that have "caused school closures in the past."
Nearly 90% of the people surveyed also said they believed the district needed to improve its facilities. Yet, at the ballot box, the bond failed with a nearly two-to-one vote.
Superintendent Kelli Tuller told Michigan Public there’s no risk that that district won’t be able to keep its buildings standing.
“But we will have times that I think … school could be shut down” due to electrical or sanitation issues, Tuller said. And the "disruption" to education could happen “more and more” as systems age.
Tuller said she’s not sure when the district may try to put forward another bond request.
“I continued to tell my team … that I would be okay with the outcome because we would go to work either way. We go to work on projects or we go to work on what's next,” she said. “That's where we're at right now, is what's next. We have to go back to our community.”
