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The right to criticize government is also an obligation to know what you are talking about.
-Lent Upson, 1st Executive Director of CRC
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This page analyzes an issue that will appear on Michigan's statewide ballot at the November 7, 2006 general election. The Citizens Research Council of Michigan does not endorse candidates for office or take position on ballot issues. In analyzing these ballot issues, CRC hopes to provide more information so that voters can make better informed decisions in formulating their vote.
Proposal 2006-05: Educational Funding Guarantee Law
The Citizens Research Council has released its analysis of Proposal 2006-05, the Educational Funding Guarantee Law, a statutory initiative that Michigan voters will be presented with at the November 7, 2006, general election. The proposal would amend the State School Aid Act to guarantee a minimum amount of state funding for K-12 schools, community colleges, and universities in Fiscal Year 2007 (FY07). For all years after fiscal year 2007, the proposal would guarantee funding increases equal to the annual change in inflation. |
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In addition to the state funding guarantees, Proposal 2006-05 would cap the amount of retirement contributions to the Michigan Public School Employees Retirement System (MPSERS) made by K-12 schools, community colleges, and universities, and require the State of Michigan to make up the difference between the capped employer's contribution and the actual retirement contribution required by the system.
The proposal also contains a declining enrollment provision for K-12 school districts that are experiencing falling student membership. The provision allows the use of a three-year average to determine current-year membership. Finally, the proposed law would require the gap between the basic per pupil foundation allowance and the maximum state-guaranteed per pupil foundation allowance to be reduced from $1,300 to $1,000 by fiscal year 2012.
The Citizens Research Council estimates that the additional costs of the proposed law to the enacted FY07 state budget will be between $565 million and $707 million. Under the proposal, these costs will have to be financed by the State's General Fund. At the minimum level, Proposal 2006-05 would increase the amount of the General Fund budget currently dedicated to education spending from 21 percent to 27 percent. After FY07, assuming moderate state revenue growth, the Research Council estimates that the proposal's required inflationary increases in education funding (excluding retirement costs) can be financed by existing resources without having to reduce the amount of money allocated to other state programs.
Over two-thirds of the initial additional costs to the State from Proposal 2006-05 arise from the provision to cap employer retirement contributions. This cost component represents a new financial obligation to the state budget and will steadily increase each fiscal year. The State's projected annual costs associated with the required retirement contributions will rise faster than inflation, thereby requiring policymakers to reconfigure state finances to meet the education funding guarantees within existing resources or to raise general revenues.
The proposal provides guaranteed funding for various levels of education regardless of the State's fiscal condition. The annual inflationary increases may require reductions to other programs financed by the General Fund, such as health care, corrections, assistance to the poor, especially if state revenues fail to grow with inflation. Further "crowding out" of these other areas of the state budget will result from the proposal's retirement provisions, unless state revenues are raised to finance these new costs.
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CRC's Analysis |
CRC Summary |
Ballot Language |
Read Initiative |
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The Ballot Proposal Process in Michigan: A Synopsis
There are four methods whereby a proposal can be placed on the statewide ballot in Michigan: (1) statutory initiative, (2) voter referendum, (3) legislative referendum, and (4) constitutional amendment.
STATUTORY INITIATIVE is defined by Section 9 of Article 2 of the Michigan Constitution as the power which the people reserve to themselves "to propose laws and to enact and reject laws." The power of initiative extends to any law the Legislature may enact and is invoked by filing petitions containing signatures of registered voters equal in number to at least eight percent of the total votes cast in the last election for governor. The Legislature is required to enact, without modification, or reject any proposed initiative within 40 session days. An initiative not enacted by the Legislature is placed on the statewide ballot at the next general election. A law that is initiated or adopted by the people is not subject to gubernatorial veto and one adopted by voters cannot subsequently be amended or repealed except by the voters or by a three-fourths vote of the Legislature.
VOTER REFERENDUM is defined by Section 9 of Article 2 of the Michigan Constitution as the power "to approve and reject laws enacted by the legislature." Referendum must be invoked, within 90 days of final adjournment of the legislative session during which the law in question was enacted, by filing petitions containing signatures of registered voters equal in number to at least five percent of the total votes cast for governor in the last general election. The effect of invoking a referendum is to suspend the law in question until voters approve or reject it at the next general election.
LEGISLATIVE REFERENDUM is authorized by Section 34 of Article 4 of the Michigan Constitution, which provides that "[a]ny bill passed by the legislature and approved by the governor, except a bill appropriating money, may provide that it will not become law unless approved by a majority of the electors voting thereon."
CONSTITUTIONAL AMENDMENT is authorized by Sections 1 and 2 of Article 12 of the Michigan Constitution and may be proposed either by a two-thirds vote of the Legislature or by filing petitions containing signatures of registered voters equal in number to at least ten percent of the total votes cast for governor in the last general election.
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Last Updated October 23, 2006
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