Reply #8: MI shifted from property taxes to income+sales taxes for school funding [View All]

[Kolesar]

Income and sales tax receipts are a function of economic activity. Hence, when the the bush recession started, funding decreased dramatically. I can see why Michigan and Detroit schools are in such trouble. In the 1990s, they accomplished lowering property taxes by shifting school funding to income and sales taxes. This also addressed funding inequities between rich and poor districts.

I am trying to imagine a system where the state floats school operating bonds to be paid out of tax receipts. This could buffer the effect of huge shortfalls due to a bad year. Consider that in a year when the stock market goes down, capital gains taxes drop to almost zero. Good luck Michiganders.