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Michigan Mandatory School Funding Initiative, Proposal 5 (2006)

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Proposal 5 or the Mandatory School Funding Initiative would have established mandatory school funding levels on annual basis in Michigan. Other aspects of Proposal 5 include:

  • Increase current funding by approximately $565 million and require State to provide annual funding increases equal to the rate of inflation for public schools, intermediate school districts, community colleges, and higher education (includes state universities and financial aid/grant programs).
  • Require State to fund any deficiencies from General Fund.
  • Base funding for school districts with a declining enrollment on three-year student enrollment average.
  • Reduce and cap retirement fund contribution paid by public schools, community colleges and state universities; shift remaining portion to state.
  • Reduce funding gap between school districts receiving basic per-pupil foundation allowance and those receiving maximum foundation allowance.


During the Nov. 2006 election Proposal 5 failed with 1,366,355 votes supporting the measure and 2,259,247 votes against it.


The Michigan Education Association, the proponents of the bill

Dexter Community Schools released a document supporting the measure:

  • Any pension requirements above 14.87% will be paid by the state, saving the district $465,000 a year
  • An increase of by-pupil funding
  • For schools with declining enrollment, a three year average will be used
  • If there are deficiencies to pay for the mandatory increase, it will be covered by the State's General Fund
  • If this is not passed the budget must be cut by $3 million through employee layoffs and program eliminations[1]


Michigan Catholic Conference

The Michigan Catholic Conference opposes Proposal 5 due to its "potentially devastating effect on state programs and services that assist Michigan's poor and vulnerable population, as well as its failure to address the real needs of public school students."[2]
Other arguments the group noted include:

  1. The requirement to either raise taxes or cut other state programs
  2. Alleges the only intention is to increase pension benefits.
  • No accountability on how the money is spent
  • Only monetary requirement written in the initiative is $380 million for pension programs
  • Would require 3/4 majority vote by both the House and Senate to change the amount of funding if the bill passed.

Political Community

The Mackinac Center for Public Policy wrote a report that concluded that the initiative would be harmful to state policy and budget. Some of the conclusions of the report included:[3]

  1. Proposal 5 would leave lawmakers with less flexibility during future declines in state revenue growth.
  2. Proposal 5 would provide lawmakers an incentive to cut state spending on certain primary and secondary education programs, such as adult and vocational education, by an estimated $141.7 million in fiscal 2007.
  3. Tax increases could also be used to raise some or all of the first-year spending required by Proposal 5.
  4. Economist Richard Vedder recently found no association between state spending on higher education and economic growth, and therefore no support for increasing education cost.
  5. Proposal 5 could produce unintended educational effects. Granting additional money to districts with declining enrollment could insulate poorly performing districts from the financial consequences of their failures.

Other Community Opposition

Citizens for Equity, Michigan Chamber of Commerce, Michigan County Social Services Organization, Michigan Health and Hospital Association, Michigan Municipal League, Michigan Osteopathic Association, Michigan Professional Firefighters Union, Michigan Restaurant Association, Michigan Sheriff's Association, Michigan's State Police Command Officers Association, Michigan State Police Troopers Association, Michigan Townships Association, Police Offers Association of Michigan, Small Business Association of Michigan, Detroit Regional Chamber of Commerce, Health Care Association of Michigan, Michigan Association of Chiefs of Police, Michigan Association of Community Mental Health Boards, Michigan Association of Counties, Michigan Association of Fire Chiefs, Michigan Association of Health Plans, Michigan Association of Local Public Health, Michigan Business and .[4]

Opposing Schools

Professional Association, Community College Association, President's Council of the State Universities of Michigan, Traverse City Area Public Schools[5]

Fiscal Statement

Would cost the state between $566.6 million and $1.1 billion during the first year, according to the Michigan Board of Canvassers.[6]

A Taxpayer’s Perspective from the National Taxpayers Union

Proposal 06-5 would increase current K-16 education funding by $565 million and guarantee a minimum funding level for elementary and secondary schools as well as higher education institutions; the spending “floor” would grow higher every year as inflation rises.

See Also:

Michigan 2006 Ballot Measures Michigan 2008 Ballot Measures

External Link


  1. Dexter Prop. 5 FAQ
  2. Proposal 5-Unreasonable, Unfunded, and Unnecessary, Michigan Catholic Conference, Oct. 2006
  3. An Analysis of Proposal 5: The ‘K-16’ Michigan Ballot Measure, Mackinac Center for Public Policy
  4. Proposal 5-Unreasonable, Unfunded, and Unnecessary, Michigan Catholic Conference, Oct. 2006
  5. Ballot proposal's impact pondered, Traverse City Record Eagle, Oct. 11, 2006
  6. Proposal 5-Unreasonable, Unfunded, and Unnecessary, Michigan Catholic Conference, Oct. 2006