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Michigan Mandatory School Funding Initiative, Proposal 5 (2006)

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Proposal 5' or the Mandaotry 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.



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:[1]

  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.

Fiscal Statement

Would cost the state $566.6 million during the first year.

External Link

Proposal 5 Ballot Language


  1. An Analysis of Proposal 5: The ‘K-16’ Michigan Ballot Measure, Mackinac Center for Public Policy