By Michael Yenshaw
To help voters gain more understanding about the Howell Public Schools Bond Proposal that will appear on the May 7, 2019, special election ballot, here is some background on the funding mechanisms involved in the existence of public school districts in Michigan:
When taxpayers receive their summer and winter tax statements, the amount levied for local districts only pays for the construction costs of the current facilities in place and any other tax proposals passed. In Howell, there is the Technology Bond Proposal that was passed in 2015 that is also included. This total amount of debt is scheduled to be paid off by 2029.
The upcoming bond proposal would extend this time frame by five more years, as it has a term-limit of 15 years. The day-to-day operation of districts has been funded for the last three decades by the inception of state-wide Proposal A, which was approved by the Legislature in 1993 and passed by the voters in 1994. This essentially ended the prior use of local property taxes to fund the operation of districts.
School district operations are comprised primarily of wages, insurance, retirement costs, utilities, and supplies. A state School Aid Fund was subsequently established by the Legislature to take the place of property taxes for this purpose. The fund is a combination of several different state taxes. The majority is the sales tax at 45 percent; income tax at 20 percent; state education tax at 15 percent; and over a half-dozen other taxes. This includes the often-advertised lottery contribution to schools, which amounts to only 7 percent. The school aid fund uses a formula called the foundation allowance to disburse monies to districts based on a per-pupil amount decided on annually by the Legislature. This leaves sinking funds or bond proposals as the primary funding mechanisms in place to construct and/or maintain the district’s facilities.
Howell Public School’s facilities are aging, with the last new school building being built just over 15-years ago, and they are in need of immediate attention. Homeowners realize that as your residence ages, you have to maintain it at differing cost-levels or it will fall into disrepair. With the downturn in the economy over 10-years ago, the district has been putting-off major maintenance needs and basically using a Band-Aid strategy.
The district decided to approach the voters with a ballot measure last year to fill this funding gap. The sinking fund was narrowly defeated by 28 votes, with 1,500 voters choosing not to cast a vote on the measure. The issue was revisited by the district and a bond proposal appears to be a more viable approach to maintaining the facilities, even though the total amount being requested is a larger amount than the sinking fund.
People familiar with school district finances may point to other local budget areas to denounce the need to request the bond proposal. The district has been utilizing a portion of the proceeds from the sale of the Latson Road. property in 2016 towards facility maintenance. This money has also been a Band-Aid and is quickly nearing its depletion. There is fund balance equity, but that is money that has been set aside to supplement the budget, commonly referred to as a rainy-day fund. In the last 10-years, portions of it have been used to make up for budget-deficits several times. There is nowhere near the amount of money needed to address the maintenance of facilities and other needs.
The district was recently awarded a grant from the Michigan State Police-Competitive School Safety Grant Program in the amount of $244,000. This addresses only a small portion of the money required for security upgrades as it will be used for updating the 20-year-old exterior building access system and visitor management system. Additions or alterations to the building entrances will also have to come from the bond proposal.
Some will say that more budget cuts need to be made and this couldn’t be further from the truth. General fund budget cutting has been on-going for over the last 10-years, just to avoid major deficits. Accomplishing what the district needs without the bond proposal would most likely result in the elimination of some instructional programs and a reduction in staffing. This result would be something the district can’t afford.
Michael Yenshaw of Howell is a member of the Howell Public Schools Board of Education. He retired as a Michigan State Police trooper in 2016, and is currently a support enforcement officer for the Livingston County Fried of the Court. His three daughters are graduates of Howell High School.