2007 Senate Bill 54: Expand school “sinking fund” uses

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Introduced by Sen. Gretchen Whitmer (D) on January 24, 2007, to allow school districts to use “sinking fund” taxes for a wider variety of purposes. Under current law, sinking funds are permanent funds that may be used only for the purchase of land, or construction and (major) repair of school buildings. Regular school bonds may be used to fund a much wider array of activities. Schools are allowed to levy up to five mills for sinking funds. The expanded uses proposed by the bill potentially include items considered operating expenses. Since new operating expense millages were prohibited by a vote of the people in the 1994 Proposal A initiative, it is likely that the bill would require a 3/4 majority vote in the House and Senate. This supermajority is required by the Constitution on any bill amending an initiative adopted by popular vote.
- Referred to the Senate Education Committee on January 24, 2007.

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1) Titanic Sinking Funds by Mike Hignite on April 18, 2007
Sinking funds allow for the retirement of long-term debt for capital projects. They lock up tax money for many years, as is appropriate for things like buildings.

Using a sinking fund for normal operating activities like salaries, programs and short-lived computers is not smart.

It's like taking out a mortgage to by a television set.
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2) Nothing to do with the MEA by Anonymous Citizen on April 17, 2007
Actually, it's an effort to be able to use funds for items like computer leases/technology and bussing which has nothing to do with the MEA or teacher's salaries. If this could be expanded, we would be able to prevent some of the cuts in our schools like increasing the walking distance to have less busses (this puts our kids at risk if they have to walk further distances). Sinking funds would never be used for teacher/administrative costs.
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3) Worth Considering, Maybe by Anonymous Citizen on January 28, 2007
From the capsule summary provided by the Mackinac Center, it appears this bill might restore some capacity for local school districts to help provide for their own funding. Whether that is a good thing or a bad thing certainly is open to debate.

One thing for certain is that Proposal A stripped local communities of the ability to tax themselves at levels that would allow them to fund their schools at levels they see fit – either up, or down. That put local communities more at the mercy of, more under the control of a central legislature in Lansing.

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