Need help decoding school bond, sinking fund, or millage proposals on your ballot? Start here.

From Erie to Mackinaw Island, there are dozens of school funding questions on ballots across Michigan in the May 6 special election.

These can be a lot to take in and figure out, especially when some districts have multiple measures on the same ballot.

There are three different types of proposals Michiganders might see from their local district.

They all rely on millages, but in different ways for different reasons.

These are the most common type of school funding request voters will see on ballots this election cycle. It’s also the most flexible in purpose.

Money from this millage goes to the district’s general budget to pay for things like teacher salaries, utilities and other operational expenses.

The majority of homeowners don’t have to pay this tax, because most districts can only apply this tax to businesses and secondary homes, like vacation homes, rental units and AirBnBs.

There is a lot more to an operating millage because of state law. Click here or scroll down for more. 

The other two school funding initiatives Michiganders might see on their ballots this May are bonds and sinking funds. These funding methods have more use restrictions than operating millages.

For the most part, they can only be used for capital projects. So they can’t be used to give schools funds to hire more teachers, for example.

Examples of capital projects include constructing new buildings or renovating and maintaining old ones. Schools could also use these methods to buy new gym equipment, technology or transportation.

The difference between a bond and a sinking fund is primarily the speed at which schools get the money and where it comes from.

• Bond: This is basically a loan that allows districts to get all the money needed for large projects at once, allowing them to start and finish those projects faster. A millage is used to pay back the loan over time. Bonds are not allowed to be used for smaller maintenance needs. 
  
• Sinking fund: This gives districts smaller amounts of money over time instead of a big chunk of change all at once like a bond. So this funding method is not a great way to pay for big renovations or purchases. However, it does help schools make small improvements and take on long-term maintenance needs without getting a loan or taking money out of the operating budget.

Both of these funding tools require property taxes to either pay off the bond or fill the sinking fund. So districts have to ask voters to approve a millage proposal.

That ends up being an opportunity for school leaders and community members to decide what a district’s priorities should be, said David Arsen. He’s a professor emeritus in education policy at Michigan State University who has studied the state’s school finance system.

“These proposals actually get a lot of vetting,” Arsen said. “These don't get on the ballot without a lot of discussion in local communities.”

While bonds and sinking funds can’t directly be used to pay salaries and electricity bills, Arsen said some districts end up having to use operating budget money for the sorts of things that bonds and sinking funds can pay for.

“They're taking money that could be used to reduce class size, that could be used to increase teacher salaries,” he said. “So in those situations, passing a facility bond could help. It's not a direct funding of those sorts of things, but it reduces the amount the district has to otherwise spend on those things too.”

Click on a question to go directly to the answer.

How much do school budgets rely on operating millages?

What happens if an operating millage proposal fails?

How do districts decide what rate to set for an operating millage?

Can some districts ask for an operating millage that does levy a tax on primary residences?

Where can I learn about what a bond or sinking fund will be used for?

How can I make sure a district uses funds appropriately?

Can bonds or sinking funds be paid with existing taxes?

Is it a big deal when bond or sinking fund proposals fail?

Because these millages primarily apply to non-primary residences, the amount of money a district gets can vary greatly based on the community surrounding it. Usually, it is not a majority of their budgets.

Kelloggsville Public Schools in Kent County, for example, says the millage it's trying to get renewed in this May election makes up about 13% of the district's operating budget.

But about half of the per-pupil funding for White Pigeon Community Schools comes from its millage. The Jackson County district says that’s partly because the area its schools serve has a lot of non-homestead properties like second homes and farmland.

Back to question list.

The district gets less money per student.

The state has set funding at $9,849 per pupil for the 2024-25 school year. The legislature is considering a slight increase for the next school year. For most districts, a big chunk of that funding comes from the state’s collection of a 6 mill rate tax on all property.

But the state holds back a portion of these funds based on the expectation that districts will propose and pass their own operating millages.

So if a district’s operating millage is expected to bring in about $1,000 per student, the state only gives that district $8,849 instead of the full per pupil amount. If the district then fails to pass its millage, the state doesn’t add an extra thousand dollars to its contribution.

For a district like White Pigeon that gets such a large portion of per pupil funding from its millage, the funding cut would be even more drastic.

In the case of a failure, the district just has to deal with the loss — potentially leading to layoffs, building closures, transportation cuts and other reductions in educational services — until it can try to pass the millage again.

Back to question list.

They kind of don’t get to decide that.

As explained above, schools must pass their operating millages to get full access to per-pupil funding at the rate set by the state.

The state expects that each district will pass an operating millage set at $18 per $1,000 in taxable value. So the state only gives schools enough funding to make up the difference between that millage and the maximum per-pupil funding set in state law. Again, for most districts, the millage only applies to secondary residences and commercial properties, so most homeowners don’t pay this tax.

A 2019 report from Michigan State University called these operating millages “effectively a state rather than local tax.”

But why do some districts set their operating millage proposals above the 18 mill rate?

A 1978 state law, the Headlee Amendment, reduces millage rates after voters approve them based on property values. As the values go up, the millage rate automatically goes down to avoid making property owners pay more.

But if the values start going down again, the millage does not automatically go back up. And the state does not increase its contribution to per-pupil funding based on the mill rate reduction. Schools can be left with no way to close the gap.

So districts are trying to give themselves a cushion that accounts for the Headlee reduction until the millage can be renewed again. But that doesn’t mean property owners pay more, as state law caps the amount schools can get at 18 mills even if voters approve more.

For example, Lake Linden-Hubbell School District in Keweenaw County is asking for a 20 mill increase for its operational millage this May. But, the district acknowledges that it won't get $20 per $1,000 dollars in taxable value, just $18.

Back to question list.

Yes. 43 districts are allowed to levy a tax on those residences based on the fact that they were wealthier than most other districts in 1994. That’s the year the law that governs operating millages today was passed.

As of 2023, only 21 of those districts actually use their ability to tax those primary residences.

One of those districts, Farmington Public Schools in Oakland County, had a millage renewal on last November's ballot. It successfully got voters to approve about $12 per $1,000 of taxable value on primary residences.

That’s on top of the regular operating millage that most other districts use, which only impacts businesses and secondary residences. That’s set at the required 18 mill rate.

Back to question list.

Districts often have informational web pages that contain details of the proposal, including project details, timelines, budgets, pay off schedules (for bonds) and more. Some will even include images of the exact areas that need upgrades, replacements or repairs.

“You don't have to take hours, you know, ten minutes of searching on the website, you get a pretty good idea of what's being planned,” MSU professor emeritus David Arsen said. “And I think that's .. a good opportunity for citizens to get involved with things that matter in their communities.”

Arsen said there are typically a lot of opportunities for communities to get engaged around these proposals through school board meetings and informational town halls as well as social media posts and videos.

“This is one area where we have local control and the proposals actually get a lot of vetting,” he said. “These don't get on the ballot without a lot of discussion in local communities … about what we need, what it should look like, where it should be.”

Local news outlets are also a great place to learn about these proposals, Arsen said.

Back to question list.

The vetting process isn’t limited to community preferences, Arsen said. For bonds, that includes an application to the state treasurer that includes cost analyses, detailed construction plans, estimates of how many kids will use the new infrastructure and more.

In order to get approved, schools must show the state treasury department evidence that “the cost per square foot … will be reasonable in light of economic conditions” in the district’s area.

And the districts have to show that they will be able to pay the loan off in time. Districts also often detail efforts to find cheaper or more effective alternatives in information shared with the community.

After a bond is completed, there is an audit of how the funds are used to ensure that money was used in a way that fulfills the proposal’s promises and follows state law. You can find those audits on the state treasury website to review how funds were handled by your district in the past.

Back to question list.

Yes and no. Districts can’t use their operating millage on a bond or sinking fund.

But, districts have been relying on bonds and sinking funds to handle facility needs for years. So, in some cases they can just ask voters to renew or extend an existing millage that was used to pay off a past bond or fill a lapsed sinking fund.

Greenville Public Schools in Montcalm County is asking voters to extend a millage for 10 years at the current rate of 4.7 with no increase to cover a $1.6 million bond proposal. The money would go to repairing roofs, new heating units in the district's elementary schools, choir and band room upgrades as well as security improvements.

Sometimes districts are asking for a new millage or an increase to an existing one.

Mason Consolidated Schools in Monroe County, for example, is asking for a $16 million bond with a new millage of $2.69 per $1,000 in taxable value. The district says the money would be used to remove asbestos and upgrade water and electrical systems that have "caused school closures in the past."

If voters approve Mason Consolidated Schools' bond request on May's ballot, it will be the first bond the district has gotten since 2000 according to the state treasurer.

Back to question list.

Bonds are failing more often in Michigan, according to a Michigan Public Analysis, with half being rejected by voters in recent years.

Politics & Government

Michigan schools proposed bonds to build, remodel, replace. Voters rejected over half of them.

Adam Yahya Rayes

Just over half of the school bond proposals on the ballot in 2024 were rejected by voters. About a quarter of the proposals were repeat attempts after previous failures.

“The fact that a bond fails is not a disaster. It means that there needs to be more discussion,” Arsen said. “Typically there'll be a reassessment … to try to get an idea of how can we focus this in a way that will win community approval and have a clearer idea of what the community needs are. And sometimes that means scaling back a project.”

Watervliet Public Schools in Berrien County is a good example of that process. It's asking for a $13.5 million bond to make its school buildings more secure, improve classroom accessibility, expand a cafeteria and add classrooms for "hands-on learning" at its elementary schools.

The district already has a tax for a previously approved bond that is currently taxing local property at a 5.3 mill rate.

So the district is asking voters to extend the existing bond millage at current rate of $5.30 per $1,000 in taxable value so that the money which isn’t being used to pay off the old bond can start going to a new one.

The district expects to pay off both bonds by 2050, with a final combined rate under 3 mills.

Voters rejected a version of this proposal in 2023. The new version asks for less money "based on feedback provided by the community."

Back to question list.