House Committee to Consider Sinking Fund Legislation

February 16, 2016

Legislation to allow a limited expansion of locally-approved sinking funds for school security improvements and technology equipment has been introduced by State Rep. Mike McCready (R-Birmingham). The idea originated last session in the wake of a number of shooting tragedies as a way to allow schools more ability to raise local security improvement funds.

Why should you care? Over the past decade there has been an onslaught of open-ended bills that would greatly hike your property taxes! The Michigan Chamber has historically fought aggressively against this legislation seeking unfettered expansion of sinking funds that could be diverted to paying operational costs of schools like salaries and benefits. Michigan voters, under Proposal A of 1994, chose to finance school operations primarily through state sales taxes, and previous legislation to circumvent this approach at our members expense is something we have vigorously opposed. 

However, in response to input from the Michigan Chamber, Rep. McCready’s legislation takes a much narrower, targeted approach to these issues in an effort to keep the focus of sinking funds on capital improvements as opposed to operational costs like salaries and benefits. In addition, proponents have finally been able to monetarily demonstrate that business taxpayers could save money in these limited circumstances if sinking funds were the available financing mechanism as opposed to bonds. Finally, the Chamber was also able to rebuff attempts by schools to garner amendments that would allow schools to utilize slick campaign lingo to re-name future sinking funds in an attempt to mislead voters. We believe in “truth in advertising” and are confident that local residents are capable of understanding the pros and cons of any given sinking fund or millage request. In light of these improvements, we have dropped our opposition to this particular bill, but we will remain vigilant on this issue.

For more information on this issue, please contact Tricia Kinley at