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Last month, I had to tell my middle-school age children that something really bad happened at a high school. Not at the high school just over a mile from our home in Michigan, but at a high school in Parkland, Florida. Our children were horrified by the tragedy, and given a recent action by our school board, by something else.
The legislature in Michigan is considering a package of bills that allow trained adults—including teachers—to carry concealed weapons in public schools. The legislation would also ban school districts from overriding the new law. Our school board has passed a resolution opposing the legislation, but it would have no choice but to comply with the law if enacted.
My kids are terrified that adults would be carrying concealed guns in their school. But I had to tell them that our opinions would be overridden by state preemption, where state law nullifies a municipal ordinance or authority, including a school district. It’s a growing trend, with Michigan offering a prime example, and not just in gun laws.
A 2017 National League of Cities (NLC) report describes how states preempt a wide range of local laws, governing everything from guns to minimum wage laws to non-discrimination laws to taxes. NLC explains that “this loss of local control means that cities cannot curtail laws to fit their needs, creating economic implications, especially when fiscal authority is limited.”
The new gun proposals are not the first time Michigan has moved aggressively to block local laws. For instance, it recently banned local governments from taxing food and sugary drinks. The state exercised its right of preemption… preemptively…since no city or county in Michigan has attempted to tax food or sugary drinks. But since cities in California, Illinois, Pennsylvania, and Washington have, the ban’s sponsors didn’t want Michigan localities to get any ideas. Michigan’s ban is ironic, given that many states are frustrated by the federal government preempting their rights to enact specific laws.
There’s not much a local government can do about this ban, either. In a 2016 study, my Tax Policy Center colleagues Norton Francis, Donald Marron, and Kim Rueben explained that each state establishes the taxing authority of its local governments. Michigan allows localities to levy an income tax, for example. And state constitutions may require that similar transactions be taxed in the same way in every jurisdiction.
Michigan’s ban, however, appears based on lawmakers’ perception of the impact of an excise tax on food and beverages on local economies. Would a local tax on junk food or soda hurt local Michigan economies or give them additional revenue for say, school districts? Now it seems, we’ll never know.
Maybe it’s just hard for local authorities to make the case for local control when the state pays most of the bills. In fiscal year 2017, according to the Michigan Senate Fiscal Agency, 80 percent of funding for Michigan public school districts came from state-collected revenue, while just 20 percent came from local taxes.
Twenty-five years ago, local taxation—mostly property taxes—accounted for 70 percent of school funding, while the state paid only 30 percent. But some school districts have far richer property tax bases than others. In an effort both to equalize funding across school districts and lower property taxes, voters approved Proposition A in 1994. The state now imposes school taxes and distributes funds to districts according to a per-pupil formula.
As a result, local property taxes have fallen while Michigan raised its sales and use tax and its cigarette tax, and created a new state education tax and a new real estate transfer tax. School districts can, with voter approval, raise their local property taxes above a base level prescribed by the state—up to a point. But that’s not always easy, especially when districts want to retain families and their kids—a critical consideration since state funding is based on the number of students in a district’s schools.
So, some districts, like mine, raise funds in other ways. For example, our district created a tax-exempt nonprofit foundation that raises and distributes tens of thousands of dollars to its public schools. In the wake of the Tax Cuts and Jobs Act’s cap on the deductibility of state and local taxes, the ability to make fully tax-deductible charitable contributions to such a foundation is an added benefit to affluent families.
And like other districts, we have active parent-teacher organizations (PTOs) that raise funds for individual schools. My school’s PTO, for example, hosted a Fall Festival and an after-school movie and game night in 2017.
So in the spirit of state preemption and limited local taxing authority—a real problem in an era of tighter state budgets—and with apologies to Jonathan Swift, I have my very own modest proposal.
The state of Michigan allows individuals of legal age to consume alcohol on school property as long as the school administrator or superintendent allows it. For some reason, school districts tend to frown on alcohol on their premises, but the state does give them discretion.
Here’s my idea: School districts could encourage donated alcohol for those PTO-sponsored fundraisers on school grounds. Parents could pay the cover charge as a donation to their PTO, and adults could eat, drink and be merry. Kind of like the local nightclub—but with kids.
True, alcohol could change the vibe at the fundraisers. But law-abiding individuals always know how to handle their alcohol, just like their guns.
What could go wrong?
I shared my modest proposal with my children. Thankfully, they’re at an age where they understand not only taxes, but satire.
If only today’s truth wasn’t stranger than fiction.
The Tax Hound, publishing the first Wednesday of every month, helps make sense of tax policy for those outside the tax world and connects tax issues to everyday concerns. Need help or have an idea? Post a comment, or send Renu an email.
Posts and comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.