CHICAGO--Gov. John Engler of Michigan last week signed into law a bill that gives the state's poorer school districts a share of the wealthiest districts' property tax collections.
The legislation was passed last month by the Michigan House and Senate.
The new law requires the state's 170 riches school districts to share up to half of their annual growth in tax collections from commercial and industrial property with the remaining 390 school districts in the state.
The exact percentage of property tax collection growth to be surrendered by the rich districts will be determined by a formula measuring the average income levels within those districts against the state average, according to backers of the plan.
Public finance officials in Michigan have said the law will not affect any outstanding school district bonds or future bond issuance because the legislation specifically exempts property tax levies dedicated to debt service.
John Truscott, a spokesman for Gov. Engler, said the governor supported the plan as a way to begin bridging the gaps in annual per-pupil expenditures among Michigan school districts, which the state estimates range from $2,500 to $9,000.
According to a Senate Fiscal Agency analysis, the new law will raise $27.2 million in the fiscal year that began Oct. 1 for redistribution to the 390 less-wealthy districts in the state, amounting to an average per-pupil increase of $23.20. In 10 years, the agency estimated the plan will raise $340 million for redistribution, representing an increase of $290 per pupil.
However, the new law does not completely please school-finance reformers in the stte. Richard Wilson, chairman of a coalition of poor school districts seeking to challenge the constitutionality of the state's school-funding formula, said his group supports the tax base-sharing plan, but added that it does not go far enough.
"If we're going to solve the school-funding problem in this state, it's going to take more than this," he said.
On the other end of the spectrum, William Bedell, superintendent of Romulus Community Schools in subburban Detroit, has said he has asked attorneys to research whether a lawsuit challenging the taxbase sharing plan is feasible. Mr. Bedell has estimated his district could eventually lose up to $700,000 a year in new property tax collection under the law.