October 23, 2025
What are the types of school funding?
In Michigan, districts manage daily operations and long-term infrastructure through three main funds: the General Fund, which covers everyday expenses like staff salaries and classroom resources; the Sinking Fund, a voter-approved millage for facility upgrades; and the Bond Fund, voter-approved bonds which finances major capital projects and upkeep, such as new buildings or large-scale renovations.
1. General Fund (operating expenses)
- Funded by 6 mills of State Education millage assessed to all districts in the state. This was a result of Proposal A in the 1990's.
- Funded by 18 mills of voter-approved, non-homestead millage which is the portion of the per-pupil foundation allowance that the district is responsible for contributing towards.
- Usage: Day to day operations. Includes wages, benefits, purchased services, supplies, utilities, etc.
- Does not provide enough money for capital improvement.
2. Bond Fund (capital improvements)
- Voter approved.
- Bonds are sold. Proceeds from those bonds pay for capital improvements/additions in the district.
- Legally not allowed to use bond proceeds to pay for day-to-day operations.
- Currently requires 7 mills of debt millage for debt repayment.
- Allows the district to maintain facilities and focus the General Fund dollars on teachers, staff, and the classrooms.
3. Sinking Fund (capital projects over time)
- Voter approved. Currently funded by 0.4662 mills.
- Can be used for replacement of failing equipment, paving, and construction projects.
- "Safety Net" that allows the district to take care of upkeep and improvements without having to use General Fund dollars. Keeps General Fund dollars focused on the classroom.
