Sinking Fund Expansion Passes Senate, On to the Governor

Jennifer Smith

By Jennifer Smith, MASB Director of Government Relations

DashBoard, Oct. 26, 2016

Last week, the Senate unanimously passed House Bill 4388, which will expand the uses for sinking funds. This has been a legislative priority of MASB’s for many years and we are excited to finally see this policy head to the Governor’s desk for approval.

HB 4388 will expand the use of sinking funds to include school security and technology improvements. The maximum millage rate will be capped at three mills and the maximum number of years to levy will be 10. This will apply to any sinking fund passed after the effective date of the law. Existing sinking funds will continue under the current law until they expire. Once signed, it will go into effect 90 days after the end of session this year, most likely in mid-March.

The terms “security improvement” and “technology” are defined within the bill as well. Security improvements mean metal detectors, locks, doors, cameras and other items, but not personnel or operating costs related to those improvements. Technology is defined in the Revised School Code, and includes the hardware and communication devices and the costs of design and installation, as well as the initial purchase of software, among other things.

While we know that being able to use sinking funds for buses and transportation costs is also a priority, those options were not included in this proposal. The compromise that was struck between the school and business communities was fragile, and any attempts at changing the agreement could have sunk the entire bill. Therefore, we made sure legislators knew that this was an issue we would like addressed, but that we would fully support the bill “as is” in order to get the expanded uses. The fight to include buses will continue.

Because you have worked so hard for so long to get this passed, we want to thank you for your efforts and suggest that you contact your legislators and thank them for their support and vote on HB 4388. The bill was passed unanimously in the Senate and with only one “no” vote (Rep. Rose Mary Robinson, D-Detroit) in the House.

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