Legislature Allows PSAs and ISDs to Receive Regional Enhancement Millage Revenue

Public Act 23 of 2018 amends Section 705 of the Revised School Code to allow public school academies (PSAs) and intermediate school districts (ISDs) to re­ceive a portion of the revenue generated from a re­gional enhancement millage approved or renewed on or after May 15, 2018.

With ISD-wide voter approval, the Revised School Code allows an ISD to levy a “regional enhancement millage” of up to three mills and distribute the revenue to its constituent schools. Regional enhancement millage revenue supplements the general fund and, unless the ballot states otherwise, is not limited to a specific pur­pose. Previously, regional enhancement revenues could only be distributed to an ISD’s constituent school districts (i.e., traditional public schools).

PA 23 amends the statutory definition of “constituent district” to include a PSA operating a site within the ISD’s boundaries, provided the PSA counts in membership students enrolled at that site. For a cyber school to be considered a constituent district, the school’s administrative offices must be located within the ISD and all of its students must be ISD resi­dents. An ISD may also be considered a constituent district if it counts in membership students who are not otherwise counted by another school.

Notably, a PSA is not considered a constituent district if: (1) its two most recent audits indicate suc­cessive unresolved material findings, or (2) it does not provide MDE with adequate documentation showing that it operates a legally compliant special education program. Failing to satisfy either of those criterion could exclude an otherwise eligible PSA.

PA 23’s changes do not apply to a millage approved before its effective date of May 15, 2018. But, an ISD must distribute revenue generated from regional enhancement millage approved or renewed by voters after that date to itself (if eligible), school districts, and eligible PSAs based on student count. School officials should also be aware that Michigan law currently requires a regional enhancement millage ballot to name each anticipated revenue recipient.

If you have questions about PA 23 or regional enhancement millage generally, please contact a Thrun Law Firm election attorney.

Municipal Finance & Elections Practice Group