LANSING – A controversial ballot initiative called Invest in MI Kids would amend the Michigan Constitution to bring more funding to public education.

If approved by the voters, the proposal would impose an extra 5% personal income tax on any income earned above $500,000 for single filers and above $1 million for joint filers. 

That would increase the levy from the standard rate of 4.25% to 9.25% for amounts of income above those thresholds. Backers say it would direct badly needed money into public schools, while critics argue it would damage the state’s economy.

Since August, the organization has been collecting signatures in an effort to get the amendment on the ballot for November’s election. 

The organization needs 446,198 petition signatures from voters by July 6 to earn a spot on the ballot. If passed, the new tax rate would go into effect in 2027. 

The initiative began from a larger Michigan campaign called Babies Over Billionaires started in 2018 by the Michigan Education Justice Coalition, a coalition formed around this movement. One member of the coalition is 482 Forward, which works toward improving Detroit education. 

Imani Foster is a graduate of Detroit schools who now serves as the communications and research director for 482 Forward. 

She says the citizen-led Invest in MI Kids initiative came after advocates became fed up with working alongside elected officials. 

“I think that is just a really great starting point for us to improve the $4.5 billion deficit that our schools are in,” Foster said. 

Foster says she felt the lack of funding as a student in Detroit in 2018. 

“I went to school and had permanent subs when I was in high school,” Foster said. “I went to school and I didn’t have all the resources that I needed. I went to school and had classrooms of 35 students.”

The organization has recruited a large group of petition circulators by giving presentations to political groups. 

That’s how Kate Gallup of Maple City found out about the effort.

“I was out in D.C. and ended up meeting with a group called Fund MI Future, which focuses on tax reform in Michigan,” Gallup said. “They invited me into being a circulator for the Invest in MI Kids initiative.”

With a background in engineering and government, Gallup taught high school math at the Leelanau School and is running for a state Senate seat in a district that covers the northwest portion of the Lower Peninsula and the eastern region of the Upper Peninsula.

“They didn’t have someone directly up here in Northern Michigan,” Gallup said. “When they were first starting out, they were doing information sessions with local groups, various Democratic groups and others. I said, ‘Yeah, I’m local. I’ll go give those presentations.'”

Gallup says she has always believed in additional money for public schools, but became especially concerned after noticing a lack of funding compared to other states. 

“In inflation-adjusted dollars, there’s been a drop in funding, even as we’ve seen that dollar amount increase recently,” Gallup said, referring to a bump in state appropriations for public schools that passed last year.

“I’ve read that in the last 50 years, we’ve seen Michigan have some of the lowest levels of school funding increases compared to other states across the nation,” she said.

The National Education Association released a report last April stating that Michigan’s average per-pupil funding was $14,489, far lower than the national average of $16,990. 

Advocates of the initiative claim it could bring over $1 billion to public schools each year. 

Many organizations have endorsed the proposal, including the Michigan Parent Teacher Association, Michigan Education Justice Coalition and the Detroit Public School Board.

But other groups oppose the initiative, citing fear of the economic repercussions that it could bring. 

The Detroit Regional Chamber of Commerce is one of these critics.

Brian Shoaf, its vice president for public policy and business advocacy, said the tax increase would adversely affect some small and mid-sized family businesses that are set up to treat business income as the owners’ personal income.

The Michigan League for Public Policy, an advocacy and research group, reports that 86% of Michigan businesses are registered as pass-through or flow-through entities and are subject to personal income tax rates rather than corporate rates. 

Shoaf predicted that the initiative would have drastic effects on the state’s economy by increasing expenses for small businesses, leading to higher prices and fewer jobs.

“We’re talking about a loss of upwards of 43,000 jobs here in Michigan. We’re talking about people leaving the state,” Shoaf said. “We want to make sure that when businesses are looking to expand, they’re looking for new places to locate, that Michigan is that place they look to.” 

He said the proposal would put Michigan with “the Californias, the Washington, D.C.s, the New Yorks of the world” for tax rates. 

When it comes to income taxes, supporters like Gallup disagree. 

“As an income tax surcharge, it is only on the amount made over the $500,000 or $1 million,” Gallup said. “Thus, a single filer making $600,000 would pay the current flat income rate on the full amount, plus an added 5% on $100,000.”

Foster says that she doesn’t worry that the amendment will drive people out of Michigan because of a similar initiative in Massachusetts that went into effect in 2023.

“When we’re able to provide quality public resources, quality public schools, it just makes a state better,” Foster said.

EDITOR’S NOTE: Lilly Williams began reporting news at 15 for her high school newspaper in Stockbridge, Michigan. Her journalistic interests include people-focused stories, international news and news video production. Lilly’s favorite part of journalism is the constant exposure to diverse ideas and information. She has also written for Impact 89FM.