Last month 49 states reached a settlement with five of the largest banks in the country on charges of mortgage fraud. The settlement was for $25 billion and Michigan will receive $101 million from the settlement.
On Wednesday, state Sen. Howard Walker, R-Traverse City, said $101 million should go to Michigan's School Aid Fund. We wish we had thought of it first because of the rationale Walker uses.
The senator, who chairs the Senate K-12, School Aid, Education Appropriations Subcommittee, represents the 37th district that includes Presque Isle County.
" Foreclosures have had a severe impact on local school operating revenue, and to fulfill the obligations the state has under Proposal A, a great deal of School Aid Fund revenue has had to be provided by the state to keep districts whole," he said. "Because of this, using this money from the foreclosure settlement for school funding is certainly a legitimate use, and I think it's the best use.
Much of the funding schools receive comes from millages from assessments of taxable value of homes. As home values have dropped and as foreclosures have risen, the money generated from those millages has decreased.
While $101 million is a lot of money, when put into the grand scheme of all the school districts in Michigan both big and small it might not be a significant amount. However, it's an amount those districts currently don't have. There are other entities that certainly could use the funding as well, but if it is divided up among different agencies, its impact is minimized drastically and likely won't make any difference at all.
With all the hits schools have taken over the last few years, and the increased pressure of making sure they are best preparing our students for the future, Walker's suggestion makes all the sense in the world.