(The Center Square) – There are “no benefits and dramatic costs” to the Invest in MI Kids ballot measure, according to a new study from the Great Lakes Policy Institute.
The proposed measure is a constitutional amendment sponsored by Invest in Michigan Kids. It would add an additional 5% tax on all taxable income over $1 million for joint filers and $500,000 for single filers. This would be in addition to existing state income taxes. It is currently in the process of gathering signatures ahead of the 2026 Midterm Election.
The money raised would go to further fund Michigan’s K-12 schools – an investment that advocates say is much needed.
“Michigan’s children have been paying the price for decades of disinvestment,” said Rachelle, Crow-Hercher from the Invest in MI Kids campaign. “This initiative helps move us closer to ensuring every child—regardless of race, place, or background—has access to the resources they need to succeed.”
Jordan Bruneau, the director of the Great Lakes Policy Institute, spoke with The Center Square in an exclusive interview regarding the institute’s report on the measure. He highlighted some of its concerns.
“The premise behind Michigan’s proposed tax hike is fundamentally flawed,” Bruneau said. “Education funding has skyrocketed over the last decade under the tax status quo. Meanwhile, enrollment and test scores are down. In other words, the dramatic tax hike has no educational benefits and enormous economic consequences.”
The Center Square has reported extensively on these education issues and school funding. Most recently, the state legislature voted for a historic increase in per student funding, raising it to $10,050.
All this comes while teacher salaries have dropped, both since 2020 and since 2002. Bruneau acknowledged that this is a concerning issue, but disagreed that more funding is the solution.
“Everyone agrees Michigan’s countless hardworking teachers deserve higher pay,” he said. “But these raises can come from a mixture of existing funding increases, reducing administrative bloat, ending free lunches for students from high-income families, lower union dues, smaller Chromebook contracts, and revamping health plans whose skyrocketing costs cannibalize pay.”
Currently, the top tax rate in Michigan is 4.25%. The Invest in MI Kids ballot measure would raise that by 118% to 9.25%, making Michigan’s state income tax the seventh-highest in the nation.
Additionally, the report found that the rate would be even higher for residents in some cities, like Detroit, Grand Rapids, and Lansing, where there are already municipal income taxes. There, the top tax rate would rise from 9.25% to around 11%, making Michigan one of the highest-tax states in the nation.
“Activists know that Michigan voters would never swallow a 118% tax hike on its own, so they claim the funds will go to education to make it more palatable,” Bruneau explained. “But history shows throwing more money at the education-industrial complex will do nothing to improve educational outcomes. If anything, funding and test scores are negatively correlated.”
The Great Lakes Policy Institute is joined by other organizations like Americans For Prosperity, the Michigan Chamber of Commerce and the Small Business Association of Michigan in opposing the measure.
Advocates for the initiative argue against the claim that it would “wreck” Michigan’s small businesses and economy, pointing out that it will only tax the richest Michiganders.
Small business owner Jordan Else from Ann Arbor, testified before the Michigan Board of Canvassers in support of the proposed 100-word summary of the initiative back in August.
“I want to directly address the claim that this initiative is a ‘small business tax’. It’s not. It’s a tax on the very wealthiest individuals, those making more than 99% of Michiganders. The vast majority of small business owners, like myself, won’t be affected at all,” Else said. “What does affect us is the strength of our public schools. We rely on a well-educated workforce, on students graduating with practical skills, and on strong communities that attract families and customers.”
The Detroit Federation of Teachers, the Michigan PTA, and many Democrats have joined the Michigan State School Board of Education in endorsing the Invest in MI Kids ballot measure. They have labeled the tax a “small, fair share surcharge.”
The report found that, including property taxes, this increase in income tax would push the combined federal, state, and local marginal taxes on Michigan’s highest earners to more than 50%.
Supporters say schools are worthy of the increase, which they anticipate will raise upwards of $1 billion in annual funding.
“We can’t get the years back for them when we don’t invest in their education now,” said U.S. Rep. Rashida Tlaib, D-MI. “They deserve to be a priority.”
Bruneau disagreed with the assessment that more money means better outcomes for Michigan’s students, but worried about how the measure would be framed to Michigan voters.
“Every Michigan voter needs to know the facts about state education funding and enrollment before the activist spin machine begins cycling its false narrative, which the media will repeat uncritically,” he said. “The report shows doubling taxes on successful small businesses and families is all economic risk, no reward.”
Michigan would not be the first state to pass such a measure. For example, Massachusetts adopted a similar “millionaire’s tax” in 2022.
