The legislature then gave voters the option of raising either the state sales tax or, by default, income and business taxes. The most significant reform was the charter school legislation. Shortly after its passage, however, the teachers unions and the American Civil Liberties Union filed a lawsuit claiming that charter schools were unconstitutional because they would use state funds but would not be regulated by the State Board of Education. The governor and the legislature responded by drawing up new legislation with stricter state regulations. It allows state public universities and community colleges, intermediate school districts, and local school districts to create the public school academies.
Universities have the greatest flexibility and are free to enroll students from across the state.
Although there is a limit on the number of charter schools the universities may create, there is no cap on the total for the state as a whole. Teachers in charter schools are retained according to performance and do not enjoy tenure rights or guaranteed employment after four years. Charter schools are eligible for state funds equal to the lesser of the state or district average per-pupil expenditure. Michigan law does not permit the waiver of statutory requirements. The State Board of Education may waive the application of an administrative rule, however, if the applicant can meet its intent in a more effective, efficient, or economical manner, or if the waiver can stimulate student performance.