MSU study: Michigan school funding lower now than 25 years ago

By: - January 24, 2019 9:00 pm

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Some 25 years after Michigan dramatically changed how it funds its public schools, a new study suggests that financial investment has declined more sharply here than in any other state.

A Michigan State University report found that after adjusting for inflation, Michigan’s education funding in 2015 was only “82 percent of what it was in 1995 — worse than any other state.”

“Michigan has tried to improve schools on the cheap, focusing on more accountability and school choice,” said David Arsen, MSU professor of education policy and lead author of the study. “To make those policies effective, they have to be matched with adequate funding. We have been kidding ourselves to think we can move forward while cutting funding for schools.

“We don’t have to wait any longer,” Arsen continues. “We know that this isn’t working.”

Arsen details a plan to transform K-12 funding in, “Michigan School Finance at the Crossroads: A Quarter Century of State Control,” co-authored by MSU doctoral students Tanner Delpier and Jesse Nagel.

The report also provides a comprehensive overview and analysis of trends since the 1994 passage of the landmark Proposal A law, which largely shifted funding from local school districts to the state and raised the state sales tax from 4 percent to 6 percent to fund public schools.

When adjusted for inflation, total education revenue has declined by 30 percent since 2002 At the same time, Michigan ranks at the bottom for growth in math and reading proficiency, the study noted.

Rep. Jon Hoadley (D-Kalamazoo) tweeted that inflation is rarely raised in budget debates.

About 74 percent of the decline, the report said, was due to state cuts in per-pupil spending. That declined by 22 percent during the 2002-15 period.

That time frame includes Michigan’s decade-long recession, but cuts continued during the recovery, as well.

The study’s release comes only weeks after now-former Gov. Rick Snyder and Republican lawmakers passed a budget supplemental in the Lame Duck session opposed by several education groups. The spending plan shifted online sales tax revenue from schools to support enhanced roads and environmental cleanup efforts.

Gretchen Whitmer | Ken Coleman

Education cuts were a big issue during the 2014 campaign when Snyder was up for re-election. Even after cutting per-pupil funding in 2011, his first year in office, Snyder aggressively denied chopping education spending and succeeded in muddying the waters.

New Gov. Gretchen Whitmer, a Democrat who took office earlier this month, campaigned on “keeping School Aid Fund money in K-12 and restoring the School Aid Fund to its intended constitutional purpose.”

“Our goal is to provide information, from a long period of research and observation, that will guide a re-evaluation of the way we fund schools,” Arsen said.

The authors support the Michigan School Finance Research Collaborative’s estimated base cost of $9,590 to educate a typical student to meet state performance standards and recommend additional funding weights for students living in poverty, English language learners and special education students. They also estimate the additional revenue needed to implement these policies, including universal preschool.

“Citizens will support providing additional funding to schools if they know how the money will be spent, and they believe the revenues have been raised fairly,” Arsen said. “Providing those resources to schools is well within reach of the state in our current economy. This is what’s necessary to establish the foundation for the important work of teaching and learning.”

David Arsen | Michigan State University

Additionally, Michigan covers less than one-third of the costs for federally required special education, which means school districts devote, on average, $500 per student of general education dollars each year to pay for those services.

Students from low-income families now account for half of all students, but per-pupil state support for them has dropped even more sharply, by 60 percent.

The Tri-County Alliance for Public Education (TCA), a coalition of Macomb, Oakland and Wayne county school superintendents, agree with the study’s principal suggestion that calls for a larger financial investment.

Michigan Capitol | Susan J. Demas

“Lawmakers need to stop hiding behind talking points that claim they are investing in our schools when the reality is our funding hasn’t even kept up with the rate of inflation, let alone the increased cost of the services we are being asked to provide our students,” said George Heitsch, TCA president and superintendent of Farmington Schools.

“When you see the numbers from this report showing the drastic funding cuts that have been forced on our schools in recent years, it should be no wonder why our state ranks at the bottom in reading and math proficiency. This simply has to change because our students deserve better.”

The report evaluates the 2018 study by the Michigan School Finance Research Collaborative (MSFR) and advances a comprehensive set of policy recommendations, including:

  • High-quality preschool for all four-year-olds and at-risk three-year-olds funded at $14,155 per student.
  • Base funding for all K-12 students in district and brick-and-mortar charter schools of $9,590. This does not include transportation or capital facility costs, and only includes employee retirement costs at 4.6 percent of wages and salaries.
  • Increase funding for students with special needs.
  • Funding for student transportation and employee retirement above 4.6 percent of wages and salaries outside of schools’ base funding and centered on the actual costs of both faced by districts and charter schools.
  • Establishment of a state guaranteed-tax base program to subsidize infrastructure costs in low-property-wealth districts. Since charter schools would be unable to access facility subsidies through a Guaranteed Tax Program program, the state should establish a categorical grant to subsidize charter school rental payments.
  • Search for additional revenues that observes standard economic criteria for “good” taxes, including efficiency and fairness.
  • Re-examine the merits of tax expenditures that have proliferated over time, including many that impact revenues available for public schools. These include tax exclusions, deductions, deferrals, and credits that benefit specific activities or taxpayers.
  • Restoration of voter-approved local district enhancement millages to provide communities with a measure of influence over funding. The state could cap the number of enhancement mills and offset their potential to increase inequality by incorporating an equalizing component among districts that pass enhancement millages.

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Ken Coleman
Ken Coleman

Ken Coleman covers Southeast Michigan, economic justice and civil rights. He is a former Michigan Chronicle senior editor and served as the American Black Journal segment host on Detroit Public Television. He has written and published four books on black life in Detroit, including Soul on Air: Blacks Who Helped to Define Radio in Detroit and Forever Young: A Coleman Reader. His work has been cited by the Detroit News, Detroit Free Press, History Channel and CNN. Additionally, he was an essayist for the award-winning book, Detroit 1967: Origins, Impacts, Legacies. Ken has served as a spokesperson for the Michigan Democratic Party, Detroit Public Schools, U.S. Sen. Gary Peters and U.S. Rep. Brenda Lawrence. Previously to joining the Advance, he worked for the Detroit Federation of Teachers as a communications specialist. He is a Historical Society of Michigan trustee and a Big Brothers Big Sisters of Metropolitan Detroit advisory board member.