Michigan Schools Spent Less Per Student Than in 2002, Even As State Claims Record Funding

The Numbers Don't Add Up

Across West Michigan, from Grand Rapids to Kalamazoo, Muskegon to Holland, parents and educators are hearing a consistent message from state officials: Michigan schools are receiving record funding. But when you adjust for inflation and look at the full historical context, the numbers tell a different story.

In inflation-adjusted dollars, Michigan schools actually spend less per pupil today than they did in 2002, according to a new report from the Education Policy Innovation Collaborative (EPIC) at Michigan State University. This has contributed to lower student achievement on standardized tests, according to the report.

The current state education budget provides school districts with a $10,050 per-pupil foundation allowance, and the governor is proposing raising that to $10,300 in next year's budget. While this represents improvement over the past decade, it remains significantly short of the 2002 peak, according to the EPIC report.

A Decade-Long Decline

The trajectory of school funding in Michigan reveals a troubling pattern. In 2002, Michigan's School Aid Fund provided school districts with an average of $13,858 per student, adjusted for inflation. Over the next dozen years, school funding steadily declined before reaching its low point in 2014.

Recent increases in school funding have made up some ground, but inflation has eaten away at them. The state is no longer at the lowest funding level in history, but funding remains 32 percent below that early 2000s peak, according to MEA Labor Economist Tanner Delpier. That gap amounts to approximately $10.4 billion.

The Myth of Record Funding

Michigan voters are likely to see the phrase "record school funding" in campaign mailers from both political parties this election year. The difference will be in perspective. One side will use the term to tout recent gains in school funding as a point of pride in better supporting educators and students. The other side will use it as a weapon to attack schools for not achieving better test scores.

The truth is school funding saw much-needed increases over Gov. Gretchen Whitmer's tenure. It's accurate to say, in nominal dollars, the state achieved historic school funding. But the claim of "record school funding" is misleading — not only because it fails to account for inflation, but because it completely ignores the historical context before 2012, when school funding in the state hit rock bottom.

When compared to bottomed-out K-12 spending achieved by Snyder and a Republican-controlled state Legislature in 2014, significant increases led by Whitmer — especially in the past three years — appear as unprecedented. But pulling back the curtain from 2012 to 2002 reveals the true trendline: a massive decline that has not yet been restored.

Unstable Categorical Funding

To help address the achievement gap affecting schools and students with extra needs, state leaders have dedicated an increasing share of total state education funding toward categorical grants. These restricted funds may only be used for certain purposes, such as extra support for struggling students, mental health resources, school safety, transportation costs, and more.

The problem is that this funding is extremely unstable and can swing back and forth every year, depending on the political climate. That makes it nearly impossible for schools to plan for even the near-term future. For instance, a million-dollar categorical grant awarded to a school district to hire more school social workers and paraprofessionals can be eliminated the very next year.

Not only is this a logistical nightmare for school districts, but it causes upheaval for students who had access to support one year but not the next. That's not fair to our neighborhood schools, and it's certainly not fair to our kids.

The Research is Clear

As many other states are proving, student success is built on providing schools with a clear and predictable long-term funding system. Funding must also be flexible, since every local school district has different characteristics and needs.

Numerous studies show that investing in preK-12 schools results in better student outcomes — everything from test scores and graduation rates to future educational attainment and wages. The research documents that resource investments matter for student outcomes, especially when they are directed to under-resourced districts and students from low-income families.

The biggest payoffs from investments come toward smaller class sizes and additional supports for younger children and those with greater academic needs, plus ensuring educator quality through higher pay. Sustained improvements in the level and distribution of funding across local public school districts lead to improvements in the level and distribution of student outcomes, ranging from graduation rates to educational attainment and wages.

The key word is sustained. What the research literature tells us is that funding has to be sustained for a period of years before you expect to see impacts on achievement.

What Needs to Happen

Instead of the current funding system, state leaders should gradually implement a research-based weighted formula that assigns a base per-pupil amount to each student, with additional per-pupil funding for students who need more support. By providing a more robust and predictable state funding stream for local school districts, educators can be better equipped to provide students with much-needed stability and meet their individual needs.

After all, every student deserves an opportunity to succeed in school and in life.