Michigan School Funding: Crisis and Opportunity

Michigan’s
School
Funding:
Crisis and
Opportunity
edtrustmidwest.org | 2020
Introduction
By Amber Arellano
Executive Director, The Education Trust-Midwest
O
ver the last decade, The Education Trust-Midwest (ETM) has been leading a major campaign
to make Michigan a top ten education state for teaching and learning and educational
performance for all groups of students, no matter who they are or where they live. The
Michigan Achieves! Campaign has been hugely successful in many respects. In partnership
with many public leaders, organizations and stakeholders, our organization has taken bold
action, leading to policy change; effective coalitions; major new strategies and investments in critically
needed levers for improvement such as third-grade reading; and new civic infrastructure designed to
build educators’, parents’, policymakers’ and other stakeholders’ capacity to play a role in improvement
efforts for all students to succeed. And we have inspired many others to take action, too.
The need for this campaign has arguably never been greater. Michigan ranks sixth from the bottom in
improvement for 4th grade math among all students from 2003 to 2019, according to recently released
data from the 2019 National Assessment of Educational Progress (NAEP). Compared to other states,
Michigan ranks fifteenth from the bottom for improvement in 4th grade reading from 2003 to 2019,
according to the NAEP, also known as the Nation’s Report Card. With such low rates of improvement, it
will be difficult for Michigan to reach its top ten goals for both educational progress and performance.
Gaps in achievement and opportunity continue to be stark between students in the state, as well.
Average scores for low-income, Latino and Black students in Michigan are lower than their higher-
income and White peers, according to the national assessment, and Michigan falls below the national
average for low-income and Black students in 4th grade reading and 8th grade math.
Never before, though, has our organization focused so deeply on school funding as we do in this new
report, Michigan’s School Funding: Crisis and Opportunity. And that has been for good reason: money
alone is insufficient for educational transformation, as leading education states demonstrate. As a data-
driven, research-based policy, research, advocacy and technical assistance organization, we follow the
2
INTRODUCTION
data. And the data tell us that many factors — not simply money — are important for driving dramatic
improvement in student learning outcomes, especially for low-income students and children of color.
Yet money matters. And that, too, is clear based on research. Money especially matters for students
from low-income backgrounds. Increases in spending have been shown to improve educational
attainment, lead to higher wages and reduce poverty in adulthood, particularly for students from
low-income backgrounds.1 By one estimate, the lifetime earnings of Michigan’s current K-12 students
could increase by $27 billion if their educational achievement matched the national average.2 In a
state that is rebuilding and transitioning its economy and tax base from a manufacturing-based,
old economy model to a robust knowledge-based economy, there is perhaps no more important
investment to make to ensure our Great Lakes State becomes a Great Education and Great Economy
State — and catches up with the
rest of the nation and the world both
economically and for talent.
“By one estimate, the
“
It’s also increasingly clear Michigan’s
high-poverty public schools and lifetime earnings of
districts do not have the resources
they need to educate and support
Michigan’s current
their students to learn at high levels. K-12 students could
A recent report from the Education
Law Center gave Michigan a “D”
increase by $27 billion
for how well it targets funding to its if their educational
high-poverty districts, relative to its
low-poverty districts.3 Similarly, an achievement matched
analysis by The Education Trust —
our organization’s respected national
the national average.”
division — found that Michigan
ranks in the bottom five states
nationally for funding gaps that negatively impact students from low-income families.4 Michigan’s
funding of special education is also highly underfunded as special education services are often times
partially funded with dollars intended for all students.5 Despite Michigan having one of the highest
rates of concentrated poverty in the country,6 the state’s current funding system does not provide
funding specifically for districts with high concentrations of students from low-income backgrounds.
What’s more, Michigan is one of only 16 states providing less funding to its highest-poverty districts
than to its lowest-poverty districts.7
3
MICHIGAN’S SCHOOL FUNDING: CRISIS AND OPPORTUNITY
Michigan’s funding system is not only unfair and deeply inequitable; it’s also inadequate. Michigan’s
system of school funding is, simply put, not designed to keep pace with the costs and realities of
modern U.S. educational systems today. A report from Michigan State University (MSU) found that
between 1995 and 2015, Michigan had the lowest total education revenue growth of all 50 states.8
MSU researchers found when adjusted for inflation, Michigan’s per-pupil funding declined by 22 percent
between 2002 and 2015.9
As the public dialogue about school funding has grown in the state, much of the conversation has been
focused on adequacy. Yet fairness and equity in school funding also are central to the vital conversation
about the state’s future — and the future of thousands of low-income and other vulnerable students,
whether they live in the Upper Peninsula or the shores of West Michigan, Pinconning or Pontiac, Warren
or Wyoming. Indeed, Michigan’s education crisis provides a rare historic opportunity to make the system
more fair and equitable and to overcome decades of historic inequities.
It’s clear Michigan needs to invest

much more in all of its students
“It’s clear Michigan
“
statewide, while investing
significantly more in the students needs to invest much
who need it most whom we highlight
in this report.
more in all of its
More than a year ago, Ed Trust- students statewide,
Midwest partnered with national while investing
organizations including our own
national office to dig deeper into significantly more
Michigan’s funding system and
proposals to improve it. We are glad
in the students who
to share this report with the goal of need it most whom we
providing stakeholders with a set of
nonpartisan, research-based guiding
highlight in this report.”
principles which Michigan leaders,
policymakers, families, educators and
other stakeholders may use to evaluate funding systems and proposals. This report also shares analyses
of the current funding system and how well it is structured to serve Michigan’s students, schools and
districts — particularly vulnerable student groups and high-poverty schools — and provides important
nonpartisan recommendations for Michigan at a crucial time in its history and the future of the state’s
public school system. Finally, we highlight lessons learned from states around the country — including
4
INTRODUCTION
the nation’s leading education states — to inform the policy conversation in Michigan.
Indeed, the lessons learned from other states around the country are critical. Much important work has
been done on equitable funding in other states for decades, as well as in recent years. Long heralded
as one of the nation’s leading education states for performance for all students, recently Massachusetts
leaders passed legislation that commits to significantly increasing state investment in the highest-need
districts in coming years. In fact, when the law is fully implemented, the Commonwealth’s highest-
poverty districts will be expected to — and receive state support to — spend about 100 percent more
per low-income student than per non-low-income student. Importantly, the legislation also requires
all districts to take steps to address disparities in opportunity and achievement between historically
underserved student groups and more privileged students. A model for Michigan, it’s also taken
landmark steps for the state to close the funding gap between districts by investing more state dollars
into high-poverty, low tax base districts.
As with any policy change, the states leading work on equitable school funding show that great
intentionality and caution are needed when exploring and making such reforms. In California, for
example, some positive gains have been made yet there have also been consequences, which new data
and a growing number of leaders say are harmful for vulnerable children, in particular.10
Michigan faces a unique opportunity as it faces a real school funding crisis in the state. If done right, an
overhaul of its funding system would provide state leaders and stakeholders with a major opportunity to
make the funding system adequate and equitable.
We hope you’ll join our growing efforts across the state to make Michigan a top ten state for all
students — no matter who they are or their background. Visit michiganachieves.com/take-action to get
more information about events and other opportunities to get involved.
To all of the Michigan educators, parents, partners and stakeholders who are working tirelessly to
support children’s teaching and learning, many thanks! We appreciate you and we stand by your
efforts.
Onward,
Amber Arellano
Executive Director
The Education Trust-Midwest
5
Summary: Principles for Fair and Equitable
Funding Systems or Proposals
1 Provide funding according to student need.
• Provide at least 100 percent more funding for students from low-income backgrounds.
• Provide at least 75 to 100 percent more funding for English learners (ELs).
• Provide additional funding to support students with disabilities.
• Provide the full amount of additional funding for every category of need that students meet.
• Target resources to high-poverty districts and schools.
2
Provide more funding to districts with lower fiscal capacity.
• Provide equalization funding to low-wealth districts.

• Provide additional funding for rural and sparse districts.
3
Ensure dollars are used well to improve student experience
and outcomes.
• Require districts to spend according to student need.
• Require districts to develop and publish a plan for how they will use funding.
4
Be transparent about the system’s design and monitor funding districts
actually receive.
• Annually publish information about how the funding system is designed to work in clear, plain-language.
• Publish easy-to-follow data on the amount of funding each district should receive according to the state funding
system, compared to what it actually receives.
• Review the funding system to understand patterns in which districts are being underfunded.
5
Provide transparent data on funding going to schools.
• Develop, use and publish consistent rules for calculating spending for all schools in the state.
• Report clear, timely and accessible school and district spending data alongside contextual information to enable
equity-focused comparisons.
6
SECTION TITLE
Executive Summary
M
ichigan’s public education system is facing a crisis by many important measures.
Compared to other U.S. states, Michigan ranks sixth from the bottom for educational
improvement in 4th grade math among all students between 2003 to 2019, according
to recently released data from the 2019 National Assessment of Educational Progress
(NAEP). Michigan ranks fifteenth from the bottom for improvement in 4th grade reading
from 2003 to 2019, according to the NAEP, also known as the Nation’s Report Card. If Michigan public
schools continue to produce such low rates of improvement, it will be difficult for Michigan to reach
its goal of becoming a top ten education state for learning outcomes. In addition, gaps in achievement
continue to be stark between groups of students in the state. Average NAEP scores for low-income, Latino
and Black students in Michigan are lower than their higher-income and White peers, and Michigan falls
below the national average for low-income and Black students in 4th grade reading and 8th grade math.
The state’s crisis is not isolated to student learning outcomes, however. A report from Michigan State
University found that between 1995 and 2015, Michigan had the lowest total education revenue growth
of all 50 states.11 MSU researchers found when adjusted for inflation, Michigan’s per-pupil funding
declined by 22 percent between 2002 and 2015.12
The impact of the state’s relative lack of investment arguably has been felt most by Michigan’s
most vulnerable children, schools and districts. A recent report from the Education Law Center gave
Michigan a “D” for how well it targets funding to its high-poverty districts, relative to its low-poverty
districts.13 Similarly, an analysis by The Education Trust — the Education Trust-Midwest’s respected
national division — found that Michigan ranks in the bottom five states nationally for funding gaps that
negatively impact students from low-income families.14 Michigan’s funding of special education is also
highly underfunded as special education services are often times partially funded with dollars intended
for all students.15
7
It’s clear Michigan needs to invest
much more in all of its students
“Equity is not the only
“
statewide, while investing
significantly more in the students focus of the report,
who need it most whom we highlight
in this report.
but a central one for
The good news, many leaders and good reason: funding
organizations are taking an interest inequities contribute to
in improving Michigan’s public
education funding system. Governor major gaps in learning
Gretchen Whitmer is among the
leaders who have identified this
opportunities for
policy issue as a central one to the students from different
state’s future. More recently, Launch
Michigan — a new collaborative of
communities and
organizations anchored by Michigan’s backgrounds.”
business, K-12 and philanthropic
communities of which The Education
Trust-Midwest organization is part — released recommendations in December which highlighted the
need for a more equitable school funding system in the state.16
Given the critical importance of this issue to Michigan’s students, educators and other stakeholders,
our organizations brought together their expertise to produce this report: The Education Trust, a leading
national education nonprofit, which has more than two decades of expertise in equitable educational
resources and outcomes, and The Education Trust-Midwest, a nonpartisan research, policy and
advocacy organization with a decade of expertise in Michigan education policy. We consulted with two
leading national organizations with deep expertise in the area of equitable school funding and state
funding systems, whom we gratefully acknowledge in the Appreciations section of this report.
This report outlines a set of nonpartisan, research-informed guiding principles and a framework for
policymakers, families, educators, community leaders and other stakeholders to evaluate the state’s
current funding system. It also analyzes Michigan’s current funding system and how well it is structured
to serve Michigan students, schools and districts — particularly vulnerable student groups and high-
poverty schools. It also provides nonpartisan recommendations — and guideposts — for Michigan at a
crucial time for the state’s public school system. Finally, it highlights lessons learned from states around
the country — including the nation’s leading states on equitable school funding — to inform the policy
8
SECTION TITLE
EXECUTIVE SUMMARY
conversation about school funding reform in Michigan.
The following questions undergird most conversations about state funding formulas, and are critical
for Michigan to consider when designing or changing its school funding system. While all of these
questions are important, this report focuses on the three questions most critical for advancing the
interests of our most historically underserved students: equity, transparency and accountability.
• Is the system allocating adequate funding to provide a high-quality education?
• Is the system equitable, and does it prioritize funding that truly addresses all students’ needs?
• Is the system predictable and stable so district leaders can anticipate funding levels from one
year to the next, enabling thoughtful multi-year planning processes?
• Is the system flexible to allow district leaders to operate school systems in the ways that
work best for their local context (while also ensuring that the students with greatest needs are
prioritized within districts)?
• Is the system transparent to allow stakeholders to understand whether dollars targeted for
students who experience vulnerabilities actually reach them?
• Is the system designed with levers for monitoring and accountability for the effectiveness
of the state’s investments to ensure vulnerable children are actually being reached and well-
served by greater investment?
As we outline in this report, there are specific actions stakeholders in Michigan can and should take to
fully embed these ideals in the state’s funding system.
Starting on page 16, we outline a set of equitable funding principles — which are informed by research
and national best practices — and we provide corresponding criteria for evaluating how effectively any
state funding system or proposal adheres to these principles.
Please see the Appendix on pages 46-47 for more information and background on this topic.
Beginning on page 17, we evaluate the current Michigan funding system against these principles and
provide recommendations for Michigan to improve equity in its funding system.
Equity is not the only focus of the report, but a central one for good reason: funding inequities contribute
to major gaps in learning opportunities for students from different communities and backgrounds.
State and local funding allocations can have major impacts on the learning conditions in each district,
including the availability of student support and extracurricular activities, the amount of instructional
9
time, the quality of instructional materials, the level of professional support and compensation teachers
receive, and much more. Specifically, increases in spending have been shown to improve educational
attainment, lead to higher wages and reduce poverty in adulthood, particularly for students from low-
income backgrounds.17 By one estimate, if the student achievement of Michigan’s current K-12 students
matched the national average, this could represent over $27 billion greater lifetime earnings for these
students.18
Michigan faces a unique opportunity as it addresses a real school funding crisis in the state. An
overhaul in its funding system would provide state leaders and stakeholders with a major opportunity
to make the funding system adequate and equitable — and to overcome decades of historic inequities
that have had harmful impacts on vulnerable students across every geographic area of the state. If done
right, an equitable funding system could have dramatic benefits for all Michigan stakeholders, from
students to parents, to educators and the state’s economy. If properly invested and utilized, students
would be better equipped through better trained teachers, high-quality instructional materials and
needed supports that can help a struggling student excel.
Through the guiding principles and policy priorities described through this report, Michigan can begin
taking steps in the right direction to provide more fair funding to Michigan schools and a far brighter
future for Michigan students and their public schools.
Guiding policy principles for improving Michigan’s funding system include:
1. Provide funding according to student need.
Researchers estimate that funding systems should provide at least 100 percent more funding for
students from low-income backgrounds than for students from higher income backgrounds.19 Students
in Michigan from low-income backgrounds are supported by an additional 11.5 percent of the statewide
average foundation allowance,20 which, in FY20, was about $960 in additional funds per eligible
student.21 That 11.5 percent is well below what is recommended by research to close opportunity
gaps.22
Other student groups also have additional needs for greater investment and support, whether a student
is an English learner, has a disability or faces another major barrier to learning, such as attending
a geographically isolated public school. These students are found across the state, no matter if the
community and school district is an urban, rural, working class or suburban one.
Consider Burt Township School District, located on the shores of Lake Superior in Michigan’s Upper
Peninsula. The small school district of about 30 students is rural, isolated and 70 percent low income.23
10
EXECUTIVE SUMMARY
Consolidation with another school district is not a viable option, as the nearest neighboring district
is more than 50 miles away in an area that receives an average snowfall of 148 inches.24 Achieving
equity in educational opportunity is far more difficult in a community like Burt Township because of its
demographics and geography, yet the need for its students to receive an excellent education is just as
great as anywhere else in the state.
Or take Wyoming Public Schools, where almost one in every five students is an English learner –
students with limited English
proficiency.25 In addition to the typical
course of study, these students also “An overhaul in its
“
must learn a new language, requiring funding system would
significantly more assistance and
support than a student who is provide state leaders
a native English speaker. These
supports and instruction deserve
and stakeholders with
and need adequate investment to be a major opportunity
done well.
to make the funding
Finally, consider Michigan’s funding
of special education, which also is system adequate and
highly inequitable and inadequate.26 equitable — and to
State (and federal) lawmakers
have shifted most of the funding overcome decades of
responsibility to the local and county
levels, yet Michigan’s funding
historic inequities”
structure precludes local districts
from levying taxes to cover additional special education costs. Under federal law, public school districts
are required to provide a “free appropriate public education” to students with disabilities, in the
least restrictive environment. Meeting the needs of students with disabilities is both important and
expensive. A Michigan State University study found that, in order to fully fund special education costs,
Michigan districts use more than $500 per pupil from general education funds, on average.27 This even
exceeds $1,000 per pupil in some districts. This affects both special education and general education
students because diverting general education dollars to cover the needs and requirements of special
education dollars leaves fewer dollars for pupils overall.28
11
2. Provide more funding to districts with lower fiscal capacity.
Michigan’s current funding formula specifies the state will carry a larger share of education funding
burden for districts with lower fiscal capacity. It is critical that the state take steps to fully implement
this commitment. State equalization funding — meaning the state provides more dollars to low-
wealth districts to close the gap between local revenue and the cost of meeting students’ needs — is
important to counteract local funding inequities. State equalization funding is also particularly important
to ensure that schools and districts serving the most students from low-income backgrounds and other
historically underserved backgrounds are not shortchanged.
As this report outlines, Michigan does provide state equalization funding but there is major room
for improvement. Over time, Michigan should move to a single, per student funding target that is
consistent across every district while also ensuring of funding stability and adequacy for all districts.
Massachusetts provides a model for Michigan for this type of approach toward building a much more
equitable funding system, as we highlight in the body of this report.
3. Ensure dollars are used well to improve student experience and outcomes.
Having the appropriate resources is necessary, but alone it is not enough. To improve student learning
and outcomes, those resources must also be spent efficiently and effectively to drive improved learning
outcomes.
An important first step toward more equitable student funding in Michigan is directing any new
additional resources first towards high-needs schools and districts. The state must also ensure that the
necessary legal and regulatory frameworks are in place to ensure these additional dollars get to the
schools where vulnerable students attend and are spent in ways that improve classroom learning. State
efforts to provide additional funding to support such students will have limited impact if the funds are
not actually used on supports that effectively serve those students. Accountability for districts around
how and where they spend their funds helps districts prioritize the schools and students who need the
most support.
Michigan has some post-spending accountability measures in place that may help in efforts to ensure
that funds intended to benefit students from low-income families and English learners (ELs) are used
to improve student learning experiences and outcomes.29 The state’s system can be strengthened,
including — though not only — by requiring districts to submit spending plans before the money is
spent and that high-quality data is generated to enable evaluating the impact of investments on student
learning outcomes. Much more work should be done on this front to ensure potential investments in
vulnerable students actually reach them and serve them well.
12
EXECUTIVE SUMMARY
4. Be transparent about the system’s design and monitor funding districts actually receive.
Parents, community leaders and educators should be able to monitor the amount of funding each district
actually receives compared to what it should receive according to its state funding system. Additionally,
regular reviews of the funding system to detect patterns and inequities between districts and schools
across the state should be conducted and could help state leaders continuously improve the system.
Indeed, accessible and jargon-free information about state funding systems allows more stakeholders to
meaningfully engage and understand how Michigan funds its schools, how the funding system reflects
the state’s values, and how it meets the needs of students. Improving the funding system’s public
reporting, accessibility and data monitoring could improve public and stakeholder ability to ensure that
schools are being funded as intended, which could increase their confidence in the state’s education
system. Transparency and accessibility should be prioritized at both the district and school levels.
5. Provide transparent data on funding going to schools.
Education funding accounting systems are complicated. States have wide discretion for deciding how
they will categorize expenditures to calculate school-level per-pupil spending numbers. If the decisions
that are made are not documented clearly and shared widely, the public will not be able to use the data
that are reported with confidence and will lack information about funding patterns between districts
and schools in the state.
In this report, we outline the start of recommendations for improved transparency and accountability. By
requiring improved public reporting on how local, state and federal funds are spent by schools — and
strengthening the state’s data, monitoring and accountability systems for school funding — Michigan
would empower parents and other stakeholders to be more involved in school funding decisions. It also
would better reveal ongoing funding gaps and inequities within districts and inform future spending.
13
Michigan’s School Funding:
Crisis and Opportunity
By Ivy Morgan, Reetchel Presume, Mary Grech and Ary Amerikaner*
Principles for Equitable Funding

Funding Systems Reflect Values
A
state’s school funding system is the backbone of its education system. Intentional funding
strategies that are aligned with Michigan’s academic goals for all students, no matter who
they are or where they live, is critical for meeting those goals.
The following questions undergird most conversations about state funding formulas, and are
critical for Michigan to consider when designing or changing its school funding system, including:
• Is the system allocating adequate funding to provide a high-quality education?
• Is the system equitable, and does it prioritize funding that truly addresses all students’ needs?
• Is the system predictable and stable so district leaders can anticipate funding levels from one
year to the next, enabling thoughtful multi-year planning processes?
• Is the system flexible to allow district leaders to operate school systems in the ways that
work best for their local context (while also ensuring that the students with greatest needs are
prioritized within districts)?
• Is the system transparent to allow stakeholders to understand whether dollars targeted for
students who experience vulnerabilities actually reach them?
• Is the system designed with levers for monitoring and accountability for the effectiveness
of the state’s investments to ensure vulnerable children are actually being reached and well-
served by greater investment?
* Ivy Morgan is the Associate Director for P-12 Analytics at The Education Trust; Reetchel Presume is a P-12 Data and Policy Analyst at The
Education Trust; Mary Grech is a Senior Data and Policy Analyst at The Education Trust-Midwest; and Ary Amerikaner is the Vice President for
P-12 Policy, Practice and Research at The Education Trust.
The Education Trust-Midwest’s Executive Director Amber Arellano and Data and Policy Analyst Lauren Hubbard also contributed to this report.
14
SECTION TITLE
PRINCIPLES FOR EQUITABLE FUNDING
The answers to these questions paint a clear picture of the values that a state holds for its education
system, its children and its future vitality.
Yet when making difficult decisions about school funding, it can be easy for policymakers to lose sight
of equity-oriented goals when faced with the reality of revenue constraints, or get lost in the details
through negotiation and reconciliation processes. It can be easy to forget to take a step back and assess
whether the system is allocating dollars in a way that will truly support the students who we know have
historically been underserved and support the schools that have the greatest needs.
However, staying focused on equity-oriented goals and honestly assessing our state’s current funding
system, as well as any emerging proposals to revamp it, are exactly what’s needed to ensure all
Michigan children have the opportunity to have a bright future and that Michigan remains competitive
in a 21st century global economy.
That’s why the principles and analyses in this report are intended to support Michigan leaders and
stakeholders to engage in these ways — to zero in on the importance of equitable funding for our
state’s future and to take an honest look at the current system and key policy levers for improving
equitable funding for vulnerable students across the state.
While all of the foundational questions are important, this report focuses on the three questions most
critical for advancing the interests of our most historically underserved students: equity, transparency
and accountability.
15
Guiding Principles for State Systems
What follows is a set of principles which Michigan policymakers, district leaders, families and
educators can use to evaluate funding systems and proposals.30 Focusing on these principles can
help make sure that any new funding system keeps opportunity for all students front-and-center and
prioritizes improving educational experiences and outcomes for students from low-income families,
English learners, students with disabilities, students of color, and students in rural and sparsely
populated communities. In particular, state funding systems should:
1 Provide funding according to student need;
2 Provide more funding to districts with lower fiscal capacity;
3 Ensure dollars are used well to improve student experience and outcomes;
Be transparent about the system’s design and monitor funding districts actually
4 receive; and
5 Provide transparent data on funding going to schools.
As stakeholders in Michigan continue conversations to change the state’s funding system, it is critical to
understand how the current system measures up against these recommendations.
16
PRINCIPLES FOR EQUITABLE FUNDING
Analysis: Does Michigan’s Current School
Funding System Meet Principles for Fair
and Equitable Funding?
Background on Michigan’s Current Funding System
M
ichigan schools receive dollars predominately through the School Aid Fund in addition
to the General Fund, which are funded through taxes and lottery revenue.31 After
these dollars are collected, they are distributed through a student-based formula to
intermediate school districts (ISDs), districts and charter management organizations
which ultimately allocate the dollars for schools.32
Proposal A was passed in 1994 and laid the groundwork for Michigan’s current funding system. With
Proposal A, Michigan moved away from a funding system primarily based on local property taxes tied to
the property wealth of a school district, towards a system more reliant on state revenues for schools.33
However, current per pupil foundation allowances are largely based on the funding levels districts
received prior to Proposal A’s adoption (which were primarily based on local property taxes), therefore
the impact of property wealth gaps between districts persists under the system today.34
Michigan now largely allocates state and local dollars based on enrollment. The state’s current system
specifies a per-pupil “foundation allowance” for each district, which is a standard dollar amount
assumed to cover basic costs for all students. On top of the foundation allowance, Michigan provides
some additional state funding for students and districts with additional needs. There are several
major components that determine the amount of state and local funding a district ultimately receives,
including the foundation allowance, the state and local contribution, and additional needs.
17
• Foundation allowance: The foundation allowance is the standard dollar amount, set by
the state, assumed to cover basic costs for all students. For FY20, the foundation allowance
minimum was set at $8,111, while the maximum was $8,529 per pupil.35 In FY20, the foundation
allowance for most districts in Michigan (about 84 percent of districts including all charters)
was at the minimum foundation allowance.36 Meanwhile a small number of “hold harmless”
districts (districts that received state and local revenues higher than the maximum allowance
under Proposal A when it was adopted in 1994) are funded above the maximum foundation
allowance. The total amount of foundation allowance funding each district receives is
calculated by multiplying a district’s foundation allowance by the number of students enrolled in
the district.
• State and local contribution: In most school districts, funding from both local and state
sources combine to provide the total amount of foundation allowance funding; districts with
more property tax wealth are generally expected to contribute a greater share of this amount,
and districts with less property tax wealth rely more heavily on the state. Specifically, districts
are expected to contribute the lesser of $18 for every $1,000 of assessed local non-homestead
property wealth or what they contributed in 1993 (before Proposal A was passed), and the state
makes up the difference.37 Additionally, there are some “out-of-formula” districts that generate
enough local revenue to meet or exceed the maximum foundation allowance and therefore do
not receive any funds from the state.
• Additional needs: On top of the foundation allowance funding, the state provides
supplemental funding for additional district and student needs, such as funding for at-risk
students, English learners, students with disabilities, and rural and sparse districts, often
distributed through categorical grants.
Please note: Michigan also receives federal aid each year, which is distributed through separate federal
formulas and programs, intended to be supplemental and targeted, and does not play a role in the
allocation of state and local funding described above. In FY20, 11.5 percent of total district budgets
in Michigan were dollars from federal sources.38 All analyses and recommendations in this report are
focused on state and local revenues, the dollars which Michigan leaders and stakeholders oversee.
While Michigan has made small tweaks to its system over the years, such as typically increasing the
foundation allowance,39 the state’s last overhaul of the school funding system was through Proposal A
in 1994.40 Since that landmark change, Michigan has made some progress towards reducing funding
18
ANALYSIS & RECOMMENDATIONS FOR MICHIGAN
disparities between districts, but
has not yet closed the gaps between “Michigan is still
“
districts that were funded at the
highest and lowest levels, much less among the worst
addressed research-based funding
gaps that would provide substantially
states in the nation for
more funding in the highest need funding equity, ranking
districts. Michigan is still among the
worst states in the nation for funding
among the bottom
equity, ranking among the bottom five states according
five states according to national
research, spending 5 percent less in to national research,
its highest poverty districts than its
lowest poverty districts.41 See chart
spending 5 percent less
on page 30. in its highest poverty
Analysis and
districts than its lowest
Recommendations for poverty districts.”
Michigan
We analyzed Michigan’s current funding system against key equity principles that should be embedded
into every state’s funding system, as described on page 16. Below is an overview of how Michigan’s
funding system measures against 14 indicators aligned with those principles. We use a color-coded
system: full alignment with an indicator earns a “green” rating, partial alignment earns “yellow” and
complete lack of alignment earns “red.”
Our major finding: Michigan’s funding system earns a “green” rating for just one of the 14 indicators,
indicating that it is falling short on almost all metrics of what a high-quality, equity-focused state
funding system should do.
Please see the Appendix on pages 46-47 for the rubric used to determine ratings in the
analysis and a summary of Michigan’s ratings.
19
LEARNING FROM THE LESSONS OF OTHERS AS MICHIGAN IMPROVES SCHOOL
FUNDING
When The Education Trust-Midwest (ETM) launched the Michigan Achieves! Campaign in 2015, we
began calling for an overhaul of Michigan’s school funding system to be weighted for students’ needs.42
Others, including the School Finance Research Collaborative (SFRC) and Launch Michigan, have called for
this approach, as well.
Weighted student funding, also known as student-based budgeting, fair student funding or student-
centered funding, is a funding model that allocates dollars instead of staff or materials based on the
number of students being served.43
This approach is increasingly used across the U.S. to distribute dollars at the school district level. Thirty-
eight states, including Michigan, also have adopted this approach to guide at least some part of their
funding system at the state level.44
Weighted student funding systems can often improve equity, transparency and flexibility in a funding
system. However, if Michigan is going to make a large-scale move towards providing substantial
additional funding through a needs-based, weighted student funding formula, Michigan leaders and
stakeholders must ensure that the right legislative and regulatory frameworks are put in place as a part
of the potential funding change’s initial design and blueprint. This would help avoid the tough lessons
learned in other states who have made major shifts to their funding systems in recent years, such as in
California.
Another way for Michigan to avoid California’s pitfalls is to pilot new systems of accountability, data
collection and monitoring investments for effectiveness at improving student outcomes, especially for
higher needs students, in Michigan.
For recommendations on how Michigan can begin to lay this critical policy groundwork,
please see the report’s funding principles 3, 4 and 5 beginning on page 36, which focus on
accountability, transparency and public reporting.
For more details on the challenges around accountability and transparency faced in
California, please see page 39.
20
1 Provide funding according to student need
PROVIDE AT LEAST 100 PERCENT MORE FUNDING FOR STUDENTS FROM

LOW-INCOME BACKGROUNDS
Why this matters: If Michigan is serious about closing opportunity gaps, it must provide sufficient
funding for schools to meet all students’ needs. Researchers estimate that systems should provide
at least 100 percent more funding for students from low-income backgrounds than for students from
higher income backgrounds.45
Analysis: Michigan provides increased funding for students from low-income backgrounds.46 The
funding formula provides a per-pupil payment of 11.5 percent of the statewide average foundation
allowance for each student from a low-income background.47 That 11.5 percent is well below what is
recommended by research to close opportunity gaps,48 and equated to about $960 in additional funds
per eligible student in FY20.49 In previous years, districts have not received the full 11.5 percent
per eligible student due to insufficient revenue. Please see page 26 for more information.
LESSONS FROM OTHER STATES:

Massachusetts recently enacted a change to its funding system that will provide substantially
more funding to districts to support students from low-income families. The Student Opportunity
Act will use a student-based formula to provide additional funding in increments up to about 100
percent more depending on the level of student need in the district.50
Maryland currently has a funding formula that also allocates about twice as much for
students from low-income families.51 Unfortunately, the state undercuts this great start by
falling short on other principles. See page 42 for more information about how Maryland
leaders and stakeholders are working to build upon this system to better serve
students from low-income backgrounds.
21
RESEARCH SPOTLIGHT:
Upjohn Institute Study Suggests that Students from Low-Income Families Need More than
Double Current Per Pupil Spending
In a 2015 report on Michigan’s funding system, the Kalamazoo-based Upjohn Institute found that in order
to close achievement gaps between students from low-income backgrounds and their more affluent
peers, Michigan would need to provide at least 100 percent more funding for students from low-income
backgrounds, and up to 150 percent more funding in districts with the highest poverty rates.52 Please
see page 27 for more information and recommendations on weighting for concentrated
poverty.
This recommendation is in line with other research.53
Recommendations:
• Substantially increase the amount of additional funding for Michigan students from low-income
families, so that students from low-income families are supported by at least 100 percent more
funding as other students, as recommended by research.54
• Continue to use a definition for students from low-income families that is at least as broad as
the definition currently in use, to ensure that additional funding is allocated for all students
with additional need.
• Ensure that legal and regulatory frameworks are in place to ensure these dollars actually reach
the schools where students from low-income backgrounds attend, are used to directly serve
students from low-income backgrounds, and are spent in ways that improve student learning.
Please see Principle 3 on page 36 for more details.
PROVIDE AT LEAST 75 PERCENT TO 100 PERCENT MORE FUNDING FOR

ENGLISH LEARNERS (ELs)
Why this matters: English learners have particular programmatic and resource needs (i.e. Bilingual
certified teachers) that require more state investment. Research suggests that states should provide as
much as 100 percent to 150 percent more for English learners, so that schools may be equipped to meet
the learning needs of English learners.55
22
Analysis: Michigan provides increased funding for English learners. In FY20, the funding formula
allocated additional funds on a sliding scale ranging from $100 to $900 for each English learner,
depending on the student’s level of proficiency on the state’s English language proficiency (ELP)
assessment.56 The ELP assessment measures whether a student qualifies for language assistance
program services and students’ progress in English language development.57 Students with lower scores
are allocated more funding to address their greater learning needs.
However, this additional $100 to $900 represents only about 1-11 percent more funding.58 This is
substantially lower than what research recommends.59 Furthermore, unlike funding for students from
low-income families, which is provided as a weight, funding for English learners is provided through
flat allotments,60 which, in some cases, can be less transparent and less adaptable to changes in base
funding than weights.
Recommendations:
• Substantially increase the amount of additional funding for English learners, so that English
learners receive at least 75 percent to 100 percent more funding as students who are not
English learners.
• Continue to differentiate additional English learner funding based on students’ level of English
proficiency.
• Move from an approach that provides funding for English learners as a flat allotment toward an
approach that provides funding for English learners via weight, just like students from low-
income background receive.
• Ensure that legal and regulatory frameworks are in place to ensure these dollars actually reach
the schools where English learner students attend, are used to directly serve English learner
students and are spent in ways that improve student learning. Please see Principle 3 on
page 36 for more details.

Maryland’s current funding system allocates about twice as much funding for English
learners.61
Georgia provides about 2.5 times more for English learners.62
23
PROVIDE ADDITIONAL FUNDING TO SUPPORT STUDENTS WITH
DISABILITIES
Why this matters: Students with disabilities are mandated services by federal and state law
regardless of the cost and districts ability to pay. Districts need additional funding to support students
with disabilities and maintain the programs that serve their unique needs. Many states provide
additional funding for students with disabilities, largely based on the severity of the disability. While
the funding mechanism for special education varies from state to state, more than half of all states
allocate funds through some form of per-pupil weight.63
Analysis: Michigan’s funding of special education is highly inequitable and grossly inadequate.64 State
and federal lawmakers have shifted most of the funding responsibility to the local and county levels. Yet
Proposal A precludes local districts from levying taxes to cover additional special education costs.
In Michigan, districts receive funding

for special education students “Michigan’s funding of
“
through partial reimbursements
(up to 75 percent) of the district’s
special education is
approved special education costs highly inequitable and
(including no more than 28.6
percent for total approved costs grossly inadequate.
i.e. personnel costs as well as 70.4
percent for transportation costs).65
State and federal
Michigan is one of only seven states lawmakers have
that uses a reimbursement system to
fund special education.66
shifted most of the
Often, these partial reimbursements
funding responsibility
are provided as a part of, not to the local and county
in addition to, the foundation
allowance. Districts only receive levels. Yet Proposal A
additional special education funding
if the state reimbursement amount
precludes local districts
exceeds the district’s foundation from levying taxes to
allowance. Because of Proposal A,
districts’ are limited in their ability to
cover additional special
fund the remaining special education education costs.”
24
costs because they cannot raise local revenue to do so and ISDs, which comprise one or more counties,
meanwhile, have very unequal ability to raise revenues for special education services. As a result,
districts with higher special education costs may have to rely on general fund revenues to make up the
difference.67 An MSU study found that, in order to fully fund special education costs, Michigan districts
use more than $500 per pupil from general education funds, on average. This even exceeds $1,000 per
pupil in some districts.68 This affects both special education and general education students because
diverting general education dollars to cover the needs and requirements of special education dollars
leaves fewer dollars for pupils overall.69
Recommendation:
• Guarantee the full foundation allowance for each student, plus supplemental funding for
students with disabilities that is based on the actual, full cost of additional supports that the
student needs. This recommendation aligns with recommendations in a MSU report that calls
for greater funding commitment from the state and/or better state equalization funding for
special education.70
25
MICHIGAN CONTEXT:
Revenue Shortfalls Further Reducing

Equity in Spending
In recent years, Michigan has reduced (prorated) funding used to support students, schools and districts with
additional needs.71 For example, in FY19, total population-specific funding was capped at $499 million for
students from low-income families.72 Because the number of eligible students has increased, this amount
was not sufficient to cover the 11.5 percent weight for those students. As a result, districts only received
approximately 9 percent more per student – even less than the already insufficient 11.5 percent provided for in
statute in FY19.73
When revenues are not sufficient to provide the amount of funding prescribed by the system or cuts must be
made, the needs of students from low-income families, English learners and students with disabilities should
be prioritized. States should not cut funding across all districts in a way that punishes high-need districts and
students, for example, by cutting supplemental funds for students from low-income families, English learners
or special education students. Instead, states should first ensure that the highest need districts receive the full
amount of funding they are owed and prorate funding to districts with lower levels of need and greatest ability
to raise local revenue.
26
PROVIDE THE FULL AMOUNT OF ADDITIONAL FUNDING FOR EVERY CATEGORY
OF NEED THAT STUDENTS MEET
Why this matters: Student needs
“Students needs
“
are intersectional and compounding.
For example, a student who is
both from a low-income family are intersectional
and is an English learner has
more — and different — needs
and compounding.
than a student who has just one Therefore, every
of those characteristics. Research
documents well that educational category of need that
costs are associated with student a student experiences
characteristics and needs.74 Students
from low-income families and English should be fully funded.”
learners need different supports to
meet those unique learning needs —
and those supports cost money for districts and schools. Therefore, each student should be fully funded
for every category of need that he or she meets.
Analysis: In Michigan’s current funding system, districts do receive all of the additional funding
allocations for students with multiple categories of need.75 This means, for example, that if a district
enrolls a student from a low-income background who is also an English learner, the district receives
additional dollars from both at-risk funding (because of the student’s low-income status) and English
learner funding.
Recommendation:
• Continue to provide full additional funding for each category of need a student experiences.
TARGET RESOURCES TO HIGH-POVERTY DISTRICTS AND SCHOOLS

Why this matters: Schools and districts with particularly high concentrations of poverty face
compounded challenges in helping their students succeed and consequently require more resources.76
Analysis: Despite Michigan having one of the highest rates of concentrated poverty in the country77
(see map on page 29), in its current funding system, Michigan does not provide additional funding to
27
districts with high concentrations of students from low-income backgrounds on top of the foundation
allowance and any other additional funding received because of student need.78 In practice, the highest
poverty districts in the state receive, on average, $567 or 5 percent less state and local funding than
lower poverty districts, when adjusting for regional differences in cost of living.79 This is in part due to
the fact that state funding to districts is not targeted to high-poverty districts to sufficiently counter-
balance inequities in local funding.
Recommendations:
• Provide additional funding to districts with especially high concentrations of students from low-
income families.
• Ensure dollars intended for low-income students are allocated equitably within the district.

Currently, 23 states use funding formulas that consider the concentration of students from
low-income backgrounds within a district.80 Please see page 21 for more information on
Massachusetts funding model for districts with concentrated poverty. For example,
Texas uses a five-tier model to provide districts additional funding for concentrated poverty.
Each “census block group” in the state is sorted into one of five-tiers based on several factors,
such as household income, household composition and rates of home ownership, among
others.81 The five tiers are assigned different weights, ranging from 22.5 percent of the base
per-pupil amount for the lowest level of disadvantage to 27.5 percent of the base per-pupil
amount for the highest level of disadvantage.82 While these percentages are not high enough
(see Principle 1 on page 21, calling for at least 100 percent additional funding for
students living in poverty), the idea of generating more additional funding for each student
living in poverty in districts where more students are living in poverty is smart. This model is
just one of many ways to target state dollars to address the additional costs of concentrated
poverty.
28
MICHIGAN CONTEXT:
Below, the Education Law Center’s visual depiction of concentrated poverty by state demonstrates that 37
percent of Michigan’s poor students live in high-poverty districts.83 This is one of the highest rates of poor
students living in high-poverty districts nationwide, which is especially concerning because these high-poverty
districts “often lack the essential education resources for low-income students to succeed in school” (page 13).84
CONCENTRATED STUDENT POVERTY, 2017

Percentage of Poor Students Living in High-Poverty (>30%) Districts
Source: Danielle Farrie, Robert Kim and David G. Sciarra, “Making the Grade 2019: How Fair is School Funding in Your State?,” (Newark, NJ: Education Law
Center, November 2019, Figure 5*).
*The figure comes from the Education Law Center’s analysis of Census’ Small Area Income and Poverty Estimates (SAIPE), 2017.85
Note: Map represents the percentage of poor students in the state who live in high poverty (>30% Census poverty) school districts. In orange states, at least
1 in 4 students (≥25%) lives in a high poverty district.
29
-20%
-25%
-30%
UT MN NJ SD GA NC AR DE LA WA MD SC CA IN VA CO OK KY OR MA NM WI NE KS ND AZ CT VT TN MT FL MS PA IA ID WV ME WY NH TX RI MI AL NY MO IL
25%
20%
15%
10%
5%
0%
-5%
-10%
MICHIGAN CONTEXT:
-15%
-20%
MICHIGAN IS ONE OF ONLY SIXTEEN STATES PROVIDING LESS FUNDING TO HIGHEST
-25% UT MN NJ SD GA NC AR DE LA WA MD SC CA IN VA CO OK KY OR MA NM WI NE KS ND AZ CT VT TN MT FL MS PA IA ID WV ME WY NH TX RI MI AL NY MO IL
POVERTY DISTRICTS THAN TO LOWEST POVERTY DISTRICTS
Funding Gaps Between the Highest and Lowest Poverty Districts, By State
25%
20%
15%
10%
5%
0%
-5%
-10% MICHIGAN
-15%
-20%
-25% UT MN NJ SD GA NC AR DE LA WA MD SC CA IN VA CO OK KY OR MA NM WI NE KS ND AZ CT VT TN MT FL MS PA IA ID WV ME WY NH TX RI MI AL NY MO IL
Reading this figure: In Utah, the highest poverty districts receive 21 percent more in state and local funds per student than the lowest poverty districts
(not adjusted for additional needs of low-income students). In states shaded in green, the highest poverty districts receive at least 5 percent more in state
and local funds per student than the lowest poverty districts; in states shaded in red, they receive at least 5 percent less. Grey shading indicates similar
levels of funding for the highest and lowest poverty districts. Note that although all displayed percentages are rounded to the nearest percentage point,
states are ordered and classified as providing more or less funding to their highest poverty districts based on unrounded funding gaps.
Source: The Education Trust, Funding Gaps, 2018
Notes: Hawaii was excluded from the within-state analysis because it is one district. Nevada is excluded because its student population is heavily concentrated in one district
and could not be sorted into quartiles. Alaska is excluded because there are substantial regional differences in the cost of education that are not accounted for in the ACS-CWI.
Because so many New York students are concentrated in New York City, we sorted that state into two halves, as opposed to four quartiles. Though included in the original
publication, data from Ohio are now excluded from this chart because of subsequently discovered anomalies in the way Ohio reported its fiscal data to the federal government.
30

2 Provide more funding to districts with lower
fiscal capacity
PROVIDE EQUALIZATION FUNDING TO LOW-WEALTH DISTRICTS
Why this matters: Districts have different abilities to raise revenue for schools due to differences in

local property wealth. When local property wealth forms the foundation of school funding systems,
it can compound historical inequities that, over decades, have been documented to underserve low-
income communities and communities of color.
It is important for states to equalize funding between low- and high-wealth districts by providing more
dollars to low-wealth districts to close the gap between local revenue and the cost of meeting students’
needs. State equalization funding is also particularly important to ensure that schools and districts
serving the higher needs student groups described throughout this report are not shortchanged.
In Massachusetts, for example, state leaders have not only made a commitment to dramatically raising
the amount the state invests in its districts and schools over the next several years. They have also
committed to directing that investment primarily to high-poverty, low tax base communities to help
eliminate funding disparities between these districts and their wealthier counterparts. Post-industrial
communities such as Springfield and Worcester, for example, expect to receive significantly more state
dollars under the new state funding system. The state’s investment will be based on school district’s
concentrations of poverty so that communities with far higher rates of poverty will be funded at higher
levels — and vice versa.
Analysis: Twenty-five years after the passing of Proposal A, it is clear that Michigan’s approach to
equalization funding has maintained gaps between student groups and communities throughout the
state. While state leaders have taken steps to close gaps over the last decade, those approaches are
not fully closing funding and resource gaps. Across Michigan school districts there are large variations
in per-pupil foundation allowances and a troubling gap remains between the 84 percent of districts
funded at the state minimum and districts funded at or above the maximum foundation allowance.86
Two of the primary mechanisms that Michigan uses to equalize funding are:87
1. State Contributions to Total Foundation Allowance Funding: After determining the total
31
amount of foundation allowance funding a district will receive, the state determines an expected
local contribution (which factors in local property wealth).88 The local contribution is then subtracted
from the total foundation allowance funding amount and the difference is provided in the form
of state education aid. This is good practice because the state is filling the gap between the
total foundation allowance funding amount (i.e., a portion of what the state determines a district
needs to educate its students) and what local revenues can provide; however, inequities persist
because the total foundation allowance funding is calculated using each district’s foundation
allowance, which vary widely and are based on district funding in 1993. For more information
on the allocation of state and local dollars to districts, please see the background on
Michigan’s current funding system on pages 17-19.
2. 2x Formula: Currently, when the state increases school funding, it provides twice as much funding
to districts that are funded at the minimum foundation allowance as districts that are funded at the
maximum allowance. This is known as the “2x formula” and is designed to gradually reduce the gap
32
between districts funded at the minimum and districts funded at the maximum over time. While
this implementation strategy does move the needle in the right direction, it is far too gradual, as
evidenced by the 84 percent of districts that continue to be funded over $400 below the maximum
foundation allowance a quarter century later.89
Recommendations:
• Move to a uniform foundation allowance to eliminate the funding inequities between districts
that are currently built into the funding system.
• Provide equalization funding based on property wealth and income to send additional state
funding to districts that need it most — and ensure that funding is sufficient to fully counteract
difference in local revenue. For example, Massachusetts is now implementing strategies to
close funding gaps between high-poverty, low tax base communities and high tax base, affluent
communities by investing more state dollars in its high-need districts over time, and ensuring
that funding is sufficient to fully counteract differences in local revenue. In the meantime,
Michigan state leaders should prioritize state investments to vulnerable student groups outlined
in this report, as well as high-need districts, in order to close funding gaps and better serve all
vulnerable student groups across the whole state.
DECLINING ENROLLMENT
Providing funding based on the numbers of students in particular student groups is the most direct and
transparent way to provide districts with funding to meet its students’ needs. However, in a state like
Michigan where districts face declining enrollment, population and property values, it can become impos-
sible to manage legacy infrastructure costs based on funding for the current student population.
Currently, rural districts with declining enrollment (if not eligible for additional funding for sparse or
remote/rural districts) receive funding in proportion to a slightly inflated enrollment only if they have less
than 1,550 pupils and the district has 4.5 or fewer pupils per square mile.90
In 2015, the Upjohn Institute recommended that the state provide additional aid to districts that
experience reductions in enrollment greater than 2 percent in a single year. The report suggests that
state aid should include 50 percent of the foundation allowance that these districts lost due to declining
enrollment.91
33
PROVIDE ADDITIONAL FUNDING FOR RURAL AND SPARSE DISTRICTS
Why this matters: Rural and sparse districts lack of economies of scale and have high transportation
costs, which lead to high resource and operation costs. All else equal, these districts require additional
funding to provide the same services to students. In addition, these districts often face compounding
resource challenges related
to teacher recruitment “Expand the definition
“
and retention, and school facilities,
among others.92 of small and remote
Analysis: Michigan provides districts to include
increased funding through various
mechanisms: sparse districts receive
districts outside the
additional funding based on per- Upper Peninsula, as
student allocations set through
annual appropriations; small and
recommended in
remote districts receive additional the School Finance
funding based on predicted costs
developed through local spending Research Collaborative
plans; and in sparse districts that
do not qualify for small and remote
study,91 to allow more
district funding and that have districts to receive the
low and decreasing enrollment,
enrollment counts are slightly
funding they need.”
inflated to generate additional
funding.93
Recommendations:
• Continue to provide additional funds to all low-density and rural districts to account for their
additional transportation needs and lack of economies of scale.
• Use a more transparent and consistent approach, rather than three different funding
mechanisms.
• Expand the definition of small and remote districts to include districts outside the Upper
Peninsula, as recommended in the School Finance Research Collaborative study,94 to allow more
districts to receive the funding they need.
34
MICHIGAN CONTEXT:
State Definitions of Rural and Sparse

Districts95
The state defines small and remote districts as those that serve grades K-12; enroll fewer than 250 students;
and whose schools are located either on the state’s Upper Peninsula at least thirty miles from any other public
school or on islands that are not accessible by bridge. The amount of additional funding allocated to each
eligible remote district is determined under a spending plan developed cooperatively with an intermediate
district superintendent and approved by the superintendent of public instruction.
Sparse districts are those with 10 students or fewer per square mile that are not eligible for small and remote
funding. Michigan appropriated about $6 million for sparse districts for FY20 to be allocated in three tiers.
Districts with fewer than 8 students per square mile received the most, followed by those with between 8
and 9 per square mile, followed by those with between 9 and 10 per square mile. As with other sources of
supplemental funding, if the appropriation for a fiscal year is insufficient to fully fund payments to districts, the
state will prorate payments to districts.
Currently, rural districts with declining enrollment (if not eligible for additional funding for sparse or remote/
rural districts) receive funding in proportion to a slightly inflated enrollment only if they have fewer than 1,550
students and the district has 4.5 or fewer students per square mile.
35
3 Ensure dollars are used well to improve student
experience and outcomes
REQUIRE DISTRICTS TO SPEND ACCORDING TO STUDENT NEED

Why this matters: State efforts to provide additional funding to support students with additional needs
will have limited impact if the funds are not actually used in the schools or on supports that serve those
students. State accountability systems should hold districts responsible for actually closing opportunity
and achievement gaps, which in turn should help districts prioritize the schools and students who need
the most support. At a minimum, states should require any districts that continue to produce these gaps
to show that they are spending substantially more in schools with higher concentrations of student
need.
Analysis: Michigan requires annual post-spending accountability reports, which may aid efforts to
ensure that funds intended to benefit
students from low-income families
“State accountability
“
and English learners (ELs) are used
well to improve student learning systems should hold
experiences and outcomes for those
students. The funds are restricted districts responsible
for use on programs and services to
serve the intended students, such
for actually closing
as low-income students or English opportunity and
learners, and the misuse of these
funds or failing to submit an annual
achievement gaps,
report on the use of funds may which in turn should
result in the state withholding funds
from a district.96 Michigan does not, help districts prioritize
however, actually require that the
schools serving higher concentrations
the schools and
of English learners, students with students who need the
disabilities and low-income students
spend more money than other
most support.”
36
schools — which means that there is no meaningful assurance that the dollars intended to serve these
students aren’t just supplanting other general education funds.
Recommendations:
• Continue to require that districts submit reports explaining how funding for students’ additional
needs — i.e., the funding distributed to support the needs of students from low-income
backgrounds and English learners — was used to improve educational experiences for the
intended students.
• Publish school-level expenditure reports that show that state and local spending is
differentiated across districts and all schools within districts, such that spending increases
substantially as student need increases.
• Pilot state-led accountability mechanisms for ensuring dollars intended for vulnerable students
are actually spent in the schools where they attend, such as requiring more dollars are spent
on schools with higher concentrations of low-income students within districts. If enacted, the
Michigan Department of Education should also provide technical assistance and support to
districts that fail to meet this requirement.
37
REQUIRE DISTRICTS TO DEVELOP AND PUBLISH A PLAN FOR HOW THEY WILL
USE FUNDING
Why this matters: Accountability measures for how funds are used is important to ensure that funding
is spent on evidence-based resources, supports and interventions, and to empower local parents,
families, educators and equity advocates to engage in the conversation. By requiring spending plans,
states can push districts to think strategically about how they will use funding to support students with
additional needs to close opportunity and achievement gaps. Accountability, however, should always be
balanced with flexibility to allow districts to respond to their local needs and contexts.
Analysis: Michigan requires districts to submit reports on how funds were used after they’re spent; it
does not require budget or spending plans before funds are spent.
Recommendations:
• Commit to greater oversight and require that districts to develop and publish plans for how
they’ll use all available funding to meet students’ needs and particularly to support students
with additional needs. District plans should:
¤ Be based on a needs assessment and evidence and/or research.
¤ Be developed in consultation with families and students who have been historically
underserved in the community and community advocates representing those groups,
along with educators and school leaders.
¤ Be designed for a specified time period (e.g. 3 years) and be reviewed and revised at
the end of the time period.
¤ Be based on a set of guiding questions or a template that is developed by the state, so

they are generally consistent across districts.
¤ Include ambitious, time-bound targets for closing opportunity and achievement gaps.
• Publish reviews of district plans and guidance or interventions provided in districts with sub-par
plans.
38
CALIFORNIA’S LOCAL-CONTROL AND ACCOUNTABILITY PLANS
California made major changes to its school funding formula with the goal of improving equity and
flexibility for districts. Some positive changes were made and yet, California is also quickly becoming
a cautionary tale of hard lessons learned — and of policy change that has serious consequences for
vulnerable students and communities in the state.
California’s Local Control Funding Formula (LCFF), enacted in 2013, changed the state’s outdated, complex
and inequitable school funding system and increased funding for serving the state’s students with
additional needs.97 The system also drastically reduced the number of categorical funding streams to
reduce complexity of the system and increase districts’ flexibility for using funds.98
In addition to changing the way that school districts are funded, LCFF included a new strategy for
accountability. Districts are now required to complete Local Control and Accountability Plans (LCAPs) that
describe how they will serve historically underserved groups of students, and engage community members
in the budgeting and planning process.99
LCFF is often cited as a model for other states as an example of a political bargain that provides both
increased funding, increased equity and some oversight for how dollars are used. Some positive outcomes
have been seen: early studies on the effects of the system have shown that increases in per-pupil revenue
have led to increased graduation rates for all students; this effect was particularly prominent for students
from low-income families.100
However — and this is a big however — policy change of such great magnitude comes with great risk —
and California was not able to mitigate the impact of these significant risks for many vulnerable students
and communities. The original policy blueprints did not put the necessary accountability systems — and
appropriate regulatory and legal frameworks — in place up front to ensure the state department and local
stakeholders could track if dollars intended for vulnerable students actually reached them, nor if they had
an impact on student learning experiences and outcomes.
For years, key California leaders and stakeholders have raised concerns that the new accountability, data
and public reporting structures are not strong enough to ensure additional funding is actually being used
to serve the vulnerable students that it is intended to serve.101 An important recent report from the state
auditor confirmed those suspicions:102
“We are concerned that the State does not explicitly require districts to spend their supplemental
and concentration funds on the intended student groups or to track how they spend those funds;
therefore, neither state nor local stakeholders have adequate information to assess the impact of
those funds on intended student groups. …. We also had difficulty determining the extent to which
the districts used those funds to increase or improve services for intended student groups because
of unclear descriptions in their local control and accountability plans.”
The state auditor recommends that the legislature both strengthen the rules for using funding meant to
serve students with additional needs and increase transparency so that it is easier to track spending within
schools and across districts.103
39
4 Be transparent about the system’s design and monitor
funding districts actually receive
ANNUALLY PUBLISH INFORMATION ABOUT HOW THE FUNDING SYSTEM IS

DESIGNED TO WORK IN CLEAR, PLAIN-LANGUAGE
Why this matters: Accessible and jargon-free resources on state funding systems allow more
stakeholders to meaningfully engage and understand how Michigan funds its schools, how the funding
system reflects the state’s values, and how it meets the needs of students.
Analysis: Michigan’s funding system is complex. The state publishes only a limited number of
public documents and reports that summarize the system, and the summaries that exist are often not
understandable by a general audience.104
Recommendation:
• Provide a user-friendly description of how the state’s funding system is supposed to work
to allow more stakeholders to understand how the state funds schools and engage in
conversations about changing the system when necessary.
PUBLISH EASY-TO-FOLLOW DATA ON THE AMOUNT OF FUNDING EACH

DISTRICT SHOULD RECEIVE ACCORDING TO THE STATE FUNDING SYSTEM,
COMPARED TO WHAT IT ACTUALLY RECEIVES
Why this matters: Financial reports that are complete and easy-to-understand allow for cross-district
comparisons and the identification of funding inequities. For example, financial reports can highlight
whether a district is receiving a smaller portion of funding for its students from low-income backgrounds
Alabama,105 Florida,106 Minnesota107 and Montana,108 have all created summaries of their school
funding systems that are easier to read and intended for a general audience.
40
than it should be. This kind of transparent reporting allows stakeholders to see how the funding formula
translates at the district level and to meaningfully engage in conversations about the school funding
system and whether dollars are being distributed equitably across the state.
Analysis: Michigan publishes data on the amount of funding districts receive according to the state’s
school funding system. However, it is often not presented in a way that is easy for many stakeholders to
understand, and does not include comparisons between what a district should receive in state and local
money and what it actually receives or spends. District funding reports often lack the definitions and
context to make the information meaningful to a general audience.109
Recommendation:
• Commit to publishing transparent data on district funding levels, broken down by major sources
of funds. The data should highlight expected revenue amounts according to the state funding
system, actual district and school revenues, and reasons for any variations between the
expected and actual revenues, such as proration or local funding issues.
REVIEW THE FUNDING SYSTEM TO UNDERSTAND PATTERNS IN WHICH

DISTRICTS ARE BEING UNDERFUNDED
Why this matters: Thorough and recurring evaluations of a state’s school funding system facilitates
continuous monitoring and improvement. Review processes can identify provisions in a state’s formula
that produce unintended, equity-undermining consequences. They can also spur changes that correct for
inequities and enhance a state’s school funding system.
Analysis: Michigan does not prescribe a process for reviewing how the state funding system is
working or evaluating whether it is closing opportunity gaps.110 This is a missed opportunity to
encourage state leaders to maintain a modern and functional system that meets the contemporary
needs of the state’s students, schools and districts.
Michigan does have a review process for English learner categorical funds. Starting with FY20, the
state has ordered reviews every three years to ensure funding levels are appropriate and inform
recommendations to the legislature on appropriations.111 Unfortunately, this kind of review process has
not been extended to targeted funding of other vulnerable student groups nor the funding system as a
whole.
41
Recommendation:
• Commit to a regular review of the state funding system by expanding the process currently in
place for evaluating funding for English learner supports to include all school aid funding. In
its expansion, that process should continue to be timely and recurring. This review of actual
revenue, student need and student achievement data, should measure whether funds targeted
for specific student groups did reach the intended students and whether student outcomes are
improving. The review should be conducted by the appropriate state agency or leadership and
validated by an independent, nonpartisan external organization with school funding expertise.

MARYLAND REVIEWS ITS FUNDING SYSTEM
In 2002, when the Maryland legislature passed the Bridge to Excellence in Public Schools
Act, the state made dramatic changes to the state’s education system to simplify the funding
system and provide increased and differentiated funding based on student need and school
districts’ ability to meet those needs.112 The Act restructured Maryland’s public school
finance system and increased state aid to public schools by $1.3 billion over six years. It also
required the state legislature to re-evaluate the adequacy and equity of the funding system
approximately 10 years after the law’s enactment.113
Because a review process was put in place, there was a clear opportunity for the state to
reflect on current practices and make necessary improvements. Despite allocating more
money for students living in poverty and English learners than any other state, at least on
paper, state leaders have work to do to actually deliver on the promise of the formula and
to fix the loopholes that undermine that formula’s good intentions.114 An analysis by The
Education Trust shows that most districts in Maryland do not receive the money the state
says they need, and districts with the greatest numbers of students of color are shortchanged
the most.115
Maryland now has an opportunity to address these concerns. While a few years late, and
not without opposition,116 stakeholders in Maryland (the Kirwan Commission)117 have finished
that review process and have put forth a series of recommendations that will likely be used
to inform sweeping legislation.118
42
5 Provide transparent data on funding going to schools
DEVELOP, USE AND PUBLISH CONSISTENT RULES FOR CALCULATING

SPENDING FOR ALL SCHOOLS IN THE STATE
Why this matters: Education funding accounting systems are complicated. States have wide discretion
for deciding how they will categorize expenditures to calculate school-level per-pupil spending numbers.
If the decisions that are made are not documented clearly and shared widely, the public will not be able
to use the data that are reported with confidence.
Analysis: The Michigan Department of Education has publicly released information related to school-
level financial reporting, including a per-pupil expenditure calculation methodology and definition
document.119 This will potentially allow spending data to be transparent and comparable across schools.
Recommendations:
• Continue efforts to develop consistent calculation rules that will enable apples-to-apples
comparisons of school spending data across all districts in the state.
• Publish those calculation rules in an easy-to-understand and easy-to-find way on the state’s
website.
REPORT CLEAR, TIMELY AND ACCESSIBLE SCHOOL AND DISTRICT SPENDING

DATA ALONGSIDE CONTEXTUAL INFORMATION TO ENABLE EQUITY-FOCUSED
COMPARISONS
Why this matters: Clear and transparent data allows stakeholders to better understand
whether schools serving high concentrations of certain student groups, for example, low-income
students or students of color, are receiving equitable funding. Clear and comparable school-level
spending data can push local education leaders to allocate and spend funds more fairly and help
researchers further understand the relationship between funding and student outcomes.
Analysis: Not applicable; the Michigan Department of Education has not yet reported the data so
we cannot assess the quality of this reporting. The Department will publicly report on school-level
43
expenditures for the first time in spring 2020, using data from the previous school year. If implemented
well, this data can make a real difference and help stakeholders — families, advocates, district and
school leaders — make more informed decisions on behalf of Michigan’s students.
Recommendation:
• When Michigan does report school-level spending data in Spring 2020, the state should do so
in a way that enables equity-oriented comparisons, by allowing users to view spending data
alongside school contextual information such as the percentage of students from low-income
families, and facilitate comparisons between individual schools and groups of schools with
similar and different levels of need.

ILLINOIS ENABLES EQUITY-ORIENTED COMPARISONS IN SCHOOL-LEVEL
SPENDING DATA REPORTS
To date, most examples of states’ ESSA-mandated school-level spending120 reports that we
have seen are not promising. However, Illinois’ newly-released school report card includes
spending data that makes it easier to make meaning of the data. Illinois’ reporting allows
users to view school-level spending data in context with other information about students in
the school, such as the percentage of students from low-income families and the percentage
of English learners.
44
Conclusion
Michigan’s funding system is falling short for all students, especially Michigan’s most vulnerable
children. This means that students who are in most need are not receiving the funding that would allow
them to overcome barriers and opportunity gaps. The state must be committed to investing directly in
under-resourced schools, students from low-income families, English learners and other student groups
who experience vulnerabilities in order boast positive outcomes for all students. As we outlined in this
report, there are specific actions stakeholders in Michigan can and should take to fully embed equity in
the state’s funding system. The time is now.
The Education Trust-Midwest works for the high In 2015, The Education Trust-Midwest launched the
academic achievement of all Michigan’s students, pre- Michigan Achieves campaign to make Michigan a top
kindergarten through college. Our goal is to close the ten education state by 2030. Since then, a growing
achievement gaps in opportunity and achievement for all number of partners around the state have come to work
children particularly those from low-income families or together to advance the best practices and strategies
who are African American, Latino or American Indian. from leading education states to Michigan, in order to
close achievement gaps and ensure every Michigan
As a nonpartisan, data-driven education policy, research
student is learning – and being taught – at high levels.
and advocacy organization, we are focused first and
foremost on doing what is right for Michigan children, Join the movement at www.michiganachieves.com.
working alongside partners to raise the quality of
teaching and learning in our public schools.
Find all of our reports, including examinations of what

works in leading education states, as well as fact sheets
and other information at www.edtrustmidwest.org.
45
Appendix: Rubric
Red Yellow Green Michigan
1. PROVIDE FUNDING ACCORDING TO STUDENT NEED.
Provide at least 100 No consistent source Low weights or Weights in 2-3x range or additional
percent more funding of funding, no weights, additional funding is amount is 2-3 times base amount
for students from low- or very low weights or low compared to base (90%+ of base amount)
income backgrounds. additional funding (0- amount (10-90%)
10% of base amount)
Provide at least 75 No consistent source Low weights or Weights in 2-3x range or additional
percent to 100 percent of funding, no weights, additional funding is amount is 2-3 times base amount
more funding for or very low weights or low compared to base (90%+ of base amount)
English learners (ELs). additional funding (0- amount (10-90%)
10% of base amount)
Provide additional No consistent source of Additional funding that Generous additional funding that
funding to support funding or very limited is not based on student is differentiated based on student
students with additional funding needs. needs
disabilities.
Provide the full State does not provide State provides partial/ State provides the full amount of
amount of additional funding for multiple prorated funding for additional funding for each need
funding for every need categories multiple need categories category
category of need that
students meet.
Target resources to No consistent source Low weights or Weights in 2-3x range or additional
high-poverty districts of funding, no weights, additional funding is amount is 2-3 times base amount
and schools. or very low weights or low compared to base (90%+ of base amount)
additional funding (0- amount (10-90%)
10% of base amount)
2. PROVIDE MORE FUNDING TO DISTRICTS WITH LOWER FISCAL CAPACITY.

Provide equalization No equalization funding Equalization funding Equalization funding based on
funding to low-wealth based on property property wealth and income
districts. wealth
Provide additional No consistent source of Flat weight or additional Additional funding that is
funding for rural and funding, no weights or funding for sparse or differentiated based on district
sparse districts. no additional flat amount rural districts needs and allocated on per-student
basis
46
APPENDIX
Red Yellow Green Michigan
3. ENSURE DOLLARS ARE USED WELL TO IMPROVE STUDENT EXPERIENCE AND OUTCOMES.
Require districts to No requirement Requires reporting on Requires reporting on use of funds
spend according to use of funds that aims to ensure that that
student need. districts and schools with the most
high-need students are getting their
fair share of funding
Require districts to No requirement Requires a plan without Requires a plan with consequences
develop and publish a consequences for non- for non-compliance
plan for how they will compliance
use funding.
4. BE TRANSPARENT ABOUT THE SYSTEM’S DESIGN AND MONITOR FUNDING DISTRICTS
ACTUALLY RECEIVE.
Annually publish System is not System is summarized, System is summarized in clear,
information about summarized (i.e., it’s but the language used is accessible language
how the funding only described through full of jargon and is not
system is designed to legislation language etc.) understandable by a lay
work in clear, plain- audience
language.
Publish easy-to- There is no data There is some data Data are readily available that
follow data on the available or it is not easy available, but it is not clearly show how much funding
amount of funding to find easy to understand districts should receive according
each district should or does not provide a to the system and the amount they
receive according complete picture actually receive
to the state funding
system, compared
to what it actually
receives.
Review the funding No prescribed process or There is a process, but There is an equity-oriented, timely
system to understand requirement it is not timely and/or and recurring (less than 1 year-long,
patterns in which does not aim to ensure every 5 years) process to review
districts are being that districts with the actual revenue, student need and
underfunded. most students from low- student achievement data
income families, English
learners or students of
color are getting their
fair share of funding
5. PROVIDE TRANSPARENT DATA ON FUNDING GOING TO SCHOOLS.
Develop, use and State does not State sets uniform State sets uniform business rules for
publish consistent require districts to business rules for calculating spending and provides
rules for calculating calculate spending in a calculating spending, technical support to districts on
spending for all comparable way (i.e., but does not provide reporting data
schools in the state. there are no business technical support to
rules) districts on reporting
data
Report clear, timely N/A. Michigan does N/A. Michigan does N/A. Michigan does not report
and accessible not report school-level not report school-level school-level spending data
school and district spending data spending data
spending data
alongside contextual
information to enable
equity-focused
comparisons.
47
References
1 C. Kirabo Jackson, Rucker C. Johnson and Claudia Persico, “Boosting Educational Attainment and Adult Earnings: Does School Spending Matter After All?,” EducationNext,
vol. 15 no. 4, Fall 2015. http://educationnext.org/boosting-education-attainment-adult-earnings-school-spending/
2 Kevin Hollenbeck, Timothy J. Bartik, Randall W. Eberts, Brad J. Hershbein and Michelle Miller-Adams, “The Road Toward K-12 Excellence in Michigan: How an Upgraded
Financing System Can Better Support Enhanced Student Achievement,” (Kalamazoo, MI: W.E. Upjohn Institute for Employment Research, May 2015). https://research.upjohn.
org/cgi/viewcontent.cgi?article=1218&context=reports; Note: This analysis is based off of NAEP data from 2013. Based on more recent data trends, MI continues to perform
below the national average on 2019 NAEP performance for both 4th and 8th grade reading and math for all students.
3 Danielle Farrie, Robert Kim and David G. Sciarra, “Making the Grade 2019: How Fair is School Funding in Your State?,” (Newark, NJ: Education Law Center, November 2019).
https://edlawcenter.org/assets/Making-the-Grade/Making%20the%20Grade%202019.pdf
4 Ivy Morgan and Ary Amerikaner, “Funding Gaps: An Analysis of School Funding Equity Across the U.S. and Within Each State 2018,” (Washington, D.C.: The Education Trust,
February 2018). https://edtrust.org/resource/funding-gaps-2018/
5 David Arsen, Tanner Delpier and Jesse Nagel, “Michigan School Finance at the Crossroads: A Quarter Century of State Control,” (Lansing, MI: Michigan State University,
January 2019). http://education.msu.edu/ed-policy-phd/pdf/Michigan-School-Finance-at-the-Crossroads-A-Quarter-Center-of-State-Control.pdf
9 Ibid.
10 Rucker Johnson and Sean Tanner, “Money and Freedom: The Impact of California’s School Finance Reform,” (Washington, D.C.: Learning Policy Institute, February 2018).
https://learningpolicyinstitute.org/product/ca-school-finance-reform-brief; The Education Trust-West, “The Steep Road to Resource Equity in California Education: The Local
Control Funding Formula After Three Years,” (Oakland, CA: The Education Trust-West, April 2017). https://west.edtrust.org/resource/the-steep-road-to-resource-equity-in-cal-
ifornia-education/; California State Auditor, “K-12 Local Control Funding: The State’s Approach Has Not Ensured That Significant Funding is Benefiting Students as Intended to
Close Achievement Gaps,” (Sacramento, CA: California State Auditor, November 2019). http://www.auditor.ca.gov/reports/2019-101/index.html
12 Ibid.
16 Launch Michigan, Recommendations. Retrieved from https://www.launchmichigan.org/recommendations/
17 C. Kirabo Jackson, Rucker C. Johnson and Claudia Persico, “Boosting Educational Attainment and Adult Earnings: Does School Spending Matter After All?,” EducationNext,
vol. 15 no. 4, Fall 2015. http://educationnext.org/boosting-education-attainment-adult-earnings-school-spending/
org/cgi/viewcontent.cgi?article=1218&context=reports; Note: This analysis is based off of NAEP data from 2013. Based on more recent data trends, MI continues to perform
below the national average on 2019 NAEP performance for both 4th and 8th grade reading and math for all students. We would expect, however, that the money students are
missing out on is less given the slight decreases to the national average and slight increase in performance in MI.
19 Bruce D. Baker, Mark Weber, Ajay Srikanth, Robert Kim and Michael Atzbi, “The Real Shame of the Nation: The Causes and Consequences of Interstate Inequity in Public
School Investments,” (New Brunswick, NJ: Rutgers University, April 2018). https://drive.google.com/file/d/1cm6Jkm6ktUT3SQplzDFjJIy3G3iLWOtJ/view; William D. Dun-
combe and John Yinger, “How Much More Does a Disadvantaged Student Cost?,” (Syracuse, NY: Syracuse University Center for Policy Research, July 2004). https://surface.
syr.edu/cgi/viewcontent.cgi?article=1102&context=cpr
20 MCL 388.1631a
21 Note: This figure is 11.5 percent of the FY20 statewide weighted average foundation allowance which was $8,362; State of Michigan, State Aid Foundation Allowance
Parameters. Retrieved from https://www.michigan.gov/documents/sw_fndamts_11719_7.pdf
23 Ron French, “Tiny school districts to Lansing: Stop acting like ‘middle-schoolers,” Bridge Magazine, October 2019. https://www.bridgemi.com/talent-education/tiny-school-
districts-lansing-stop-acting-middle-schoolers; MDE Student Count 2018-19
24 Ron French, “Tiny school districts to Lansing: Stop acting like ‘middle-schoolers,” Bridge Magazine, October 2019. https://www.bridgemi.com/talent-education/tiny-school-
districts-lansing-stop-acting-middle-schoolers
25 MDE Student Count 2018-19
26 Lori Higgins, “Michigan no longer ranks near bottom for special education, but that doesn’t mean students are doing better academically,” Chalkbeat, June 2019. https://
www.chalkbeat.org/posts/detroit/2019/06/27/michigan-is-no-longer-the-worst-state-in-the-nation-for-special-education-but-that-doesnt-mean-students-are-doing-better-
academically/
28 Ibid.
29 MCL 388.1631a; MCL 388.1641
30 Note: The Michigan-specific principle covered in this report are in part adapted from: The Education Trust, “5 Things to Advance Equity in State Funding Systems,” (Washing-
ton, D.C.: The Education Trust, December 2019). https://edtrust.org/resource/5-things-to-advance-equity-in-state-funding-systems/
31 Michigan House Fiscal Agency, “State of Michigan Revenue: State Source and Distribution,” (Lansing, MI: Michigan House Fiscal Agency, April 2019). https://www.house.
mi.gov/hfa/PDF/RevenueForecast/Source_and_Distribution_Apr2019.pdf
32 Michigan Senate Fiscal Agency, “School Aid/K-12 General Overview,” (Lansing, MI: Michigan Senate Fiscal Agency, February 2019). https://www.senate.michigan.gov/sfa/
Departments/Overview/OVk12_web.pdf
33 Kathryn Summers, “The Basics of School Funding,” (Lansing, MI: Michigan Senate Fiscal Agency, February 2019). https://www.senate.michigan.gov/sfa/departments/
datacharts/dck12_schoolfundingbasics.pdf
34 Bethany Wicksall, Jacqueline Mullen and Samuel Christensen, “Basics of the Foundation Allowance – FY 2018-19 Update,” (Lansing, MI: Michigan House Fiscal Agency,
November 2018). https://www.house.mi.gov/hfa/PDF/Alpha/Fiscal_Brief_Basics_of_the_Foundation_Allowance_FY19_Update_Nov2018.pdf
48
REFERENCES
35 State of Michigan, State Aid Foundation Allowance Parameters. Retrieved from https://www.michigan.gov/documents/sw_fndamts_11719_7.pdf
36 State of Michigan, 2019-2020 School District Foundation Amounts. Retrieved from https://www.michigan.gov/documents/cyfound_11728_7.pdf; Michigan Public Act 162 of
2019
38 Michigan Senate Fiscal Agency, School Aid (K-12). Retrieved from https://www.senate.michigan.gov/sfa/Departments/DPk12_web.html; Michigan Public Act 162 of 2019
39 Kathryn Summers, “Overview of K-12/School Aid,” (Lansing, MI: Michigan Senate Fiscal Agency, February 2019). https://www.senate.michigan.gov/sfa/Departments/
DataCharts/DCk12_SchoolFundingComprehensive.pdf
40 Kathryn Summers, “The Basics of School Funding,” (Lansing, MI: Michigan Senate Fiscal Agency, February 2019). https://www.senate.michigan.gov/sfa/departments/
datacharts/dck12_schoolfundingbasics.pdf
42 Amber Arellano, Sunil Joy and Sarah Lenhoff, “Michigan Achieves: Becoming a Top Ten Education State,” (Royal Oak, MI: The Education Trust-Midwest, Mary 2015). https://
midwest.edtrust.org/resource/michiganachieves/
43 Education Resources Strategies, “Weighted Student Funding: Why Do Districts Decide to Implement Weighted Student Funding?,” (Watertown, MA: Education Resource
Strategies, August 2018). https://www.erstrategies.org/tap/why_districts_implement_wsf
44 Marguerite Roza, “Weighted Student Funding Is On the Rise. Here’s What We Are Learning.,” Institute of Education Sciences, May 2019. https://ies.ed.gov/blogs/research/
post/weighted-student-funding-is-on-the-rise-here-s-what-we-are-learning; EdBuild, FundEd: National Policy Maps – A National Overview of State Education Funding Policies
– Formula Type. Retrieved from http://funded.edbuild.org/national#formula-type
46 Note: Under Michigan law, districts receive this funding based on the number of pupils in their district who are determined to be economically disadvantaged. Students who
are economically disadvantaged are those who are eligible for free or reduced-price lunch, food assistance (SNAP), or temporary financial support (TANF); who are experienc-
ing homelessness, are migrant students, or are in foster care (MCL 388.1631a).
47 MCL 388.1631a
49 Note: This figure is 11.5 percent of the FY20 statewide weighted average foundation allowance which was $8,362; State of Michigan, State Aid Foundation Allowance
Parameters. Retrieved from https://www.michigan.gov/documents/sw_fndamts_11719_7.pdf
50 Edge Staff, “Massachusetts Senate unanimously passes Student Opportunity Act,” The Berkshire Edge, October 2019. https://theberkshireedge.com/news-brief-mass-sen-
ate-unanimously-passes-student-opportunity-act/; Massachusetts Acts of 2019 Chapter 132
51 EdBuild, FundEd: State Policy Analysis – A Detailed Look at Each State’s Funding Policies – Maryland. Retrieved from http://funded.edbuild.org/state/MD
org/cgi/viewcontent.cgi?article=1218&context=reports
54 Ibid.
55 William D. Duncombe and John Yinger, “How Much More Does a Disadvantaged Student Cost?,” (Syracuse, NY: Syracuse University Center for Policy Research, July 2004).
https://surface.syr.edu/cgi/viewcontent.cgi?article=1102&context=cpr
56 MCL 388.1641
57 Michigan Department of Education, “English Learner Program: Entrance and Exit Protocol,” (Lansing, MI: Michigan Department of Education, August 2017). https://www.
michigan.gov/documents/mde/Entrance_and_Exit_Protocol_updated_May_2016_550634_7.pdf
58 Note: An additional $100 to $900 is only about 1% to 11% of the FY20 statewide weighted average foundation allowance of $8362, which would be equivalent to a weight
of about 0.01 to 0.11 of the FY20 statewide weighted average foundation allowance; State of Michigan, State Aid Foundation Allowance Parameters. Retrieved from https://
www.michigan.gov/documents/sw_fndamts_11719_7.pdf
60 MCL 388.1631a; MCL 388.1641
61 EdBuild, FundEd: State Policy Analysis – A Detailed Look at Each State’s Funding Policies – Maryland. Retrieved from http://funded.edbuild.org/state/MD
62 EdBuild, FundEd: State Policy Analysis – A Detailed Look at Each State’s Funding Policies – Georgia. Retrieved from http://funded.edbuild.org/state/GA
63 Emily Parker, “50-State Comparison: K-12 Special Education Funding,” (Denver, CO: Education Commission of the States, March 2019). https://www.ecs.org/50-state-compar-
ison-k-12-special-education-funding/
64 Lori Higgins, “Michigan no longer ranks near bottom for special education, but that doesn’t mean students are doing better academically,” Chalkbeat, June 2019. https://
www.chalkbeat.org/posts/detroit/2019/06/27/michigan-is-no-longer-the-worst-state-in-the-nation-for-special-education-but-that-doesnt-mean-students-are-doing-better-
academically/; David Arsen, Tanner Delpier and Jesse Nagel, “Michigan School Finance at the Crossroads: A Quarter Century of State Control,” (Lansing, MI: Michigan State
University, January 2019). http://education.msu.edu/ed-policy-phd/pdf/Michigan-School-Finance-at-the-Crossroads-A-Quarter-Center-of-State-Control.pdf
65 EdBuild, FundEd: State Policy Analysis – A Detailed Look at Each State’s Funding Policies – Michigan, Retrieved from http://funded.edbuild.org/state/MI; MCL 388.1651a;
MCL 388.1652
66 Emily Parker, “50-State Comparison: K-12 Special Education Funding,” (Denver, CO: Education Commission of the States, March 2019). https://www.ecs.org/50-state-compar-
ison-k-12-special-education-funding/
68 Ibid.
69 Ibid.
70 Ibid.
71 Michigan Department of Education, “State School Aid Update Vol. 27 No. 1,” (Lansing, MI: Michigan Department of Education, October 2018). https://www.michigan.gov/
documents/mde/October_636529_7.pdf; MCL 388.1896
72 Jacqueline Mullen, Samuel Christensen and Bethany Wicksall, “At-Risk Pupil Funding Fiscal Brief,” (Lansing, MI: Michigan House Fiscal Agency, November 2018). https://
www.house.mi.gov/hfa/PDF/Alpha/Fiscal_Brief_At-Risk_final.pdf
73 Michigan Department of Education, “State School Aid Update Vol. 27 No. 1,” (Lansing, MI: Michigan Department of Education, October 2018). https://www.michigan.gov/
documents/mde/October_636529_7.pdf
75 MCL 388.1631a; MCL 388.1641; MCL 388.1651a
49
76 Stephen J. Schellenberg, “Annotated Bibliography: The Impact of School-Based Poverty Concentration on Academic Achievement and Student Outcomes,”
(Washington, D.C.: Poverty and Race Research Action Council, 2009). https://pdfs.semanticscholar.org/c527/59d0b2941cfe5e41a398f8d88c8bbef3dc0e.pdf?_
ga=2.230066261.892688929.1578607683-894376469.1578607683
78 EdBuild, FundEd: State Policy Analysis – A Detailed Look at Each State’s Funding Policies – Michigan. Retrieved from http://funded.edbuild.org/state/MI
80 EdBuild, FundEd: National Policy Maps – A National Overview of State Education Funding Policies – Poverty. Retrieved from http://funded.edbuild.org/national#poverty
81 Texas Education Agency, “A Statewide Socioeconomic Tier Model for Texas School-Age Residents: Methodology and Results,” (Austin, TX: Texas Education Agency, May
2018). https://tea.texas.gov/sites/default/files/Socioeconomic%20Tiers%20Report%2020180522%20-%20Accessible.pdf
82 EdBuild, FundEd: State Policy Analysis – A Detailed Look at Each State’s Funding Policies – Texas. Retrieved from http://funded.edbuild.org/state/TX
84 Ibid.
85 Ibid.
2019
88 Note: This excludes primary residences and non-commercial agricultural properties.
2019; State of Michigan, State Aid Foundation Allowance Parameters. Retrieved from https://www.michigan.gov/documents/sw_fndamts_11719_7.pdf
90 MCL 388.1622d; MCL 388.1606(4)(x)
org/cgi/viewcontent.cgi?article=1218&context=reports
92 Erich W. Ziegler, “The Rural School District: To Survive and Thrive, A Look at Schools In The Upper Peninsula Of Michigan And How They Serve Their Communities Today And
In The Future,” (Marquette, MI: Northern Michigan University, May 2017). https://pdfs.semanticscholar.org/ef9e/bf4078d38f4672af4674da787492a693de07.pdf
93 MCL 388.1622d; MCL 388.1606(4)(x)
94 Augenblick, Palaich and Associates and Picus, Odden and Associates, “Costing Out the Resources Needed to Meet Michigan’s Standards and Requirements,” (East Lansing,
MI: Prepared for School Finance Research Collaborative, January 2018). https://www.fundmischools.org/wp-content/uploads/2018/01/School-Finance-Research-Collabora-
tive-Report.pdf
95 MCL 388.1622d; MCL 388.1606(4)(x)
96 MCL 388.1631a; MCL 388.1641
97 The Education Trust-West, “LCFF: Just the Facts,” (Oakland, CA: The Education Trust-West, May 2017). https://west.edtrust.org/wp-content/uploads/sites/3/2015/11/LCFF-
Just-the-Facts-06092016.pdf
98 Ibid.
99 Ibid.
100 Rucker Johnson and Sean Tanner, “Money and Freedom: The Impact of California’s School Finance Reform,” (Washington, D.C.: Learning Policy Institute, February 2018).
https://learningpolicyinstitute.org/product/ca-school-finance-reform-brief
101 The Education Trust-West, “The Steep Road to Resource Equity in California Education: The Local Control Funding Formula After Three Years,” (Oakland, CA: The Education
Trust-West, April 2017). https://west.edtrust.org/resource/the-steep-road-to-resource-equity-in-california-education/
102 California State Auditor, “K-12 Local Control Funding: The State’s Approach Has Not Ensured That Significant Funding is Benefiting Students as Intended to Close Achievement
Gaps,” (Sacramento, CA: California State Auditor, November 2019). http://www.auditor.ca.gov/reports/2019-101/index.html
103 John Fensterwald, “State audit finds education money not serving high-needs students, calls for changes in funding law,” EdSource, November 2019. https://edsource.
org/2019/state-audit-finds-education-money-not-serving-high-needs-students-calls-for-changes-in-funding-law/619504
104 Kathryn Summers, “The Basics of School Funding,” (Lansing, MI: Michigan Senate Fiscal Agency, February 2019). https://www.senate.michigan.gov/sfa/departments/datacha-
rts/dck12_schoolfundingbasics.pdf; Michigan Department of Education, State Aid & School Finance. Retrieved from https://www.michigan.gov/mde/0,4615,7-140-6605---,00.
html
105 Alabama State Department of Education, “A Guide to State Allocation Calculations 2018-19,” (Montgomery, AL: Alabama State Department of Education). https://www.alsde.
edu/sec/leafa/State%20Allocations/State%20Guide%20to%20Allocations%202018-19.pdf
106 Florida Department of Education, “2019-20 Funding for Florida School Districts,” (Tallahassee, FL: Florida Department of Education). http://www.fldoe.org/core/fileparse.
php/7507/urlt/Fefpdist.pdf
107 Minnesota House of Representatives Fiscal Analysis Department, “Financing Education in Minnesota 2016-17,” (St. Paul, MN: Minnesota House of Representatives Fiscal
Analysis Department, August 2016). https://www.house.leg.state.mn.us/fiscal/files/16fined.pdf
108 Montana Office of Public Instruction, “Understanding Montana School Finance and School District Budgets,” (Helena, MT: Montana Office of Public Instruction, June 2018).
http://opi.mt.gov/Portals/182/Page%20Files/School%20Finance/Accounting/Guidance%20and%20Manuals/Tax%20Credits%20for%20Educational%20Donation/FY%20
2017/Understanding%20Montana%20School_Finance_FY_2018.pdf?ver=2018-06-04-101519-957
109 Michigan Department of Education, State Aid Reports. Retrieved from https://mdoe.state.mi.us/samspublic/Report#/StatusReport
110 MCL Chapter 388
111 MCL 388.1641(6)
112 Maryland State Department of Education, “Bridge to Excellence in Public Schools Act,” (Baltimore, MD: Maryland State Department of Education, January 2012). http://ar-
chives.marylandpublicschools.org/NR/rdonlyres/841ABD3D-FC95-47AB-BB74-BD3C85A1EFB8/31364/FS_63_2012_.pdf
113 Augenblick, Palaich and Associates Consulting, “Final Report of the Study of Adequacy of Funding for Education in Maryland,” (Denver, CO: Prepared for Maryland State
Department of Education, November 2016). http://mgaleg.maryland.gov/pubs/commtfworkgrp/2016-innovation-excellence-in-education-commission-2016-12-08.pdf
114 John B. King Jr., “Can Maryland follow a Massachusetts model on education funding?,” The Washington Post, October 2019. https://www.washingtonpost.com/opinions/
local-opinions/can-maryland-follow-a-massachusetts-model-on-education-funding/2019/10/01/854b802c-e3a9-11e9-b403-f738899982d2_story.html
115 The Education Trust, “Inequities in Opportunity and Achievement in Maryland,” (Baltimore, MD: Prepared for Baltimore Community Foundation, December 2018). http://educa-
tion.baltimorecommunityfoundation.org/download/education-trust-report/?wpdmdl=202&refresh=5d925273c77971569870451
116 Erin Cox, “Hogan raising ‘dark’ money to boost his agenda, stop costly education plan,” The Washington Post, September 2019. https://www.washingtonpost.com/local/
md-politics/hogan-raising-dark-money-to-boost-his-agenda-stop-costly-education-plan/2019/09/19/d0bba432-d324-11e9-9343-40db57cf6abd_story.html
117 Maryland Commission on Innovation & Excellence in Education, “Interim Report,” (Annapolis, MD: Maryland Commission on Innovation & Excellence in Education, January
2019). http://dls.maryland.gov/pubs/prod/NoPblTabMtg/CmsnInnovEduc/2019-Interim-Report-of-the-Commission.pdf
118 Maryland Department of Legislative Services, “Summary of Senate Bill 1030 (Chapter 771) of 2019 – The Blueprint for Maryland’s Future,” (Annapolis, MD: Maryland Depart-
ment of Legislative Services, October 2019). http://dls.maryland.gov/pubs/prod/NoPblTabMtg/CmsnInnovEduc/2019_10_30_BlueprintBillSummary.pdf
119 Michigan Department of Education, ESSA School-Level Financial Reporting. Retrieved from https://www.michigan.gov/mde/0,4615,7-140--471058--,00.html
120 U.S. Department of Education, “Per-Pupil Expenditure Reporting Letter,” (Washington, D.C.: U.S. Department of Education, June 2017). https://www2.ed.gov/policy/elsec/leg/
essa/perpupilreqltr.pdf
50
REFERENCES
Appreciations
The Education Trust-Midwest is deeply appreciative of the philanthropic, policy, education and other
leaders and partners who work every day to improve Michigan’s education system. We are especially
thankful for our philanthropic partners including:
The W.K. Kellogg Foundation
The Ballmer Group
The Steelcase Foundation
The Mott Foundation
The Skillman Foundation
We are also grateful for the thought partnership and leadership on behalf of students — especially
vulnerable children — with our many partners across sectors in the state and country, especially
Zahava Stadler of EdBuild and Jonathan Travers and Nicole Katz of Education Resource Strategies who
served as invaluable sources of expertise through the development of this report.
Finally, we are always thankful for the Michigan Achieves! Leadership Council and its leadership and
championing of our work and the needs of vulnerable students in Michigan. They include:
Ken Whipple
Chair, Former CEO, CMS Energy and Executive
Vice President Ford Motor Company
Deidre Bounds Honorary Members:

President, Ignite Social Media
Richard L. DeVore
Brian Cloyd Regional Vice President for Detroit and
Retired, Steelcase Inc. Southeastern Michigan, PNC Bank
Nolan Finley David G. Mengebier

Editorial Page Editor, The Detroit News President and CEO, Grant Traverse Regional
Community Foundation
Ron Fournier
President, Truscott Rossman Diana R. Sieger
President, Grand Rapids Community Foundation
Mike Jandernoa
Co-Founder, Jandernoa Foundation
51
306 S. WASHINGTON AVE., SUITE 400, ROYAL OAK, MI 48067
(734) 619-8008 | WWW.EDTRUSTMIDWEST.ORG
52
SECTION TITLE

Michigan School Funding: Crisis and Opportunity

Uploaded by

Copyright:

Available Formats

Michigan School Funding: Crisis and Opportunity

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Michigan School Funding: Crisis and Opportunity

Uploaded by

Copyright:

Available Formats

Michigan’s

It’s clear Michigan needs to invest

• Provide equalization funding to low-wealth districts.

• Is the system allocating adequate funding to provide a high-quality education?

Guiding policy principles for improving Michigan’s funding system include:

1. Provide funding according to student need.

5. Provide transparent data on funding going to schools.

Principles for Equitable Funding

• Is the system allocating adequate funding to provide a high-quality education?

1 Provide funding according to student need;

2 Provide more funding to districts with lower fiscal capacity;

5 Provide transparent data on funding going to schools.

PROVIDE AT LEAST 100 PERCENT MORE FUNDING FOR STUDENTS FROM

LESSONS FROM OTHER STATES:

This recommendation is in line with other research.53

PROVIDE AT LEAST 75 PERCENT TO 100 PERCENT MORE FUNDING FOR

LESSONS FROM OTHER STATES:

Georgia provides about 2.5 times more for English learners.62

In Michigan, districts receive funding

Revenue Shortfalls Further Reducing

TARGET RESOURCES TO HIGH-POVERTY DISTRICTS AND SCHOOLS

LESSONS FROM OTHER STATES:

CONCENTRATED STUDENT POVERTY, 2017

PROVIDE EQUALIZATION FUNDING TO LOW-WEALTH DISTRICTS

Why this matters: Districts have different abilities to raise revenue for schools due to differences in

State Definitions of Rural and Sparse

REQUIRE DISTRICTS TO SPEND ACCORDING TO STUDENT NEED

¤ Be based on a needs assessment and evidence and/or research.

¤ Be based on a set of guiding questions or a template that is developed by the state, so

ANNUALLY PUBLISH INFORMATION ABOUT HOW THE FUNDING SYSTEM IS

PUBLISH EASY-TO-FOLLOW DATA ON THE AMOUNT OF FUNDING EACH

LESSONS FROM OTHER STATES:

REVIEW THE FUNDING SYSTEM TO UNDERSTAND PATTERNS IN WHICH

LESSONS FROM OTHER STATES:

DEVELOP, USE AND PUBLISH CONSISTENT RULES FOR CALCULATING

REPORT CLEAR, TIMELY AND ACCESSIBLE SCHOOL AND DISTRICT SPENDING

LESSONS FROM OTHER STATES:

Find all of our reports, including examinations of what

2. PROVIDE MORE FUNDING TO DISTRICTS WITH LOWER FISCAL CAPACITY.

The W.K. Kellogg Foundation

The Ballmer Group

The Steelcase Foundation

The Mott Foundation

The Skillman Foundation

Deidre Bounds Honorary Members:

Nolan Finley David G. Mengebier

You might also like