News Story

The $2 Billion Education Funding Myth

Number ignores billions in grants

Opponents of Gov. Rick Snyder have falsely claimed for several years that he pushed through a $1 billion cut to education.

Now they're doubling it.

Unions and some Democrat politicians are saying the governor has cut education by $2 billion over his first three years in office. But they are ignoring another $2 billion in annual funding the state provides public schools.

Michigan gives that $2 billion a year by way of numerous types of grants for things such as support for at-risk students, incentives for best practices and technology infrastructure.

The $2 billion cut claim is related to the School Aid Budget, which generally funds K-12 schools and is made up of federal and state dollars. The state’s contributions are those funds specifically earmarked for public education as well as general fund money.

Overall, state and federal funding for K-12 education has increased from $12.7 billion in 2011-12 to $13.4 billion in 2013-14, according to the Senate Fiscal Agency. The state dollars spent on K-12 education has increased every year Snyder has been in office going from $11.01 billion in 2011-12 to $11.21 billion in 2012-13 to $11.60 billion in 2013-14. By comparison, the state appropriated $10.80 billion for K-12 education in 2010-11, Gov. Jennifer Granholm’s last year in office.

Despite putting more money into education, unions and some politicians have still made the claim that funding has been cut by $2 billion.

Sen. Gretchen Whitmer, D-East Lansing, has made that claim repeatedly recently. Her spokesman, Robert McCann, explained in an email how she came up with that figure.

The $2 billion comes from the combination of a one-time reduction in 2011-12 to the school’s per-pupil foundation allowance and a transfer of money from K-12 education to community colleges and public universities, he said.

Critics count the moving of $1.19 billion in state money from K-12 education to community college and public universities as a cut to education, even though it still funds post-secondary public education and K-12 funding was still increased despite the transfer.

Also, the claim of a $2 billion cut ignores that the state spent a combined $564.9 million in 2012-13 and 2013-14 to pay off part of the expense of public school employees’ pension costs. The state paid that to offset the costs of the Michigan Public School Employees Retirement System, a financial responsibility of the state’s school districts.

McCann said there was a $930 million cut to schools in 2011-12. That came from Gov. Snyder’s cut of $300 per pupil from the state foundation allowance. Former Gov. Jennifer Granholm cut the foundation allowance by $170 per pupil in 2010-11. That $170 per pupil cut wasn’t felt by the school districts because it was replaced by federal dollars. However, Gov. Snyder didn’t restore that $170 per pupil cut.

The $300 per pupil cut amounted to $452.5 million and the $170 per pupil cut was another $316.3 million and there was another $80.2 million in various other reductions, according to the Senate Fiscal Agency.

Those were ongoing reductions at the time in 2011-12 and didn’t include money increases later in the fiscal year. For example, those $930 million in cuts don’t include a one-time $455.5 million appropriation to K-12 funding in 2011-12 for things such as “best practices” incentives and the payment to help offset the cost of MPSERS.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.