News Story

There Was Never a $470 Per Pupil Education Funding Cut in Michigan

Around 20 percent of school funding often ignored in debate on education finances

This year, the Huron Valley School district in Oakland County will get $7,126 per student under the state of Michigan’s “foundation allowance” funding formula. Foundation allowance money is the main revenue stream flowing into Michigan public schools each year, but by no means is it the only one.

For example, Huron Valley will get another $12.4 million from the state, or $1,293 per student, in so-called “categorical” funding. This money covers things like employee pension benefits, special education, school lunch subsidies and even a program to teach students how to build a robot in six weeks. These “categoricals” add an additional 18 percent to the district’s annual budget.

Yet those who advocate for higher spending rarely include the categorical grants when describing school funding, often leaving the impression that the foundation allowance is all the money districts get.

The most recent example comes from Kathy Hayes, executive director of the Michigan Association of School Boards. In a recent MLive op-ed promoting the Proposal 1 sales tax hike on the May 5 ballot, she claimed that K-12 school funding was cut in the 2011-2012 school year. The claim ignores all the funding districts get beyond the foundation allowance.

“Lastly, schools will see an increase in funding as part of this ballot proposal,” Hayes wrote. “While the largest portion of the revenue generated will go to roads as it should, including money for schools that are still trying to make up the $470 per pupil loss in 2012 is much needed relief.”

This oft-repeated figure ignores the categorical grants schools get every year. When that revenue was added to the foundation allowance, school funding actually went up in 2011-2012.

In addition, even the alleged “$470 per-pupil decrease” in foundation allowance grants was not accurate for the vast majority of school districts. The 2011-2012 school budget was the first enacted during the administration of Gov. Rick Snyder, and among other things, it included extra grant dollars for schools that adopted four out of five management “best practices.” There were 714 school districts and charter schools that year that got an extra $100 per student for doing so.

Hayes said she appreciated a chance to comment but added in an email, “we probably won't agree on this issue.”

The foundation allowance shifts from that year are covered by a Senate Fiscal Agency report, while another more comprehensive report from the agency shows that state dollars going to K-12 schools have increased every year under Snyder. In 2011-12, the state contributed $9.2 billion to the K-12 School Aid Fund, an increase of $300 million over the previous year.

“School officials repeatedly ignore billions of additional education spending in Michigan,” said James Hohman, assistant director of fiscal policy for the Mackinac Center for Public Policy. “They need to stop complaining about illusory cuts and acknowledge taxpayers’ generosity.”


See also:

Only Two School Districts With Deficits Don't Meet 'Best Practices' 

Advocates of More Education Spending Ignoring Billions in Other Funds

Michigan School Districts in Perpetual 'Funding Crisis'

Why Do Michigan Residents Falsely Believe Education Spending is Down?

The $2 Billion Education Funding Myth

Reality Check: Michigan Public Schools Getting More Money For Fewer Students

Michigan Schools Never Saw a $1 Billion Cut

Despite Fewer Students, Michigan School Funding Going Up, Up, Up

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.