News Story

Firm Picked to Evaluate Education Funding Has Long History of Recommending Spending Hikes

Is the 'education adequacy' study preordained?

The Snyder administration's preliminary pick for a contractor to do a study on whether Michigan spends an “adequate” amount on public schools has a long history of coming to the same conclusion on similar questions: “Not adequate." The company’s 12 most recent state studies have all concluded that spending on public schools should be increased.

The record includes a 2013 report which found "inadequate" school spending by the District of Columbia, which year after year spends more per student than all (or nearly all) the 50 states.

Gov. Rick Snyder and legislative Republicans committed to buying what is known in the education world as an “adequacy” study and earmarked $500,000 for the purpose. The commitment came as part of the legislative logrolling used during a December 2014 lame-duck session to get Democratic votes for a $2 billion sales and gas tax increase. It was one of several major concessions responsible for the ill-fated Proposal 1 road funding plan, which was rejected by 80 percent of Michigan voters in a May 2015 election.

A special panel consisting of administration officials and one school superintendent was organized to pick a vendor for the study, and it recommended the Colorado-based company Augenblick, Palaich and Associates. The State Administrative Board may finalize the selection as early as today.

Starting in 2001, every one of the studies Augenblick was paid to produce came to the same conclusion: Taxpayers must come up with hundreds of millions of additional dollars to properly educate public school students. The company recommended spending hikes that ranged from 3.6 percent (Nevada, 2006) to 61.4 percent (Montana, 2007).

In 2013, the company concluded that the District of Columbia needed to spend 22.1 percent more to adequately educate students. As of 2012, Washington, D.C. public schools spent nearly $30,000 per student, according to the U.S. Census Bureau.

A review of Augenblick's studies also reveals a tendency to recommend the largest increases in states that were already dedicating a high share of their economic output to public schools. Michigan ranks in the top ten states for per student spending as a share of state income.

Aside from consistently coming up with the same answer for how much states should spend — “more” — the studies show some inconsistencies. For example, in 2006, in the first of two Nevada studies, the company recommended a 3.6 percent spending increase. A second study done in 2015 — after the state had increased spending by an amount roughly equal to 0.8 percent of its entire gross domestic product — found that the state still needed to spend 49 percent more.

Michigan Capitol Confidential asked Justin Silverstein, vice president of Augenblick, Palaich and Associates, about the firm’s track record of producing studies that recommend additional funding.

“I think it’s important to take a look at the specifics of what each study was about, what were the standards the state was trying to meet,” Silverstein said. “It only makes sense to look at each study in the context of what was the goal. You have to approach it from what it is that a state wants the study to do. We’ve been pretty successful at accomplishing that. We have a lot of fidelity to our studies.”

When asked if one of the company's studies had ever determined that no increased funding was required, Silverstein said, "We have had studies that found, with high-performing schools, that no funding increase was needed."

Silverstein also said that until the contract with Michigan has been finalized, he couldn’t comment on the specifics of the Michigan study.

Total per pupil funding of Michigan’s K-12 public schools has increased over the past 20 years even when adjusted for inflation. Including federal funding, the 1995 level was the equivalent of $11,040 per pupil in today’s dollars; the current level of $12,570 per pupil represents an increase of $1,530 for each student. Michigan’s current per pupil spending level places it near the middle of the pack nationally, or roughly 21st to 24th depending on the variables used.

The U.S. spends more per pupil on education than any comparable nation, and the return on this investment has been a steady deterioration of educational outcomes. The performance of U.S. students on international exams continues to lag those of students from other countries that spend less.

Two other firms submitted bids on the Michigan adequacy study: East Lansing-based Anderson Economic Group and Maryland-based Cross and Joftus. Michigan Democratic Party Chairman Brandon Dillon voiced strong opposition to even considering the Michigan-based Anderson Group.

The National Access Network has a list of past adequacy reports, as does Augenblick.


See also:

A Presidential Flip Flop

Michigan Schools Receive Over $12,500 Per Student

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.