Michigan School Funding ‘Dead Last’? Watch That Methodology

Third in a series of how claims about public school revenue claims are often misleading

Gov. Gretchen Whitmer will give her first State of the State speech on Tuesday and has said she will talk about education.

As Whitmer prepares for the speech, the interests and voices that consistently support higher public school spending are talking about a recent Michigan State University study that characterizes Michigan as “dead last” in school funding over a particular 20-year period.

Virtually every news outlet in the state has run a story about the report.

The Holland Sentinel, for example, had a Feb. 5 story with the headline: “MSU study: Michigan ‘dead last’ in K-12 public school funding.”

Is the state of Michigan really dead last in school funding?

Here are some things taxpayers should know about the study.

To compare past spending levels with more recent ones, the MSU researchers used an obscure method to adjust for inflation. If the study had used the more common Consumer Price Index, the reported funding decline largely disappears.

Michigan Capitol Confidential previously reported: “The researchers compared past school spending levels by using an inflation index that is based on changes in state and local government purchase prices. As a result, their analysis overstates past school spending compared to what an analysis using the familiar Consumer Price Index would show.”

“The authors of the report used the U.S. Commerce Department’s GDP price deflator for state and local government purchases as their index of inflation. As a result, their work generated an inflation estimate that is 50 percent higher than what the Consumer Price Index shows, according to an analysis by the Mackinac Center for Public Policy.”

CapCon also reported that the study didn’t include the last four years of school spending.

CapCon reported, “The MSU study compared spending levels from 1995 to 2015 and therefore did not include increases in state revenue after 2015. State spending on K-12 education has increased from $11.86 billion in 2014-15 to $13.04 billion in 2018-19. During that four-year period, the state invested an additional $2.9 billion in state dollars above the 2014-15 levels.”

This article is the final in a three-part series examining school funding topics in Michigan in the lead up to Gov. Whitmer’s State of the State address.

The second story was about equitable funding in public schools. The first story was about the school foundation allowance and how it is often cited in the media.

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.