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Disinvestment, structural flaws driving school funding crisis

The State Board of Education is responsible for ensuring that Michigan’s public schools are providing a high-quality education for the state’s youth. Part of that responsibility includes advocating for sufficient and stable funding.

A recent analysis conducted by researchers at Michigan State University’s Education Policy Center, on behalf of the Board, describes a near “perfect storm” of long-term disinvestment, demographic shifts, and structural flaws in school organization that now combine to send 55 school districts into deficit, and force many more to cut teachers, gut programs, and in some cases close schools.

Twenty years ago, Michigan enacted Proposal A, a public school finance model designed to reduce funding gaps between districts. Proposal A’s architects sought to provide a floor of adequate funding to be flexibly used by existing schools, creating a minimum amount of funds to follow each student. However, as the MSU study concludes, much has changed in the last two decades, and the funding model no longer works with the educational structure that exists today.

According to the report, adjusted for inflation, Michigan’s K-12 funding has declined 12 percent since 2004 as taxes dedicated to education have been eliminated and the School Aid Fund, once reserved for K-12, is now used to pay for higher education and pre-school. In addition, dedicated at-risk student funding has been capped since 2009 and failed to keep pace with the growing number of eligible students.

At the same time, Michigan’s schools have seen enrollments drop 10 percent. In recent years, 70 percent of traditional public schools and 37 percent of charters have experienced declining enrollment. This is due to population trends, including outmigration and fewer births, as well as the proliferation of new charter and cyber charter schools, and expanded schools of choice.

Coupled with the declining enrollment is an increase in new schools. Michigan has experienced tremendous growth in charter schools, with 277 charter schools in operation in FY2013, enrolling over 8.5% of Michigan K-12 students. Last year, nearly 30 new charter schools opened, despite a continued decline in overall student head count.

Finally, ballooning pension costs and limited state support for buildings and technology have contributed to declining school budgets. Taken together, these factors mean that many Michigan school districts have experienced a 25 – 30 percent funding decline over recent years.

The first step in addressing these issues is to understand the nature of the problems contributing to Michigan’s school finance crisis. Only a handful of districts are in distress because of poor or corrupt management, or because they won’t make hard choices. Almost all school districts are in distress due to a combination of disinvestment, enrollment declines, and structural issues in how we currently organize and fund education. That’s why members of the State Board of Education are working with educational and political leaders to identify the key issues, and design effective responses to better support all students and the educators we count on to teach them.

John Austin is President, and Casandra Ulbrich Vice-President of the Michigan State Board of Education

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