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Michigan school districts resist consolidation. Will $237M change minds?

school buses
Some observers say Michigan should respond to declining enrollment by reducing its number of school districts, which would cut down on administrative expenses. (Bruce VanLoon / Shutterstock.com)
  • Michigan’s education budget includes $237 million to consolidate public school districts 
  • Advocates say redundant administrative spending is better spent on teachers and classrooms 
  • Voters have been historically unreceptive to consolidation in their communities

Consolidation is a sort of dirty word in education circles. For many administrators, it raises the specter of bitter debates over district boundaries and community identity.

State leaders are now betting that some money can help change their minds.

Michigan’s new education budget sets aside at least $237 million in incentives for districts thinking about combining forces. Details are yet to be worked out, but experts say the money might be used to pay off debts that stand in the way of a district consolidation, or to repair or construct buildings that would better fit the demographics of the newly combined district.

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State Sen. Jim Stamas, a Midland Republican who fought for the incentive funds, says his motivation was simple: Michigan has too many school districts, he says, resulting in redundant spending on administration that could be better spent to support teachers and students, especially after the pandemic.

“We have declining enrollment, but we still have 800 plus school districts,” Stamas said. There are many districts that have 300 or fewer students. My hope is that … we could find ways to incentivize them to work together to put less into the administrative part versus getting the dollars into the classroom.”

But history has shown consolidation efforts to be unpopular with voters in many communities. And it’s not clear whether a financial carrot will do much to change that picture.

“That’s the third rail,” said Lou Steigerwald, superintendent of Norway-Vulcan Area Schools in the Upper Peninsula. “You bring up the word ‘consolidation,’ and it hits home with the community.”

District mergers shaped the Michigan school landscape

Consolidation — or the combination of school districts — plays a key role in the origin story of Michigan’s school system. In 1912, the state had 7,362 school districts, including one-room schoolhouses, according to the nonpartisan Citizens Research Council. In the 1950s and ’60s, hundreds of districts consolidated, spurred in part by the notion that students would be better served in “comprehensive” K-12 districts.

By 1970, when the state had 638 districts, consolidation slowed to a crawl. Since then, the trend has been mostly in the opposite direction. The number of districts has risen to more than 840, thanks to the growth of charter schools, which often function as standalone districts.

Only five other states — Texas, California, Ohio, Illinois, New York — have more school districts than Michigan, and all have larger populations.

Efforts to reduce Michigan’s district count in recent years haven’t been met kindly by voters.

St. Clair Shores residents overwhelmingly rejected a proposal to combine their three districts in 2001. Proponents’ claims that a combined district would be more cost-effective and able to offer stronger academics lost out to fears that the merger would eliminate schools and the community identities that go with them.

Last year, the Troy school board rejected a request to absorb Clawson Public Schools, a small district that has struggled with declining enrollment, saying the Troy district didn’t need the extra revenue that would come with Clawson’s students.

Race and class tensions may also pose a challenge to mergers when the districts in question have different demographics. Districts looking to consolidate in the mid-20th century typically paired with other districts that had similar demographics, while urban districts and districts in poor communities struggled to find consolidation partners, according to the Citizens Research Council.

State leaders have made more concerted pushes for municipal consolidation over the past decade and a half. Gov. Jennifer Granholm called for districts to consolidate business services in her 2007 State of the State address. In the wake of the Great Recession, former Gov. Rick Snyder also pushed for consolidation. He created a $3 million grant program to help districts combine.

Yet the last decade has seen only a handful of examples of consolidation, most of them due to financially troubled districts being annexed (Marshall/Albion), consolidated (Ypsilanti/Willow Run), or dissolved (Inkster).

During the recession, cash-strapped districts were forced to eke out whatever savings they could from consolidation of services, said Bob Kefgen, a lobbyist for the Michigan Association of Secondary School Principals. He doubts that further consolidation will lead to much further savings.

“Schools saw a lot of cuts and looked at a lot of ways to save dollars,” he said. “Roughly a decade of tight school budgets is probably a better motivator” for consolidation than financial incentives.

Is this the time for consolidation?

Michigan’s fiscal picture is much different today than it was when Granholm and Snyder were struggling with mammoth deficits. The state budget is hitting historic highs and schools are reporting growing reserves. And schools are getting an infusion of federal aid, along with increased state funding under the new education budget signed Thursday.

Even so, given the potential to save money and the administrative efficiencies, Steigerwald says officials are still right to push — sensitively — for consolidation in small districts across the state, including in the U.P. There are 63 traditional districts in the state with fewer than 300 students, all of them in rural areas.

Stamas, the state senator, says these flush times may be the state’s best chance to push districts to make tough but necessary decisions on consolidation.

“If there’s a time when we have dollars available … and we can hopefully make (consolidation) affordable and make sense, we should do that,” he said.

Stamas initially proposed a $500 million fund to incentivize districts to combine. After negotiations with Gov. Gretchen Whitmer, the legislature passed a budget creating a $475 million fund to help districts cover the costs of consolidation and infrastructure improvements. Half of the money must be used for consolidation-related projects.

Business groups say consolidation can help schools better capitalize on the state’s fiscal strength.

“Districts have made really hard decisions, but there’s still some opportunity out there,” said Lindsay Case Palsrok, vice president of public policy for Business Leaders for Michigan. The group is calling for a substantial new investment in the school system, backed by new tax revenue, along with increased efficiency through policies like consolidation.

The budget measure is “not a heavy handed mandate,” she said. “This is asking folks to take a look and see if it’s worth it to use these dollars” for consolidation-related projects.

As long as consolidation is optional for districts, it probably won’t happen, said Joshua Cowen, professor of education policy at Michigan State University. 

“I’m struggling to figure out who has real skin in the game, politically,” he said. “Which hill are they going to die on to really push consolidation through?”

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