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School funding fight turns on two visions of Michigan

Michigan political leaders and education groups have all proposed school funding plans that meet their own definition of what is more equitable for students.

That’s welcome news in a state where payments to school districts can sometimes seem confounding. Why is it that schools in DeWitt, for instance, get $7,026 per pupil from the state, while Northport gets $8,848? The Bay City Academy charter gets $7,026 while many other charters get $7,168. And Birmingham Public Schools receives $11,804 per pupil because it is among more than 50 wealthier districts that are allowed to collect millions in extra money from their local residents for schools through a quirk of the current funding law.

The problem is, each group pushing budget reforms has their own notion of what is equitable. For some, it means every district should get equal funding, no matter where it is or the challenges facing students in that community.

“Why is it some kids are worth less?” asks Gary Naeyaert, executive director at for the Great Lakes Education Project, a school choice and charter school advocacy group. GLEP favors equal state per-pupil resources for traditional public schools and charter schools, noting that schools with at-risk students qualify for additional grant funds.

Others argue equity means some districts should receive more funding to provide their students an equal opportunity at a comparable education. According to this camp, districts serving low-income urban or rural communities, for instance, often need greater resources than affluent suburban districts to provide students with access to quality education. The cost of living, transportation expenses and other issues also vary from district to district. To this group, equity means adequacy – that is, giving each district what is adequate to give their students an opportunity for success.

“Making things equal isn’t necessarily making things equitable,” said Steven Norton, executive director of Michigan Parents for Schools, a nonprofit advocacy group that takes the “adequacy” approach to school funding.

“Students need funding available to meet their needs. That applies to kids who are considered to be at-risk, and secondly, children who qualify for special education services. Not all of those costs are covered by the state or federal earmarked funds,” he said. “That’s kind of the real dilemma. Everyone wants a good education, but a lot of people don’t want to pay more for it.”

Herein lies the heart of the equity versus adequacy debate over the future of school funding – what is fair when it comes to financing schools? It’s an issue that is more than theoretical as state lawmakers and powerful education interest groups seek to change a funding system that all agree needs reform.

Money woes and mediocre test scores in Michigan’s schools are firing up the ages old debate, a debate filled with jargon and stoked by emotion from everyone who has a child, ever attended school, is looking to hire qualified graduates, or simply pays taxes. And with state legislators and the governor up for election this year, the debate over what is fair in school funding is only going to get louder.

Prop A 2.0 needed

Lawmakers on both sides of the aisle agree – the Proposal A law of 1994 did what it was supposed to do: it cut property taxes while narrowing the funding gap between the lowest and more highly-funded schools.

“(But) the promise of Proposal A has come and gone,” said Michael F. Addonizio, a researcher at Kalamazoo-based W.E. Upjohn Institute for Employment Research and co-author of “Education Reform and the Limits of Policy: Lessons from Michigan.”

Proposal A narrowed the funding gap. But it has not resulted in equal funding for all schools, nor did it even aspire to ensure that districts receive enough money to meet the needs of their particular students. It has, in short, brought neither equity nor adequacy.

"A structural overhaul of our state and local tax system is needed to adequately fund our schools,” Addonizio and co-author C. Philip Kearney concluded.

In the current school year, there are 377 school districts that get a $7,026 per pupil foundation grant from the state. Another 117 districts receive up to $8,049, while more than 50 so-called “hold-harmless” (wealthier) districts, get more than that, according to state data. The state foundation grant is only a portion of school district’s total funding, which also includes federal and local funds.

The state funding gap between the lowest- and higher-funded schools is on average about $1,000 per student per year, much narrower than the $2,300 per-student funding gap that existed in 1994-95 when Proposal A took effect.

Those that believe equity should mean equal funding for every student want state aid that ultimately means share and share alike.

Charter industry groups, including the Michigan Association of Public School Academies, say one way to achieve fiscal equality is to have the state quit handing out so much money called “categoricals” that are earmarked for special programs, such as to help “at-risk” students, schools that adopt “best practices” in academics, or robotics programs.

GLEP is pushing the legislature to dramatically reduce categorical funding and as a result give all schools – with an exemption for wealthier, hold-harmless districts – $8,250 per pupil. That would still leave billions in federal, state and local funds that are distributed to at-risk and special needs students, according to GLEP.

Naeyaert questions how the state can accurately determine what one school needs versus what another school needs. To fund schools in that manner would create another separate, unequal process similar to the wide disparities that existed in Michigan prior to Proposal A, the 1994 school funding law, he said.

“There’s no moral reason kids who could be neighbors should get different amounts of money,” he said. “We should be talking about financing children - not districts, not institutions.”

The federal government encourages equal payments to schools and offers a financial incentive grant to states that do a good job in making sure there are no wide variations in how much money they give to different school districts.

Michigan ranked in the bottom third of states in terms of equitable funding in 2012 because of the $1,000 per pupil funding gap between the state’s lowest and higher funded districts. About $3.3 billion in federal grants were awarded in 2012 to states that do a good job of investing effort and equity in school funding.

“Michigan doesn’t do particularly well on measures of equity,” said Michael Dannenberg, Director of Higher Education and Education Finance Policy at the nonpartisan Education Trust in Washington, DC.

Adequate funding for schools is a political thorn, he said. The most politically acceptable way to more fairly fund schools is to distribute targeted, new state tax dollars to districts that need help most, he said. And that typically only happens when a state’s economy is on the upswing.

“Generally, when you plus up, you plus up everyone, but the needy much, much more,” Dannenberg said. “Providing new money to low-income communities and schools is almost always a more successful financial strategy than redistributing existing aid from wealthy to needy,” Dannenberg said.

Irving Bailey, whose daughter attends Jalen Rose Leadership Academy in Detroit, which gets a $7,168 per pupil foundation grant from the state, said the charter school could use the $8,250 per pupil funding that GLEP is advocating for all schools.

As long as it means low-income students will still get the additional financial assistance they need for enrichment programs, he said.

“Everything is too expensive for the government,” he said. “But what you give a student is way more important than a lot of the things they do in government. The future is our children.”

Equal opportunity

Proponents of the adequacy approach to education, including many Democrats and some vocal education groups, want to ensure all students get an equal opportunity to achieve, citing studies showing that some children, especially low-income students and students of color, start school well behind their white, more affluent peers.

Some schools, including those in rural communities, must pay more money for transportation, others need more for security or reading specialists, depending on their location and population. Under this notion of equity, the state would provide schools per-pupil funding based on each student's needs, targeting more toward low-income and traditionally low-achieving student populations.

“Schools need to be provided with the funding to provide a proper education,” said David Hecker, president of the American Federation of Teachers-Michigan.

Rep. Brandon Dillon, D-Grand Rapids, and Rep. Ellen Cogen Lipton, D-Huntington Woods, as well as the state board of education, want the state to invest in a study that determines the true cost of educating a child in Michigan, including how much it would cost to give different student populations an equal chance of success.

When Lansing is ready to be fair – to finally address the impact that economic class and racial segregation have on educational outcomes – then the state will be able to more effectively target funding in a way that leads to better outcomes for all, they say.

“We have reached a time where education can be delivered in person or via electronic means. We also know that education is provided for early childhood programs, elementary, middle and high school students. Each of these variations comes with a different expenditure side, yet we provide revenue at a fixed amount,” the Michigan Association of School Boards wrote on the need to consider the needs of individual districts. “We must examine the costs of delivering education and adjust our school funding system accordingly.”

Making matters more difficult for “adequacy” proponents is the reality that it would cost the state nothing to distribute money equally among districts (the GLEP approach), while exploring and implementing a funding plan based on the adequacy model would be costly.

In 2013, Timothy Bartik, senior economist at the W.E. Upjohn Institute for Employment Research based in Kalamazoo, concluded that the price tag to help poor students in Michigan reach the same level of academic achievement as other students is massive: For each low-income urban student, the required spending is 2 to 2.5 times that for more affluent students. Likewise, it would cost 60 percent to 100 percent more per pupil to close the achievement gap between poor rural students and their more affluent peers, he concluded.

The only thing both sides agree on is that the status quo isn’t cutting it in Michigan.

Kevin Deegan-Krause, a parent and school board member in Ferndale, a Detroit suburb, said the way Michigan pays to educate school children should change along with the times.

He has watched his own schools trying to hold together a shrinking district budget without cutting music, art, physical education or sports. About 1,700 of Ferndale’s 3,700 students were recruited from other cities, mostly Detroit, to help Ferndale schools shore up its stressed budget.

“We’ve cut to the bone. The only way for a district to stabilize or improve its revenues is to bring students from elsewhere,” said Deegan-Krause.

And as school populations have changed, the state’s expectations for student achievement and graduation requirements have increased. It would only be fair for the state to kick in additional funding to support these higher standards, he said.

“What’s fair?” Krause-Deegan said. “You can’t just throw money at it, but it is a question of money being used right.”

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