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Does Money Matter for Schools?
Linda Mah
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Does Money Matter for Schools?

Study Shows the Need to Improve School Funding

In January, Michigan State University (MSU) Professor Dr. David Arsen and two of his colleagues released a Michigan K-12 school finance study with several unhappy findings and a range of more positive steps for the future. The findings:

• From 1995 to 2015, Michigan was 50th of 50 among states in inflation-adjusted total school revenue growth. During this period, Michigan’s inflation-adjusted total school revenue declined by 18 percent. In other words, total buying power for school districts in 2015 was 82 percent of what it was in 1995, easily the worst result nationally.

• Only one other state in the country — West Virginia — had declining inflation-adjusted total school revenue growth during this period, and West Virginia’s decline was 3 percent in 20 years, not close to Michigan’s 18 percent drop. All other states in the country had increases, from just a few percentage points to over 60 percentage points in a couple of states.

• From 1995 to 2015, Michigan was 48th of 50 among states in inflation-adjusted per pupil revenue growth with a decline of 15 percent. Arsen and his co-authors have several recommendations for addressing the deterioration in school funding in the last two decades, many of which are identical to, or minimally consistent with, the Michigan School Finance Research Collaborative (SFRC) study issued in January 2018.

• Base per pupil revenue (local, state, and federal) of $9,590.

• Additional per pupil revenue generated by and for every poor student of 35 percent, or $3,356, more.

• Additional per pupil revenue for every English language learner ranging from 35 percent ($3,356) to 70 percent ($6,712) more, depending upon the English level of the student.

• Additional per pupil revenue for every special needs student of 63 percent ($6,042) for students with mild disabilities and 104 percent ($9,974) for those with moderate disabilities. For students with severe disabilities, the MSU study recommends that the state reimburse the local school district for 90 percent of the cost of the student’s education.

• High-quality pre-kindergarten for all four-year-olds and for at-risk three-year-olds at $14,155 per student.

Released a year ago, the study of the School Finance Research Collaborative, a bipartisan group of businesspeople, educators, and others, was the state’s first adequacy study in history. It highlighted the profound underfunding of public schools throughout the state. The recently released MSU study sounded many of the same themes: poor children, English language learners, and special needs children are significantly underfunded in Michigan.

Yet, there were differences between the studies as well. For example, while both call for high-quality pre-kindergarten for all four-year-olds at $14,155, only the SFRC study argues for high-quality pre-kindergarten for all three-year-olds as well. The MSU study calls for pre-kindergarten for at-risk three-year olds only.

While both studies indicate an underfunding of special education, the MSU study recommends 10 percent less additional funding than the SFRC study.

While the SFRC report calls for additional study of capital funding needs of low-property wealth districts, the MSU study calls for a guaranteed state subsidy for such districts.

Importantly, however, the studies reach the same general conclusion: Michigan schools are significantly underfunded, and Michigan’s low achievement levels relative to other states in the country are in part a function of this underfunding.

Interestingly, these aren’t the only two studies in the last three years to have drawn this conclusion. In December 2014, a bipartisan deal in the state legislature authorized the first state funding adequacy study in Michigan history. Completed in the summer of 2016 with a very different methodology than either the MSU or the SFRC study, the 2016 study nonetheless reached the same conclusion: Michigan’s schools are underfunded.

Fourteen months ago, in November 2017, a special education reform task force led by then-Lt. Governor Brian Calley produced a report that indicated special education was underfunded in Michigan by $700 million.

So what conclusions can one draw from these four studies, all produced in the last three years? First, they aren’t driven by the politics of a single political party. The MSU study was an academic report, not a political one. The SFRC was a bipartisan effort. The first state adequacy study from 2016 was launched with a bipartisan vote in the state legislature. The special education study was led by a Republican lieutenant governor.

Second, though there are differences among them, all four studies agree that Michigan schools are underfunded. They each cite specific areas of underfunding and specific areas of education that could and should be improved with additional school funding.

Additional school funding helps to hire additional supports for students and staff in schools: social workers, behavior specialists, counselors, nurses, mental health therapists, and others. It helps to hire teachers to lower class sizes. It buys new materials for students and staff. It helps to fix and replace buildings and parts of buildings. It purchases technology for students and staff. It provides more professional development, more time during a school day, and more school days in a school year.

It’s true that school reform isn’t all about money. But that it’s not all about money doesn’t mean that it isn’t AT ALL about money. It is. Money matters.

And that’s what four school funding studies, produced in under three years in our great state by a range of individuals and groups, have all decided.

So no, money isn’t the only aspect of school reform…but it most assuredly is a critical component.

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