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Charters Outperform Conventional Schools on Top-to-Bottom List When Student Socioeconomic Status Is Taken into Account

If the Michigan Department of Education were to take the socioeconomic status of students into consideration when ranking school performance, it would find that charter public schools outperform conventional public schools on the state's Top-to-Bottom list, according to an analysis done by Audrey Spalding, education policy director for the Mackinac Center for Public Policy.

Spalding’s analysis found that if there are two schools of the same grade levels where both have the same percentage of students eligible for a free lunch — one a charter public school and the other a conventional public school — the charter would, on average, be ranked 5 percentage points higher on the state’s rankings.

The statistical analysis adjusts test scores based on poverty levels, or in this instance the number of students eligible for a free lunch.

Charter schools in Michigan have significantly more students who are eligible for free lunch than conventional public schools. Some 66.4 percent of charter schools students are eligible for free lunches, while 39.2 percent of conventional school students qualify for free lunches.

"It is interesting that the Michigan Department of Education is working to crack down on charter schools, despite the fact that they outperform conventional schools on the department's own ranking when student background is considered," Spalding said.

The Mackinac Center for Public Policy included socioeconomic status of students in its “context and performance” report cards for all public high schools and elementary/middle schools starting in 2012. Later, Bridge Magazine and Public Sector Consultants released public school rankings also based in part on socioeconomic status of students.

Jack Schneider, assistant professor at College of the Holy Cross, said test scores are a much more accurate measure of race and family income than they are of what students learned in school.

If that's the case, than adjusting scores based on poverty level would be more fair when evaluating schools and teachers. However, the Michigan Department of Education has resisted including socioeconomic status of students in its rankings.

In addition to this analysis of the state's TTB rankings, more rigorous research shows that charter public schools perform better in Michigan.

Stanford University’s Center for Research on Education Outcomes (CREDO) released a report in January 2013 that found the average Michigan charter school student outperformed conventional school peers on 52 of 56 outcomes tested. Charter school students received what amounted to an additional two months of learning in reading and math over an academic year compared to their conventional school peers.

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.

News Story

Michigan Debt Per Taxpayer: $19,300

Michigan has among the most debt per taxpayers in the nation, ranking ninth overall, according to the annual “Financial State of the States.” That’s actually a significant improvement from last year.

The report is released by the Chicago-based group Truth in Accounting and measures the total assets and liabilities of the 50 states. The methodology of the report is unique because it includes analyzing unreported pension and retirement health care liabilities.

Michigan has a taxpayer burden of $19,300 per person, which is down from an all-time high of $25,300 per person last year which ranked the state fifth. There are 41 states which have more liabilities than assets. Nine states are in the black with more assets than liabilities.

Donna Rook, president of TIA, said Michigan partially relied on an “accounting gimmick” that makes the numbers look better. In short, the state began prefunding retiree health care for workers and started using a higher discount rate to estimate its health care liabilities. Using a higher discount rate makes the liabilities for the future costs of insurance premiums appear smaller.

"Truth in Accounting’s fifth annual analysis of state assets and liabilities shows Michigan and several other states used an accounting loophole to dramatically lower estimated retirement health debt," Rook said. "But Michigan taxpayers should know the estimate is just that – an estimate. Taxpayers are still on the hook to pay the true debt even if the retirement health fund does not earn the higher estimated return in the future."

It should also be noted that the Michigan Supreme Court has ruled that Other Post-Employment Benefits (mostly health care) can be altered.

In addition to beginning to prefund retiree health care, the state closed out open-ended benefits and provided employees supplemental retiree health care savings plans instead.

TIA lists the following facts about Michigan:

  • Michigan has the 9th worst per taxpayer burden.
  • Michigan has $23 billion to pay the state's bills totaling $81 billion.
  • To fill its $58 billion financial hole today, each taxpayer would have to send $19,300 to the state.
  • The Michigan financial statements clearly report $4 billion of retirement liabilities, but in reality the state has nearly $55 billion of unfunded retirement promises.
  • The Michigan Taxpayer Burden is 49 percent of an average citizen's personal income of $39,215.
  • Outbound moves from Michigan were 54 percent, the 16th highest of all the states, which usually means more people are moving out of the state.

In each of those areas, the state has improved from last year.

The states with the highest debt burden are Connecticut, Illinois, New Jersey, Massachusetts and Hawaii. The nine states with a taxpayer surplus (where assets are greater than liabilities) are, in order, Alaska, North Dakota, Wyoming, Utah, South Dakota, Nebraska, Montana, Tennessee and Iowa.

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.