Michigan School Funding At Record High

State and federal funding for Michigan’s public schools will reach record levels in the coming school year.

The school budget adopted by the Legislature in June will be the first to appropriate more than $14 billion for K-12 education. Also, for the first time, the state’s share will exceed $12 billion, with the rest being federal money. Total state funding will go up from $11.96 billion in the just-completed school year to $12.34 billion in the coming year. Overall state and federal funding will increase from $13.73 billion in 2015-16 to $14.16 billion in 2016-17.

The funding increases are happening despite a 13-year slide in student enrollment. Michigan had 1.75 million K-12 students in 2002-03. Enrollment has fallen in each year since, reaching 1.50 million in the 2015-16 school year.

In an email, Ari Adler, a spokesman for Gov. Rick Snyder, characterized the increases under the governor as a "massive investment in K-12 education." He continued, "But it’s not just about spending money; it’s also about building a world-class educational system that is sustainable and focused on student growth."

Others contend the total budget numbers are misleading when discussing the day-to-day operations of public schools. Gilda Jacobs, the president and CEO of the Michigan League for Public Policy, said in an email:

“While the Senate Fiscal Agency’s new numbers on School Aid funding are wholly accurate, saying we are funding education at ‘state record’ levels is more of a case of semantics than accounting. The fact that less money is going directly to students’ education is the issue, and looking at the total budget doesn't accurately capture that."

“We at the League have noted that the foundation allowance, which is the largest unrestricted operational funding source for school districts, hasn’t kept up with inflation, so purchasing power is down as those dollars are not keeping up with schools’ expenses. Other important programs, such as funding for at-risk students and school districts, are still vastly underfunded. Finally, looking at the final numbers leaves out the fact that the state is also spending money on other education-related areas that do not directly go into the classroom.”

Michigan’s K-12 funding system uses a complex formula to determine each school district’s annual “foundation allowance,” which makes up about 75 percent of the state dollars a district receives. The state also provides more money for programs like school lunches, special education and a share of retirement expenses for employees.

For example, in 2015-16, Ann Arbor Public Schools received $103.3 million from the state, of which $75.9 million is foundation allowance money.

The annual foundation allowance has gone down. Ann Arbor's 2016-17 foundation allowance is projected to be $9,230 per pupil. In the 2010-11 school year, the district received $9,490 per pupil. Ann Arbor is thus getting $260 less per pupil than six years ago.

More money could go to cover daily operations but for skyrocketing expenses in the state-run school employee retirement system, which needs to catch up on decades of underfunding.

Ann Arbor Public Schools' payments to the state-run school retirement system have continued to rise, from $13.2 million in 2011 to $31.6 million in 2015.

State contributions to the system have increased 70 percent in those five years from $1.2 billion in 2011 to $2.0 billion in 2015.