School Districts Receiving More and Spending More

In the May issue of the Traverse City Business News, Bonnie Alfonso asked the question, “Why are we helping Detroit?”

Alfonso, the vice chair of the Traverse City Chamber of Commerce and the immediate past chair of the Small Business Association of Michigan, wrote:

“Declining enrollment, staggering legacy costs, deteriorating buildings, state funding cuts and tough decisions to shut down neighborhood elementary schools. Welcome to Traverse City. And Detroit. And Flint. And Mackinaw City.”

ForTheRecord says: Alfonso had a good riff going until she got to “state funding cuts.”

None of the four school systems Alfonso mentioned have experienced state funding cuts, going back to Gov. Rick Snyder’s first budget, for the 2011-12 fiscal year, right through to the current fiscal year. The proposed budget for next year increases state funding yet again.

It’s understandable that lots of people believe there have been “school funding cuts,” because teachers unions, many school staffers and media outlets have promoted it for years, even as school budgets climbed ever higher.

From 2012 to 2016, here’s how much more those four school districts are getting from the state: Traverse City: $833 more per student; Detroit: $634 more per student; Flint: $85 more per student; Mackinaw City: $549 more per student. Those numbers represent total state funding, not just the foundation allowance, which is generally about 80 percent of all state dollars a school district receives.

Each of the districts did experience decline in enrollment, and fewer students mean less state money. The enrollment decline has been catastrophic in the Flint school district, where enrollment fell from 9,625 in 2012 to 5,422 in 2016. In contrast, Traverse City’s enrollment of 9,862 in 2015-16 is just 210 students fewer than four years ago.

When it comes to legacy costs, Alfonso is right. They have increased significantly.

For example, Traverse City’s required contribution to the school employees pension fund was $15.7 million in 2015. Just five years earlier it was $9.2 million. That extra $6.5 million would pay the salaries of 108 Traverse City teachers for one year (not including benefits). The total increase in the pension expense came to $659 per student, which swallowed much of Traverse City’s increased funding from the state.