Commentary
Get the Numbers Straight about School Finance
Complete picture, sound math debunk exaggerated talking points
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Due to the COVID-19 pandemic, Michigan schools face the twin difficulties of adapting to deliver instruction in different ways while budgets squeeze tighter. Unfortunately, exaggerated talking points that are circulating in the media distort the real challenges now facing the state’s educators.
A June 18 Detroit Free Press editorial urges readers to support a federal bailout of Michigan school districts, based on shortfalls in tax collections caused by drastic responses to the pandemic. Never mind that any future aid coming from D.C. ought to benefit students regardless of what type of school they attend, not just conventional districts. Before officials can determine the amount of relief different schools may need, an honest accounting is in order.
State officials now expect school aid revenue to fall $1.25 billion short of what they expected last year. The Free Press deduces that districts will experience a $750 per-pupil cut in state funds. The precise size of the reduction is still unknown, but even accepting this number, the hyperbolic claims touted in the editorial fall flat.
The Free Press quotes an intermediate school district superintendent to lay out the desperate terms of its case. According to Wayne RESA’s Randy Liepa: “If you have a 10,000-student district, you would lose $7.5 million. That’s 75 to 100 teachers. A 10,000-student school district has maybe 350 classrooms, so if you look at just teachers, you're going to lose about a quarter of your teaching staff.”
That scenario doesn’t add up, especially if one recognizes that local school boards can target budget cuts aside from classroom instructors. But the claim is deeply flawed in other ways, too.
Conveniently, there is a 10,000-student district in Wayne County. Wayne-Westland Community Schools gets the $8,111 minimum foundation allowance along with most other Michigan districts, up from last year’s rate of $7,871. In 2019, Wayne-Westland received about $79 million in state and local funds through its foundation allowance.
But contrary to what the Free Press conveyed, that allowance only reflects the minimum guaranteed by the state. Wayne-Westland brought in an extra $50 million in local, state and federal funds. As a result, the district spent about $13,000 per student on operating costs. Adjusted for inflation, its per-pupil spending power grew significantly from 2014 to 2019, putting it slightly ahead of pre-recession levels.
The anticipated $7.5 million cut would make up about 6% of the district’s budget, a significant but not devastating reduction. In pleading for Congress to intervene, the Free Press neglected to mention the extra federal aid districts already receive through the CARES Act. With Wayne-Westland’s portion of this money, officials should only expect a $460 per pupil reduction, if the $1.25 billion state shortfall happens.
The CARES Act made a big difference for some districts. The nearby Detroit Public Schools Community District took in an outsized $85 million share of CARES money, enabling the state’s largest district to avoid budget cuts and layoffs entirely.
Not all budget cuts have to be applied to classroom instructors, either. Local school boards, having discretion over budget changes, could propose laying off teachers as their sole priority, while preserving all other expenditures. Wayne-Westland spends about $67 million on instructional salaries and benefits, a figure that includes both teachers and classroom aides. Taking away $4.6 million would yield a 7% reduction, or about 50 of the district’s 700 full-time teachers.
In 2019, though, the district spent about 50% of its budget on items other than instructional salaries and benefits. Applying cuts proportionally would result in the loss of only about two dozen teachers, a far cry from the figure touted by the ISD superintendent in the Free Press.
The loss of state revenue from the pandemic would not have the same impact on all local budgets. To understand how classrooms might be affected requires a clear, complete picture of a district’s funding sources and how it currently spends money. Simplistic solutions based on distorted financial projections will not help meet schools’ actual needs.
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Get the Numbers Straight about School Finance
Complete picture, sound math debunk exaggerated talking points
Due to the COVID-19 pandemic, Michigan schools face the twin difficulties of adapting to deliver instruction in different ways while budgets squeeze tighter. Unfortunately, exaggerated talking points that are circulating in the media distort the real challenges now facing the state’s educators.
A June 18 Detroit Free Press editorial urges readers to support a federal bailout of Michigan school districts, based on shortfalls in tax collections caused by drastic responses to the pandemic. Never mind that any future aid coming from D.C. ought to benefit students regardless of what type of school they attend, not just conventional districts. Before officials can determine the amount of relief different schools may need, an honest accounting is in order.
State officials now expect school aid revenue to fall $1.25 billion short of what they expected last year. The Free Press deduces that districts will experience a $750 per-pupil cut in state funds. The precise size of the reduction is still unknown, but even accepting this number, the hyperbolic claims touted in the editorial fall flat.
The Free Press quotes an intermediate school district superintendent to lay out the desperate terms of its case. According to Wayne RESA’s Randy Liepa: “If you have a 10,000-student district, you would lose $7.5 million. That’s 75 to 100 teachers. A 10,000-student school district has maybe 350 classrooms, so if you look at just teachers, you're going to lose about a quarter of your teaching staff.”
That scenario doesn’t add up, especially if one recognizes that local school boards can target budget cuts aside from classroom instructors. But the claim is deeply flawed in other ways, too.
Conveniently, there is a 10,000-student district in Wayne County. Wayne-Westland Community Schools gets the $8,111 minimum foundation allowance along with most other Michigan districts, up from last year’s rate of $7,871. In 2019, Wayne-Westland received about $79 million in state and local funds through its foundation allowance.
But contrary to what the Free Press conveyed, that allowance only reflects the minimum guaranteed by the state. Wayne-Westland brought in an extra $50 million in local, state and federal funds. As a result, the district spent about $13,000 per student on operating costs. Adjusted for inflation, its per-pupil spending power grew significantly from 2014 to 2019, putting it slightly ahead of pre-recession levels.
The anticipated $7.5 million cut would make up about 6% of the district’s budget, a significant but not devastating reduction. In pleading for Congress to intervene, the Free Press neglected to mention the extra federal aid districts already receive through the CARES Act. With Wayne-Westland’s portion of this money, officials should only expect a $460 per pupil reduction, if the $1.25 billion state shortfall happens.
The CARES Act made a big difference for some districts. The nearby Detroit Public Schools Community District took in an outsized $85 million share of CARES money, enabling the state’s largest district to avoid budget cuts and layoffs entirely.
Not all budget cuts have to be applied to classroom instructors, either. Local school boards, having discretion over budget changes, could propose laying off teachers as their sole priority, while preserving all other expenditures. Wayne-Westland spends about $67 million on instructional salaries and benefits, a figure that includes both teachers and classroom aides. Taking away $4.6 million would yield a 7% reduction, or about 50 of the district’s 700 full-time teachers.
In 2019, though, the district spent about 50% of its budget on items other than instructional salaries and benefits. Applying cuts proportionally would result in the loss of only about two dozen teachers, a far cry from the figure touted by the ISD superintendent in the Free Press.
The loss of state revenue from the pandemic would not have the same impact on all local budgets. To understand how classrooms might be affected requires a clear, complete picture of a district’s funding sources and how it currently spends money. Simplistic solutions based on distorted financial projections will not help meet schools’ actual needs.
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.
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