- Sponsorship -

School Funding: What Does The Future Hold?

While the Michigan economy has, officially at least, been in recovery for more than six years, school districts are still struggling to make ends meet. But with the recovery continuing, the future should look better, right?

Guess again.

While the current recovery hasn’t met the needs of students, the future may look even worse. Two major studies this year documented funding shortfalls, one commissioned by the state itself. They were:

  • The Michigan Education Finance Study, released earlier this year, indicates schools should be receiving nearly $1,200 more per student to achieve proficiency goals set by the state, and significantly more for at-risk and English-language learners.
  • The Michigan State University Policy Institute says schools are failing into financial distress “because of inadequate state funding, declining enrollment and more students with special needs.”

After years of budget cutting and consolidation of services, superintendents of districts within Kent ISD recently commissioned former House Fiscal Agency Director Mitch Bean to project future revenues. Their goal was to better understand what to expect in the near future and to determine if they will have the resources to meet future demands for new programming.

What they learned was sobering.

Bean for decades was a participant in Michigan’s unique Consensus Revenue Estimating Conference, where the House and Senate Fiscal Agencies team up with the Michigan state treasurer to forecast revenue available for state operations. His report to Kent superintendents suggested the long, hard climb outof recession and a $470 per-pupil reduction in the foundation grant — schools’ primary source of operating revenue — may be a continuing slog, even if the economy continues to grow. Bean concluded:

  • The impact of tax cuts already enacted and being phased in will dramatically reduce available revenue in future years;
  • The combination of spending pressures and already enacted tax cuts will strain every area of the budget and require either more revenue or drastic cuts to state service;
  • The variability and dramatic increase of refundable business tax credits has added a great deal of uncertainty to state resources.

Burning a Hole in K-12 Firewall

Those knowledgeable about state funding know Michigan, since 1994, has had a unique budget structure that segregates general fund/general purpose dollars from revenues dedicated to education, which are in a separate budget called the School Aid Fund.

For the first 16 years of this structure, there was a firewall between the general fund and the school aid fund, which was totally dedicated to K-12 spending. In the depths of the Great Recession, however, the Granholm administration broke through that firewall to fund community colleges through the school aid fund. Now, more than $450 million goes to community colleges and higher education from the school aid fund and the number could grow much larger, as the state still directs more than $1 billion in general funds to higher education.

The new highway plan, passed by legislators in November 2015, will cost more than $800 million in additional general fund dollars when fully implemented. In addition, there is an income tax reduction mechanism embedded in the road funding package that will roll back taxes when general fund revenues total more than 1.425 times inflation. If that mechanism were in place in 2016, the income tax rate would have fallen from 4.25 percent to 3.96, resulting in a permanent revenue reduction of $593 million, Bean said.

What does that mean for state funding?

Says Bean: “More money will go to transportation – but the rest of state government will be in a permanent state of recession … policymakers will be looking for ways to reduce budgets in all areas … including education, or they will need to identify new sources of revenue.”

So what does that mean to your children in the classroom?

Schools will struggle to maintain the programming they need to ensure your child’s success. Our children have only one shot at an education. We should all be concerned.

- Sponsorship -
Ron Koehler
Ron Koehler
Ron Koehler is the Kent ISD Assistant Superintendent and offers his commentary on issues in education. Read Ron's full bio


Fourth-grade hockey fan gets a magical hour on ice: ‘I made the shot!’

Raised as a Red Wings and Grand Rapids Griffins hockey fan, Jackson Solow lights up while skating on an ice rink wearing his favorite hockey jersey...

‘This time it is continued learning’

One school’s switch from in-person to virtual education last week was nearly seamless, especially when compared with the forced school closure in March...

Foundation grants $28,285 in fall funding requests

Virtual phys ed and art experiences, materials to improve classroom focus and books on social issues aimed at middle-schoolers are among the grants approved this fall...

Latest school closings expand on state-ordered high school mandate

More Kent County districts continue to announce temporary school building closures, as schools contend with a sharp increase in COVID-19 cases in Kent County and Michigan...


Please enter your comment!
Please enter your name here

Related Articles

Engagement: The Most Important Measure of Student Success

Polls find that students’ engagement in their school work declines as they ascend the grades. Tests that don’t relate to their real-life experiences exacerbate the problem...

Our ‘Window into Your Public Schools’ builds confidence

School News Network 'brings programs and people, and what schools are accomplishing, much more to the forefront than any other source of information.' That’s our goal, and that’s what our readers said in our annual reader survey...

What are we waiting for? Time for Michigan to fully fund its schools

The research couldn’t be more clear. The Michigan School Finance at the Crossroads report by Dr. David Arsen documents a quarter-century of decline in our schools, finding Michigan last in the nation in new dollars invested in education since 1995...
- Sponsorship -


Engagement: The Most Important Measure of Student Success

Polls find that students’ engagement in their school work declines as they ascend the grades. Tests that don’t relate to their real-life experiences exacerbate the problem...


Food ‘angels’ support hungry kids through pandemic

They work all across Kent County, guardian angels with peanut butter on their hands and crumbs on their shirtsleeves...
- Sponsorship -


Maranda Where You LiveWGVU