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Governor Snyder’s Much Needed Changes to how Education is Funded

The recommendation to increase education funding in Governor Snyder’s proposed budget is a welcome surprise, and a distinct diversion from the administration’s prior allocations. The administration’s first budget for fiscal year 2012 called for a $930.6 million cut in school aid dollars. While this was partially offset by $455 million in one-time spending dollars, the net decrease of $475.6 million still had a large impact. And while subsequent budgets have all contained increases to education, those have been rather minimal, especially in comparison to the changes Governor Snyder now recommends.

Although the proposed budget increases education funding by only 2% ($231.9 million), the way the governor reallocates preexisting funds helps to accomplish a lot of his education goals. He specifically targets cyber schools, decreasing their funding by 20%, thus saving the state roughly $16 million. Cyber schools presently receive the same amount of funding as brick and mortar schools. However, since cyber schools don’t have to pay for infrastructure, transportation, and food services, all of which make up a large portion of a brick and mortar school’s budget, it stands to reason that these schools would require less funding to function. The proposed budget also saves money by capping the funding of Shared Time Instruction, a program where nonpublic school students can take elective courses at public schools. Without any change to funding, the estimated cost of the program for Fiscal Year 2018 would be $115 million. The Governor’s proposal would cap funding for the program at $60 million.

The proposed budget recommends increasing funding to a number of areas. One of the more important areas is the At-Risk Program, where the Governor has proposed several much needed changes. In the past, districts received 11.5% of their foundation allowance multiplied by the number of students in that district who qualified for the free or reduced breakfast, lunch, or milk program. However, they didn’t actually receive that much money. The program, for years, has been underfunded, causing massive proration in the funding the districts actually receive. The proposed budget does a number of things to resolve current issues with this program. First, the range of eligible districts is expanded. Previously, hold-harmless and out of formula districts were not eligible for funds, but under the proposed budget they would be. Second, instead of using the free and reduced program as a metric, the proposed budget uses the number of students who are economically disadvantaged as a measure of who receives those dollars. These two changes are coupled with a 40% overall increase to funding to the program. Because of the increased eligibility, that increase falls just short of fully funding the program, but is still a positive step in the right direction. The chart below shows the shortfall in funding to the program over time. The Governor’s budget fails to eradicate this shortfall due to the proposed expansions, but the overall shortfall is reduced in comparison to past years.

 

Source: Senate Fiscal Agency

 

The proposed budget also provides $22 million in the form of a categorical grant for districts with high school students, providing schools with an additional $50 per student. This is based on the assumption that high school students require more resources than lower grade levels, and the increases in funding take that difference into account.

The proposed budget includes increases for higher education as well. Using a performance formula, it would distribute $35 million dollars between the different colleges, increases ranging from 1.9% to 3.4%.

While these changes have been received with mild enthusiasm from legislators on the left, the odds of these changes being implemented is not particularly high. Taking dollars away from cyber schools and districts without high schoolers has been met with some opposition on the right, given their support for charter schools. Additionally, given the recent move to cut the income tax, where the school aid fund gets much of its money, it seems unlikely that the legislature would be willing to increase funding to public schools. While this proposal gets a lot of things right, the chances of success in the legislature do not look good.

 

Sources:

Governor Snyder’s FY2018 Education Budget. (2017, February 22nd). Retrieved March 1st, 2017, from http://crcmich.org/webinar-governor-snyders-fy2018-education-budget/

Fact check: Did Michigan Gov. Rick Snyder cut $1 billion from education or add $660 per student? (2014, February 5th). Retrieved March 1st, 2017, from http://www.mlive.com/politics/index.ssf/2014/02/fact_check_did_michigan_gov_ri.html

Michigan cyber schools fight Snyder’s proposed aid cut. (2017, February 28th). Retrieved March 1st, 2017, from http://www.detroitnews.com/story/news/local/michigan/2017/02/28/michigan-cyber-schools-fight-snyders-proposed-aid-cut/98505700/

History of At Risk Funding in Michigan. (2015, Summer). Retrieved March 1st, 2017, from http://www.senate.michigan.gov/sfa/Publications/Notes/2015Notes/NotesSum...