Cost of Transportation in Michigan

Prepared for the Michigan School Finance Collaborative in 2022

In January of 2018, the School Finance Research Collaborative (SFRC) released the study report “Costing Out the Resources Needed to Meet Michigan’s Standards and Requirements.” Augenblick, Palaich and Associates (APA) in conjunction with Picus, Odden & Associates (POA) prepared the study which examined the resources needed by students, teachers, schools, LEAs, and charters in Michigan to meet the academic standards expected in Michigan. The report focused on operating expenditures but did not include a deep evaluation of the transportation costs local education agencies (LEAs) face.

This report is a supplement to the 2018 study and provides the results of a transportation study. As the culmination of a two-part study, this report first identifies common approaches used to fund transportation for LEAs and presents an analysis of other states’ transportation formulas completed during the first part of the study, the study team previously reported those finding to the Transportation Advisory Group (TAG). The TAG then selected state transportation models that Michigan could model its transportation formula after. The second part of the study presented in this report was focused on creating a formula to fund school LEA transportation in Michigan. The study team worked with the TAG to first review available data and then map that data to create an approach using components of the states identified in Part One.

The study team met with the SRFC Steering Committee to discuss the findings and the pros and cons of the two models (Lesser of Average or Actual and Efficiency Formula). After discussing the pros and cons of each approach it was decided to recommend Lesser of Average or Actual for funding transportation in Michigan. This model accomplishes the goals of being both transparent and predictable. Policymakers and stakeholders can easily explain the approach and districts should be able to predict future funding.