Michigan Education Finance Study
Prepared for the State of Michigan in 2016
APA was contracted by the state of Michigan, through the Department of Treasury, to conduct a data-focused analysis of the revenues and expenditures of school districts in the state. APA completed two main areas of study:
First, APA reviewed the revenues and expenditures of districts meeting specific performance standards. The review included an examination of base expenditures (expenditures regardless of student need) and expenditures for the students with special needs, including economically disadvantaged students, English Language Leaner (ELL) students, and special education students. This review required a number of subtasks, including an analysis of how successful districts serve special needs students; identification and analysis of the exemplary school districts (high-performing, low-spending) within various cohorts across the state; an equity study; and an analysis of how successful districts distribute funds to their schools.
Second, APA examined the differences in non-instructional spending across regions of the state. Cost areas to be included in this examination (as required by the RFP) were food service, transportation, maintenance and operations (M&O), community service, and adult education. The RFP also required an examination of the differences in revenues available to school districts by region and the differences in district expenditures by area.
In the final chapter of the report, the study team offers a number of suggestions based on the analysis conducted:
The base cost expenditures for Notably Successful districts should be used as the per student base cost for Michigan once efficiency screens are applied.
The study team recommends that funding from state and local sources be available for at-risk and ELL students equivalent to weights of 0.30 for at-risk students and 0.40 for ELL students.
The study team recommends creating a system that better tracks special education expenditures from all sources.
The study team does not recommend setting regional benchmarks for non-instructional expenditures at this time. The Notably Successful district figures should be used at this time as part of the base cost figures.
The study team does not recommend setting regional benchmarks for capital or debt service expenditures.
Michigan should begin to collect targeted data if it wishes to set regional cost differences in the future.
Michigan should work to create a more equitable state funding system.