Update to Costing Out the Base Resources Needed to Meet Michigan’s Standards and Requirements
Prepared for the Michigan School Finance Collaborative in 2021
In 2017, the School Finance Resource Collaborative (SFRC) contracted with Augenblick, Palaich and Associates (APA) to conduct a costing out study to estimate the resources needed in Michigan to allow students, teachers, schools, and districts to meet state standards (see Costing Out the Resources Needed to Meet Michigan’s Standards and Requirements)
In early 2021, the SRFC contacted APA to conduct an update of the 2018 study. Though it has only been three years since the initial study, changes to state standards, increasing understanding of the resources needed to meet standards, changes in pricing, and the COVID-19 pandemic, all provide a strong case to update the costing out estimates.
With the given time and resources, APA proposed focusing the update on the base cost figure for the study. This allows the overall system to be updated since, as mentioned above, all other components of the recommendations are benchmarked off the base cost. The base cost figure for the 2018 study is the per pupil figure for a large district (13,590 students), which represents the lowest cost point. APA implemented the following steps to update the base cost figure:
Identified possible changes to state standards and areas of change in resource utilization in districts.
Worked with a panel of educators to review the possible changes and finalize the areas to examine during this update.
Held a CFO panel to examine district level costs and pricing changes.
Held an instructional panel to identify any changes in resources needed at the school level.
Costed out the new per pupil base figure.
Once the study team adjusted the resource levels and adjusted salaries and benefit rates based upon the panelists’ feedback, there was a $831 increase in the recommended per-pupil amount from $9,590 to $10,421. The increases for salaries and benefits (including an additional $3,500 per staff member for benefits) account for 68 percent of the change and the adjustment to resource levels accounts for 32 percent of the change.