State education proposal would add $1.4 billion to school budget

A recently released study concludes that Michigan must spend far more on at-risk and other vulnerable students to give them a chance at a decent education. But the price tag to implement the study may make it a non-starter in Lansing.

A Bridge Magazine analysis concludes that Michigan would need to pony up at least $1.4 billion more for its public schools annually to meet recommendations made in a recently released study.

And even that may not notably improve learning.

Those are among the new revelations in a watershed report that attempts to quantify the minimum amount the state must spend to provide an adequate education to Michigan students. The study had long been sought by school reform advocates and Democratic legislators, who hailed its June 29 release as lending empirical proof of what’s needed, financially at least, to boost the state’s struggling schools.

The study framed its analysis in terms of per-pupil spending, but did not offer an overall price tag for its recommendations. Bridge’s calculation of $1.4 billion is likely on the conservative side, since the study did not consider costs for special education students.

Now, a bipartisan group of education leaders inside and outside state government, most of whom originally supported the need for the study, have doubts about the efficacy of the report.

Leaders who spoke with Bridge Magazine said the study may be a lost opportunity - that rather than spurring investment in needy districts, the report likely will sit on a desk collecting dust; or worse, be used as a reason to undermine reform efforts in a state that has sunk near the bottom of national rankings in academic performance.

SLIDESHOW: The 10 school districts that would gain the most money

Leaders who previously lobbied for more education funding for schools, particularly for poor students and students of color, express exasperation at the report. They note, for instance, that the report undercuts its own argument for an increase in school funding by focusing on wealthy, largely white districts as models for what the rest of the state should emulate, and by questioning the impact that added money can have on education.

“It’s a whiff,” said one K-12 system leader who declined to be identified so he could speak bluntly. “At best, it’s one piece in a 100-piece puzzle.”

Big price tag

Michigan ranks in the bottom third of states in fourth-grade reading and math, as well as eighth-grade math. The state’s African-American students rank dead last in the nation in fourth-grade math. Less than half of the state’s students were proficient in math and English language arts in all grades tested in spring 2015 on the state M-STEP test.

Education reform advocates had pushed for years for an “adequacy” study to quantify the cost of an education that would give a child a decent shot of learning at grade level. Additional funding, as well as a change in the state’s funding formula to provide more money where it is most needed, is seen as a key to turning around Michigan’s dismal education record.

They finally got their wish in December 2014, in a horse trade to get Democratic votes for a Republican leadership-backed road funding package.

The study, by Denver-based Augenblich, Palaich and Associates, concludes that many Michigan districts are underfunded and that funding disparities between school districts are growing.

The Colorado firm came up with a recommended price tag: $8,667 a year in state and local funding for most students, $11,237 for low-income students and $12,134 for English language learners, an acknowledgement of the extra services and supports those students need to stay on track.

Michigan’s current per-pupil funding ranges from $7,511 to $8,229, with additional funding for “categorical” spending to compensate for higher costs associated with certain student groups, such as English language-learners and those in special education.

The report didn’t calculate what its recommendations would cost the state as a whole. So Bridge did, by applying the study’s recommendations to financial and student data for every traditional school district and charter school for 2014-15. If fully implemented, the recommendations would have added $1.4 billion to the K-12 budget for 2014-2015. That would represent an 11 percent increase in that year’s $12.5 billion school aid fund (which also includes higher education and retirement costs).

That $1.4 billion, and likely far higher if special education costs were included, is more than the $1.2 billion the Legislature and Gov. Rick Snyder agreed to spend to repair Michigan roads. For those who don’t remember, that effort took several years of political wrangling and a failed state referendum.

“You’d have to add roughly a billion dollars to the school aid fund, and there isn’t a billion there,” said Craig Ruff, special education advisor to Gov. Rick Snyder, who supported the need for an adequacy study. “And then there’s the policy question: If the state had $1 billion more, how is it best to spend it?”

If legislators accept the recommendations, it would mean huge increases for many districts, the result of across-the-board bumps in per-pupil spending for low-income students and English language-learners. Detroit Public Schools would receive a $28 million bump, a 6 percent increase to the $490 million it received in 2014-15. Grand Rapids would get $21 million additional funds; Traverse City, $7.7 million.

Many wealthy districts, according to Bridge’s analysis, already receive millions more in funding than the study considered adequate to provide a good education. By the study’s standards, for instance, Ann Arbor Public Schools was over-funded by a whopping $47 million during the 2014-2015 school year.

SLIDESHOW: The 10 school districts that are most “overfunded” under the study’s recommendations

The report’s authors declined to comment for this story, referring questions to Snyder’s office. But in the report, the authors say they do not advocate taking money away from any district, but rather increasing funds to districts below the study’s recommendations.

Big money, incremental gains

Ari Adler, spokesman for Gov. Snyder, told the Detroit Free Press shortly after the study’s release that it shows “a more equitable funding system is needed and more needs to be done to measure education funding and outcomes.”

A commission recently formed by Snyder to look at ways to improve the state’s schools has said it will review the report.

The recommendations would require a massive reform of Michigan’s education funding formula and the political will to divert more than $1 billion a year from other budget priorities.

But even if lawmakers were to come up with $1 billion-plus, the report raises a real question about how much that extra funding would help.

According to a little-notice passage in the study, an extra $1,000 in spending per pupil would increase reading and math proficiency on state tests by only 1 percent. That’s moving one-kid-in-100 from not meeting state grade-level standards to meeting those standards at a cost of $1,000 more for every student – a figure unlikely to encourage legislators to open the state’s wallet.

The model: white and affluent schools

Is it possible that more money spent in low-income districts would have a bigger impact on learning than in high-income districts? We don’t know, because the study focused on wealthy, largely white districts.

Under its $399,000 contract with the state, Denver-based Augenblich, Palaich and Associates,  was required to study only those districts that exceeded the average academic proficiency rate in every grade and subject. The result was the study focused on 54 districts in which the community median income was 55 percent higher than the state average.

Minorities were also underrepresented. Students in the districts studied were 77 percent white, compared with 67 percent statewide. African-American representation in the studied districts was one-third the state average.

That’s just one of several issues in the long-awaited report that is making it easy for critics to recommend the study be best used as a coaster.

The three biggest head-scratchers about Michigan’s new school adequacy study

Ben DeGrow, director of education policy for the Mackinac Center, a Midland-based free-market think tank, said the study doesn’t show a concrete link between increased spending and increased student performance. “It definitely (provides) ammunition to make the legislature skeptical of the results,” DeGrow said.

Despite its shortcomings, supporters point to the study’s findings that it costs more to provide a good education to low-income students than their wealthier classmates.

“The study reinforced one basic finding others have made: that disinvestment in K-12 spending in real dollars over the years has impacted student learning and achievement,” said John Austin, president of the State Board of Education. “The way we spend what money we do spend must change to track the model of high-performing states. The study’s recommendations directly track the strategy of Massachusetts, and the kind of differential spending model based on needs and costs that the State Board of Education has recommended.”

Austin leads the Democrat-majority state Board of Education, but education funding decisions are made by a Republican-controlled Legislature.

Brandon Dillon, chair of the Michigan Democratic Party and former state representative from Grand Rapids, helped push the study through the Legislature. He admits the report has flaws, but he said it gives state leaders a starting point (the $8,677 per pupil funding recommendation) to debate education funding.

“You can have a question about the methodology but we’re having a debate based on data,” Dillon said.

“Nobody would open a $13 billion business without a business plan and that’s essentially what we had.”

But can a state legislature reluctant to raise taxes for a road repairs and a deal to aid the Detroit Public Schools find money for more statewide K-12 spending?

“With this House (of Representatives)? No,” Dillon said. “With this House, there’s no political will.”

“I’m not stupid enough to believe this is going to be easy,” Dillon said. “But I feel optimistic.”