Public Education Finance Act

Any Time, Any Place, Any Way, Any Pace

GILBERT: The time is now for school funding debate

Of The Oakland Press

School funding is becoming a more complicated issue, according to a recent University of Colorado study done for the Boulder-based National Education Policy Center.

This line of thought is likely to manifest itself throughout this year in Lansing as the state considers a variety of reform proposals involving charter and cyber schools of choice.

The most common way of thinking about school funding has been per-pupil spending.

“On the face, a ‘neutral’ policy would simply allot the same amount of money per student to a school of choice as it would to a conventional public school,” states the study entitled “Public Funding of School Choice” authored by William Mathis. This has pretty much been the practice in Michigan.

“But … the issue is far more complicated,” the study continues. “For example, student populations may vary. Schools that serve autistic children will have different cost requirements than a school with a high population of economically deprived children. Further, while cyber schools require technology-related resources, they require only minimal resources for facilities, maintenance expenses and transportation. Should these schools receive the same amount of money as a school that must pay these expenses? There are no easy or value-free answers to these issues.”

A proposal by the Oxford Foundation ( that is widely thought to reflect the thinking of Gov. Rick Snyder would allow Michigan students to split their annual funding allocation among multiple providers. They would be able to pick and choose programs  offered by any public district, though their amount would still be determined by their district of residence.

Per-pupil allocations vary by district. There is a minimum per-pupil state foundation allowance — it is $6,996 for the current school year — but the actual allowance varies by district,  depending on property tax revenue and other factors. For example, the 2012-13 figures in Oakland County range from $6,996 in Madison, South Lyon, Brandon, Holly and Huron Valley districts  to a high of $11,854 for Bloomfield Hills.

Many districts remain above the state average because they were labeled “hold harmless” entities so as to prevent reductions when the current school funding system was devised in the 1990s.

The Oxford Foundation proposal would reform Michigan’s school finance system, but Oakland Intermediate School officials say the funding issue should be the subject of a comprehensive study first. No such study has been carried out in 43 years, they say.

Among variables that can make the average costs irrelevant are numbers of at-risk students per district, special education, cost-of-living and size of district. Also, it is less costly to serve elementary students than students in higher grades.

Actual costs need to be taken into consideration, Oakland school officials say.

“Should tax-based funding be predicated on actual spending (cost-plus) or on a set amount per pupil?” asks the Colorado study. “A set amount gives market-oriented operations an incentive to keep salaries low and class size high. A cost-plus system doesn’t discourage funding a high-quality education but it has no incentive to keep costs low or efficient. Again, there are no easy or absolute answers to these dilemmas.”

“There are also unique school factors such as age and condition of the facility, variations in contracted services, rurality, and availability of community services. Compounding an already complicated topic is the funding of private and public combinations. Should public school cocurricular activities such as school-sponsored clubs and teams be available for students enrolled in a cyber-school? Does the local school, the state or the cyber-school pay the costs?”

The proposed rewrite of the school aid formula “does raise a number of questions that may require study,” said Jeffrey  Guilfoyle, president of the non-partisan and highly respected Citizens Research Council. “The foundation allowance represents the average cost of educating a child. If you are going to allow the foundation allowance to be split, it raises all types of pricing questions.”

Guilfoyle said that among them are:

  • How much should be appropriated for the fixed costs of running a district for things like record keeping, or supporting extra curricular activities like band or football?
  • If a student takes four classes at their traditional school and one from an online charter, how much of the foundation allowance should be available to go to the online charter?  Does it matter what grade?  Does it matter what subject?
  • What if a really smart student wants to take more than a full load of classes? Should they get extra foundation allowance that they could use to take a class online or at a community college in addition to their regular load?
  • Should any students get a bigger allowance — for example at-risk, or for students below grade level trying to catch up?
  • Should we do something to even the burden of legacy costs between traditional providers and new providers?

“The risk with the rewrite is that you price things incorrectly and potentially let providers skim off low-cost opportunities (sort of like an insurer just insuring healthy people), putting a lot of fiscal pressure on traditional districts,” Guilfoyle said.

Disputing the notion that simply giving charter schools the foundation allowance for their students unfairly benefits such entities,  James N. Goenner, president and chief executive officer of the Mt. Pleasant-based National Charter Schools Institute points out that charters must derive both operating and facility costs from their funding. Unlike traditional public districts, they have no taxing authority to raise money for buildings.

“You can’t leave the capital side off” in determining a fair method of funding, Goenner said.

Clearly the state is in for a full debate on the subject, probably this year.

It is long overdue.