For Immediate Release:
October 16, 2014

Contact: Craig Thiel (517-485-9444)
or Eric Lupher (734-542-8001)

New CRC Report Sets Record Straight on Recent K-12 Funding History
Lansing, MI. Education funding has taken a front row seat in the current political debate. Claims and counter-claims about changes in state funding for K-12 education abound. As a result, citizens are left scratching their heads about what to believe.
To help clear up some of the confusion, the Citizens Research Council of Michigan (CRC) is releasing a new report on the topic, Making Sense of K-12 Funding. The report explores the recent history of K-12 funding, discusses the important factors affecting the amount of money that school districts receive, and analyzes how much money is available to deliver classroom instruction.
“After listening to the back-and-forth on the issue, we decided it was time to set the record straight,” said Craig Thiel of CRC. “While the raw numbers show an absolute increase in state funding in recent years, this fact alone does not paint a complete picture of public school finances — the actual situation is much more nuanced,” added Thiel.
CRC’s new report answers three fundamental questions:
1) “Is school funding up or down compared to four years ago?”
Here the answer is an unequivocal ‘up’. While total state funding is up over $1 billion from FY2011 to FY2015, the increase is almost exclusively earmarked to satisfy school employee retirement costs, specifically legacy costs arising from the financial market downturn and state retirement system reforms.
2) “Has education funding gone up as much as it could have?”
Here the answer is ‘no’. State tax policy and budget decisions effectively stretched the School Aid Fund, leaving fewer dollars available for distribution to K-12 schools. The personal income tax and business tax reforms of 2012 substantially reduced the amount of state tax revenue deposited in the School Aid Fund. Also, lawmakers decided to fund certain state higher education appropriations from the School Aid Fund. Combined, these decisions have effectively reduced the amount of state resources schools receive.
3) “Are individual school districts better off today than they were four years ago?”
An answer to this question is far less definitive. While the amount of per-pupil funding is up, districts are paying higher retirement bills. This leaves fewer resources for other school expenses. Also, total funding at the district level is greatly influenced by the number of students enrolled. Because declining enrollment is a pervasive issue across the state, the vast majority of traditional public school districts must manage with less non-retirement funding.
CRC’s report is available at no cost on the Citizens Research Council’s website, www.crcmich.org.
Founded in 1916, CRC works to improve government in Michigan. The organization provides factual, unbiased, independent information concerning significant issues of state and local government organization, policy, and finance. By delivery of this information to policymakers and citizens, CRC aims to ensure sound and rational public policy formation in Michigan. For more information, visit www.crcmich.org.