In a Nutshell

• The COVID-19 pandemic and the shift to remote learning forced Michigan to change how it counted students attending K-12 schools last year and how the state funded those schools.
• With a return to in-person learning for many districts this year, the state will require districts to count students physically present in their schools on student count day to claim the per-pupil funding guaranteed to each student.
• The return to the state’s “normal” student count practices does not alleviate concerns schools have about their fall enrollment numbers and the state dollars tied to those numbers.

Lansing lawmakers this week were putting in place the final pieces of next fiscal year’s state budget. This comes just one week before the start of the 2021-22 fiscal year (October 1) and nearly three full months after lawmakers left town for their traditional summer recess without meeting their legal deadline of July 1 to complete work on the upcoming state spending plan. 

But, while all types of local governments, hospitals, universities and colleges, and many other public and private entities across the state had to wait for Lansing to craft a new budget, the state completed its budget for Michigan public schools in July. Governor Whitmer and legislative leaders reached consensus and passed the Fiscal Year 2021-22 (FY2022) School Aid budget before lawmakers recessed for summer in July, well in advance of the first day of school this fall.  

This was good news for local public schools as it provided some clarity about the amount of state funding they could expect over the coming year. The state budget includes funding for everything from general school operations to financial support for specific student subpopulations such as economically-disadvantaged, special education, and English language learners. However, many of these state allocations are based on the number of students that physically show up to school on fall count day – a number that will not be known until October 6.

One part of the funding equation already set

As we noted in our previous analysis of the FY2022 School Aid budget, lawmakers used the very healthy School Aid Fund revenue projections to eliminate long-standing per-pupil funding inequities across schools. Specifically, the FY2022 budget closes a $418 per-pupil gap that existed between the state’s lowest-spending districts and higher-spending districts. This finalizes a journey to equalize per-pupil funding across the state initiated in 1994 with the Proposal A school funding system.

This historic funding decision cost the budget nearly $723 million because approximately two-thirds of Michigan’s 1.5 million public K-12 students received the minimum foundation amount ($8,111) last year. In finally closing this funding gap (originally $2,300 in FY1995), all Michigan public K-12 school districts, charter and traditional alike, will now receive the same $8,700 per-student foundation grant. 

The foundation grant provides the bulk of the operating funding schools receive each year, but it is only one piece of the fiscal puzzle. While the School Aid budget establishes the amount of per-pupil funding tied to each student enrolled, the actual enrollment numbers are based on attendance taken in early October. Thus, a substantial amount of a school’s overall operational funding for the year is determined by the official student counts. The upcoming October 6 student count day will look very different from last year’s when very few students were attending school in-person and physically present on count day.

Things looked really different this time last year

This fall marks the third school year affected by the COVID-19 pandemic. At the onset of the pandemic in spring 2020, schools scrambled to pivot to remote instruction as schools were forced to close their doors through the remainder of the year. The start of the school year last fall, just six months into the pandemic, was anything but normal for public education. Even the basic task of taking attendance was a challenge. Because many schools had moved to remote learning only, while others offered a hybrid model of instruction, counting students physically present in a school building on a particular day was not an option. The state did not have a method for counting students attending school virtually. 

That is why state officials, in late August 2020, adopted entirely new and different methods to count students and distribute state aid. Districts operating in a fully online or hybrid environment, rather than conducting a physical count of students, had to determine the number of students “engaged in pandemic learning” on count day.  This involved documenting that students had multiple two-way interactions with their teachers or that students participated in course-related activities in each class on count day.

In addition to modifying how students were actually counted for enrollment purposes, the state changed the weighting assigned to the fall 2020-21 student count for purposes of distributing state aid.  To help cushion the financial blow to many districts from fewer students enrolling last fall, Lansing officials changed the law so that the fall 2020-21 student count accounted for just 25 percent of a district’s enrollment (instead of 90 percent) with the other 75 percent tied to the previous year’s enrollment (i.e., pre-pandemic student counts). Nearly 90 percent of traditional public school districts, as well as 60 percent of charter districts, financially benefited from this change.

Back to normal for counting students this fall

Students across the country are returning to school this fall to find that COVID-19 continues to challenge the delivery of public education services in many ways. While things in Michigan public schools are far from “normal” at the current moment  – just look at the increasing tensions over mask requirements and vaccine mandates that have inundated school board meetings – there have been some pivots back to the old, standard way of doing things. Included in this list is a return to the state’s traditional method for counting students enrolled in public schools. This means that districts’ financial fortunes will, once again, rest heavily on counting the number of students in school buildings on October 6.

The fall student count is just one of two count days conducted each school year. This fall count is “blended” with the count from the previous spring to arrive at a total enrollment figure. Because the October student count again carries the greatest weight (90 percent), a lot is riding on the result of the fall count. The previous spring’s count (10 percent weighting) is used to help declining enrollment districts ease into the reduced funding levels that often accompany a decline in fall enrollment.

Declining Enrollment and COVID-19

Though the State of Michigan pivoted back to its “normal” student counting practices this fall, Michigan’s shrinking population, as reflected in lower birth rates, means that the school-age population has been declining for some time. After continuously growing through the 1990s and early 2000s, statewide enrollments have been on a continuous decline since fall 2002. Total public school membership has shrunk nearly 20 percent since. As a result, budgeting for declining enrollment, even before the pandemic, had become a norm for many schools. 

The COVID-19 pandemic did little to halt the statewide trend for traditional public school districts. In fact, the pandemic-induced learning disruptions had a knock-on effect for many of these districts.  Nearly 90 percent of all traditional districts saw an enrollment decline last year. Pre-pandemic, about two-thirds of all traditional districts each year lost enrollment. The same cannot be said of charter school districts, which, as a group, saw a modest enrollment bump last year.

As the results of the October 6 student count become known, school officials will revisit their original budgets to see where things stand. Many districts, including the Detroit Public Schools Community District, have been banking on sizable bumps in their enrollments after being down last year. For declining enrollment districts, the fall count will reveal the magnitude of their enrollment loss and the associated financial effects. In any case, with a return to the “normal” student count practices, if districts’ original estimates were too optimistic, spending adjustments will have to be made in the coming months to balance budgets. 

Permission to reprint this blog post in whole or in part is hereby granted, provided that the Citizens Research Council of Michigan is properly cited.