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January 29, 2021

Michigan should fill in funding gaps created by federal education formula

In a Nutshell:

  • Michigan schools will share in nearly $2 billion in federal education relief funds, most of this through an existing federal formula that generates wide funding differences across districts
  • State policymakers will have access to, and control over, a small pot of money from Uncle Sam to help students during and after COVID
  • They should use these funds to fill in the wide per-student funding gaps created with the $2 billion already distributed by existing federal formula

Michigan will have at least another $205 million in discretionary federal education relief funds to help public schools reopen safely and meet their students’ learning needs during and after the pandemic. Lansing policymakers should prioritize these dollars to fill in the gaps created by the distribution of over $1.8 billion already made to districts. Filling in these gaps will provide all students, regardless of which school they attend, with more equal opportunities to catch up on the learning delays caused by the pandemic.

Both federal and Michigan policymakers have appropriated large sums of taxpayer dollars for public schools to operate safely and respond to the student learning disruptions caused by the pandemic. Over $1.8 billion (about 90 percent) of all K-12 education funding allocated to Michigan in the two federal stimulus packages goes directly to local districts (traditional public and charter schools) through an existing federal formula. The Title I formula directs greater funding to schools with high numbers or percentages of children from low-income families. As a policy, relying on this formula to allocate some of the relief funds is appropriate because poorer families and the schools they attend have been hit particularly hard by the pandemic.

The Title I program,  modified over the decades, dates back to President Lyndon B. Johnson’s “War on Poverty” and is structured to address the compensatory education needs of low-income children. While not without its critics, it is the largest pot of federal funds for states and will bring Michigan $446 million this school year. 

As a proxy for determining the needs of all schools and students arising from COVID-19, the various components of Title I are poor measures. Title I does not align federal funds to student needs today. It results in far more money per student going to some districts compared to others that serve similar student populations. Further, it fails to recognize that there are a number of added costs of pandemic learning that all districts must pay for. This includes districts, regardless of their student population and location in the state, that generally don’t receive large Title I allocations. Bottom line – the formula does not guarantee each public school student a minimum amount of funding to meet these basic costs.

This is where Michigan policymakers can step in and use the discretionary federal dollars available to the state to fill in the funding gaps arising from Title I.

While state officials have no control over the distribution of most relief funds, they do have authority over smaller federal pots of money. Michigan received nearly $100 million from last spring’s CARES Act that it allocated to school districts  –  $37 million to address student technology needs and mental health, and $60 million for districts with a high percentage of low-income students.

We know that Michigan will receive another $205 million in federal discretionary funds from December’s relief package. This includes $165.6 million reserved for state-directed priorities from the Elementary and Secondary School Education Relief Fund and $38.9 million for the governor to allocate among local schools and/or higher education institutions. There are few restrictions placed on the use of either pot of money in responding to the pandemic or how the state allocates the dollars. But, the funds have to be appropriated by the legislature before they can be spent and they must be used by September 2023. 

Before settling on a method(s) to distribute these discretionary dollars, policymakers should examine all the pandemic-related funds schools have received thus far and how that money has been allocated among districts on a per-student basis. They should take note of the massive funding disparities across Michigan schools caused by existing formula allocations and prioritize the remaining discretionary funds to minimize the wide differentials in per-student money already received. 

This way the state can guarantee that all districts will have a minimum level of resources to serve all students. Doing so will not undo Congress’ priority of directing more funding to schools and students most impacted by COVID-19, a laudable priority. Again, over 90 percent of all federal pandemic-related funds already distributed have gone through the Title I formula. That will not change.

Michigan policymakers should prioritize the remaining federal relief funds available to the state, in tandem with the funds already distributed, to work towards two spending priorities. First, a guarantee that all students, regardless of the school they attend, will have an equal chance to recover academically what has been taken from them by COVID-19. And, second, that those students most affected by the pandemic are resourced at a higher level to meet their additional learning needs.

Michigan should fill in funding gaps created by federal education formula

In a Nutshell:

  • Michigan schools will share in nearly $2 billion in federal education relief funds, most of this through an existing federal formula that generates wide funding differences across districts
  • State policymakers will have access to, and control over, a small pot of money from Uncle Sam to help students during and after COVID
  • They should use these funds to fill in the wide per-student funding gaps created with the $2 billion already distributed by existing federal formula

Michigan will have at least another $205 million in discretionary federal education relief funds to help public schools reopen safely and meet their students’ learning needs during and after the pandemic. Lansing policymakers should prioritize these dollars to fill in the gaps created by the distribution of over $1.8 billion already made to districts. Filling in these gaps will provide all students, regardless of which school they attend, with more equal opportunities to catch up on the learning delays caused by the pandemic.

Both federal and Michigan policymakers have appropriated large sums of taxpayer dollars for public schools to operate safely and respond to the student learning disruptions caused by the pandemic. Over $1.8 billion (about 90 percent) of all K-12 education funding allocated to Michigan in the two federal stimulus packages goes directly to local districts (traditional public and charter schools) through an existing federal formula. The Title I formula directs greater funding to schools with high numbers or percentages of children from low-income families. As a policy, relying on this formula to allocate some of the relief funds is appropriate because poorer families and the schools they attend have been hit particularly hard by the pandemic.

The Title I program,  modified over the decades, dates back to President Lyndon B. Johnson’s “War on Poverty” and is structured to address the compensatory education needs of low-income children. While not without its critics, it is the largest pot of federal funds for states and will bring Michigan $446 million this school year. 

As a proxy for determining the needs of all schools and students arising from COVID-19, the various components of Title I are poor measures. Title I does not align federal funds to student needs today. It results in far more money per student going to some districts compared to others that serve similar student populations. Further, it fails to recognize that there are a number of added costs of pandemic learning that all districts must pay for. This includes districts, regardless of their student population and location in the state, that generally don’t receive large Title I allocations. Bottom line – the formula does not guarantee each public school student a minimum amount of funding to meet these basic costs.

This is where Michigan policymakers can step in and use the discretionary federal dollars available to the state to fill in the funding gaps arising from Title I.

While state officials have no control over the distribution of most relief funds, they do have authority over smaller federal pots of money. Michigan received nearly $100 million from last spring’s CARES Act that it allocated to school districts  –  $37 million to address student technology needs and mental health, and $60 million for districts with a high percentage of low-income students.

We know that Michigan will receive another $205 million in federal discretionary funds from December’s relief package. This includes $165.6 million reserved for state-directed priorities from the Elementary and Secondary School Education Relief Fund and $38.9 million for the governor to allocate among local schools and/or higher education institutions. There are few restrictions placed on the use of either pot of money in responding to the pandemic or how the state allocates the dollars. But, the funds have to be appropriated by the legislature before they can be spent and they must be used by September 2023. 

Before settling on a method(s) to distribute these discretionary dollars, policymakers should examine all the pandemic-related funds schools have received thus far and how that money has been allocated among districts on a per-student basis. They should take note of the massive funding disparities across Michigan schools caused by existing formula allocations and prioritize the remaining discretionary funds to minimize the wide differentials in per-student money already received. 

This way the state can guarantee that all districts will have a minimum level of resources to serve all students. Doing so will not undo Congress’ priority of directing more funding to schools and students most impacted by COVID-19, a laudable priority. Again, over 90 percent of all federal pandemic-related funds already distributed have gone through the Title I formula. That will not change.

Michigan policymakers should prioritize the remaining federal relief funds available to the state, in tandem with the funds already distributed, to work towards two spending priorities. First, a guarantee that all students, regardless of the school they attend, will have an equal chance to recover academically what has been taken from them by COVID-19. And, second, that those students most affected by the pandemic are resourced at a higher level to meet their additional learning needs.

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