For Immediate Release

Contact:          Craig Thiel
Organization: Citizens Research Council of Michigan
Phone:            517-485-9444
Email:             cthiel@crcmich.org
Web:              crcmich.org
Date:              February 1, 2023

Lansing, MI – Last week, Michigan Governor Gretchen Whitmer called for increased state investments in K-12 education including new tutoring and afterschool programs to address the sizeable learning losses students experienced during the pandemic. These efforts are laudable and likely necessary to help students recover academically, but the Governor’s call for additional state spending in these areas is a bit premature and ignores that fact Michigan public schools still have available to them billions of federal relief dollars that could be programmed for such purposes. School districts have spending deadlines to be met or else the dollars will revert back to the federal government.

A new report from the Citizens Research Council of Michigan, Spending Deadlines Hang over $3.5 Billion of Unspent Federal K-12 Education Relief Funds, offers an updated snapshot of state- and district-level spending of the nearly $6 billion in K-12 relief dollars Michigan public schools received, including how quickly these governments are drawing down their allocations and the amount of unexpended funds still available as of late 2022. With just over 18 17 months to go before schools hit the deadline to exhaust their federal aid allotments, this report examines how the remaining federal funds are impacting their near-term finances, the challenges and considerations some schools face as school districts move into this period, and why state policymakers should take note of the considerably large balances some schools have as they prepare to write the upcoming state K-12 education budget and determine the best uses for a $4.1 billion School Aid Fund budget surplus.

In a Nutshell

• As of October 2022, Michigan’s traditional and charter public schools have spent $2.1 billion of the nearly $5.6 billion federal COVID-19 dollars directly allocated to them under the last two federal relief packages. This leaves them with another $3.5 billion to program over the current and next two school years, before hitting the September 2024 federal spending deadline.
• Just 95 of Michigan’s 800-plus school districts account for $2.3 billion of the total $3.5 billion in unspent federal aid. These districts comprise approximately 12 percent of all districts in the state, but they account for nearly seven of every ten unspent federal relief dollars. Some of these districts have remaining federal per-pupil balances equivalent to two or three times their annual $9,150 state per-pupil foundation allowance.
• State policymakers should take note of the amount of federal relief funds that schools still have at their disposal and, just as importantly, which districts have the largest balances remaining.  This information should be factored into upcoming state budget decisions to ensure that future state School Aid Fund investments in K-12 schools are appropriately leveraged to address the educational recovery needs of all Michigan school children affected by the pandemic and to fill in the funding gaps for those schools that did not receive large allotments of federal relief funding and on supporting those schools where students are furthest behind academically and developmentally.

“State policymakers should take note of the amount of federal relief funds that schools still have at their disposal and, just as importantly, which districts have the largest balances remaining,” said Craig Thiel, Research Director.  “This information should be factored into upcoming state budget decisions to ensure that future state School Aid Fund investments in K-12 schools are appropriately leveraged to address the educational recovery needs of all Michigan school children affected by the pandemic.”

Based on the most recent state revenue estimates, there is roughly $3,000 per K-12 student in School Aid Fund surplus dollars available to appropriate for K-12 education in the current FY2023 and/or the FY2024 state budgets. Of this total, $2,000 per student is considered one-time, nonrecurring funding. For some schools, these funds would come on top of the large sums of one-time federal dollars they have yet to program and spend on services to address student needs arising from the COVID-19 pandemic. 

“We are certain that the school districts would gladly accept more state funding,” Thiel continued, “but there are challenges to spending sums this large. State officials must ensure that these resources are used most economically and efficiently. That may require them to allocate state surplus dollars, especially the one-time resources, to those schools with fewer federal resources to spend.”

Paper copies available upon request.