REPORT: Michigan Vastly Underfunds Vulnerable Students Compared to Leading States

New bipartisan coalition calls on state leaders to implement equitable funding strategies, eliminate automatic budget cuts to funding for students from low-income backgrounds, and create strong statewide data systems for fiscal transparency and accountability

(SEPT. 9, 2021) – As students here and across the nation start a new school year after months of unfinished learning due to the COVID-19 crisis, a new analysis by the Education Trust-Midwest shows that Michigan is drastically underfunding its most vulnerable students, including students from low-income backgrounds and others hit hardest by the pandemic, compared to the practices of leading states with comparable funding approaches.

In the new report, Engine of Inequality: Michigan’s Education System, The Education Trust-Midwest examines how Michigan’s school funding compares to leading states’ equitable school funding, as well as to the broader group of states around the country that use student-based funding formulas. The report leverages national research.

Michigan, which has long had one of the most regressive school funding formulas in the country, provides a much smaller investment in English Learners, students from low-income backgrounds, and students with disabilities compared to other states. For example, Michigan has only provided about 9% more funding to most low-income students in recent budget years compared to leading state Massachusetts, which will provide up to about 105% more funding for low-income students in the highest poverty districts after new policies are fully phased in.

The new report comes as The Education Trust-Midwest and a broad cross-section of business, civil rights and civic leaders today formally launched a new statewide coalition – The Michigan Partnership for Equity and Opportunity (MPEO) – to advocate for the state’s most underserved students, including Black and Latino students, English Learners, students with disabilities and students from low-income backgrounds.

Reflecting the great diversity of Michigan – from east to west side, north to south, Black, White, Latino and Arab Americans, and across the political spectrum – the new coalition and its leaders have come together in agreement that Michigan must transform its education system to become an engine of opportunity for all students, including by dramatically overhauling its school funding system.

“Creating a more equitable public school system in Michigan that serves the needs of all students is a fundamental necessity for putting the state on a solid path to becoming one of the top 10 premier education states in our nation,” said Chair of the Education Committee – NAACP Detroit branch, Alice Thompson. Thompson is CEO of BFDI Educational Services, Inc. and a member of the Partnership. “State leaders must create an equitable educational system, including funding equity now. That will move our state closer to improving the success of our most underserved students in high-need and high-poverty districts as well as their educators. We can foster a more stable learning environment, strengthen the talent pool, and improve access and opportunity to high-quality education for all students in our state regardless of their zip code or socio-economic status.”

Dave Meador, vice chairman and chief administrative officer for DTE Energy, said: “Following the practices of leading education states, Michigan leaders should invest at least 100 percent more in low-income students living in highly concentrated communities of poverty.

“Indeed, Michigan should adopt Massachusetts’ funding index approach that calibrates investment based on students’ needs. Michigan also needs to dramatically increase its support and investment in students with disabilities and English Learners,” said Meador, also a member of The Michigan Partnership for Equity and Opportunity.

Amber Arellano, Executive Director of the Education Trust-Midwest, agreed.

“Michigan is underfunding vulnerable groups of students at devastatingly low levels,” said Arellano. “Our public education system is acting as an engine of inequality rather than the engine of opportunity that all Michigan students deserve.  We can change that, and we should start by following the lead of Massachusetts, the nation’s highest performing education state overall.  Funding reforms must be coupled with far greater systems of transparency and fiscal accountability, though.  And the federal stimulus dollars give Michigan the opportunity to build those transparency systems right now.”

With unprecedented amounts of stimulus dollars flowing into the state, the Partnership is calling on state leaders to:

• Vastly remake Michigan’s current public education funding system to be more equitable and address the structural issues in Michigan’s funding system that perpetuate inequities, including by establishing higher weighted funding for underserved students based on leading state practices. For example, Massachusetts uses a tiered system to target higher levels of additional funding – up to about 105 percent more – to support low-income students learning in higher-poverty school districts. This approach more than doubles the funding available for school districts with the greatest need.
• Build systems of fiscal transparency and accountability to make sure resources are used effectively and reach the schools and classrooms of the children for whom they were intended.
• Establish data systems to effectively monitor how the unprecedented levels of federal education dollars are used by local districts and their impact on recovering and accelerating student learning.
• Immediately end Michigan’s automatic cuts to funding for students from low-income backgrounds, which are now triggered in times of budget shortfall without a vote of the Legislature.

“Oftentimes the districts that serve students with the highest level of need are the ones that experience the highest levels of funding inequity,” said Nicole Wells Stallworth, board president for MacDowell Preparatory Academy and a member of the MPEO. “Michigan should prioritize a funding equity model that promotes student outcomes.”

Key research and findings from the Education Trust-Midwest’s report include:

• Michigan’s supplemental funding weight for low-income students is only about one-tenth the size of the weights used in leading states and that research and best practice indicate is needed to provide fair and meaningful access to opportunity.
• The size of the funding increase that Michigan provides for English Learners is among the lowest in the country, compared across the 29 states that apply a weight or multiplier to the foundation amount for these students.
• Michigan’s highest-poverty districts have long received less state and local funding, on average, than Michigan’s lowest-poverty districts despite serving student populations with significantly greater needs.
• Leading states such as Massachusetts and Maryland have recently passed new policies to provide significantly more funding for low-income students and English Learners than Michigan provides.

In its report, The Education Trust-Midwest proposes strategies that state leaders should implement to prioritize Michigan’s vulnerable students – especially low-income students, English Learners and students with disabilities. Those dovetail with the Partnership’s call for more transparency and accountability for new investments.

Learn more about The Michigan Partnership for Equity and Opportunity here.

Organizations joining the new coalition calling for a more fair and equitable school funding formula include:

• 42 North Partners
• ACCESS
• Autism Alliance of Michigan
• BFDI Educational Services, Inc.
• Detroit Parent Network
• DTE Energy
• Education Trust-Midwest
• Franklin Wright Settlements, Inc.
• Hope Network Michigan Education Corps
• Ignite Social Media
• Latinx Technology & Community Center of Flint
• MCAN (Michigan College Access Network)
• Michigan Achieves! Leadership Council
• Community Foundation for Muskegon County
• MacDowell Preparatory Academy
• Grand Rapids Community Foundation
• Strong Beginnings-Healthy Start of Grand Rapids
• Urban League of West Michigan
• Hispanic Center of Western Michigan