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Funding equity. What does it mean? Why does it exist? How do we fix it?
In talking to schools, including many traditional schools, funding is one of the biggest challenges educators face. For charter schools, the number one priority MAPSA hears each year from members is around funding equity.
What does it mean?
Funding equity simply means that every student in Michigan is worth the same amount of funding at each of his or her public school. There are circumstances that students with special needs, English Language Learners, etc. might get additional funding, but every student in Michigan should start at the same level of funding. MAPSA has diligently worked hard at advocating for funding equity in the state and will continue to do so until lawmakers level the playing field for kids.
Why does the inequity exist?
In Michigan, schools are funded at hundreds of different levels. This disparity is a relic of the past where all schools were purely funded with local tax millages prior to the passage of Proposal A. With Proposal A, the idea was to freeze and then supplement the local revenue with money from the increased sales tax. The State also decided then to fund schools on a per-pupil basis with what is called a foundation allowance, allowing the funding to follow the student to any public school they wished to attend. The State would eventually raise the lower funded schools to the level of the higher funded schools and every student would be funded equitably across the state, regardless of their zip code
However, funding equity is not only closing the gap between Michigan’s highest and lowest foundation allowances, but also about providing access to the same types of resources for things like facilities. Traditional schools can still tax their residents for all of the capitol infrastructure costs with local bond issue votes. Charter schools must pay for all of their facilities with their foundation allowances. Traditional districts can pass sinking fund millages to cover on-going facilities maintenance, and this was recently expanded to also cover security and technology with a bill now pending to expand it to buses as well. The newest form of local tax revenue for schools is a regional enhancement millage. These are millages that tax every tax payer in an ISD, and the funds are distributed to every traditional district on a per student basis. The most recent regional enhancement millage that passed in Wayne RESA provides every student at all traditional districts with $385 per year that charter school students by law do not have access to receive.
How can we fix it?
Each year the Governor proposes a school aid budget, and the legislature passes it. The legislature has a long standing principle called “2x” where the schools that get lower foundation allowances (including all charter schools) get twice the increase that schools who receive the highest foundation allowance. This year, the Governor and Senate used the 2x in their budgets, but the House did not. The charter school sector needs to continue to encourage the legislature to continue to use the 2x formula (or more) to close the funding gap. Imagine what your school could do with $1,000 more per student? CLICK HERE TELL YOUR LEGISLATOR
The biggest impediment to get to funding equity is lack of available funds for foundation allowance increases. The biggest drain on the school aid fund currently is the Michigan Public School Employee Retirement System (MPSERS). A billion dollars off the top of the school aid fund is being used to pay off legacy debt from bad financial projections made for the system in the past. While tweaks have been made to the system over the years, the system is draining the school aid fund, and there is no end in sight. Proposals have been floating around Lansing to close the system (the only state system that has not moved to a 401k retirement) to NEW hires only and slowly shut it down over time. This won’t be an immediate windfall of cash for schools, but it will stop the leak in the bucket and over time free up over $1 billion dollars in the school aid fund that could be used for equity.