The per-pupil state revenue considered here is not equivalent to Michigan’s frequently discussed “state foundation allowance.” Only part of the state foundation allowance is composed of state revenues; the remainder of the allowance is composed of local revenues. The local revenues that are part of the foundation allowance were included in the figures provided in the previous section, while the state revenues that comprise the remainder of the foundation allowance are included in the figures presented below. Also included are state education grants and other state revenue that is provided independent of the foundation allowance. State revenues are raised primarily through the state sales tax, use tax, income tax and 6 mill property tax.[*]
Unlike per-pupil local funding, state funding per student from 2004 to 2010 did not change much for any locale group (see Graphic 5). The suburban group received more per-pupil state funding in 2010 than in 2004, an increase from $6,767 to $6,943, or about 3 percent. City, towns and rural locale groups all experienced slight declines. Remote town and remote rural subgroups experienced the largest percentage decrease in state funding per pupil among the 12 subgroups from 2004 to 2010. Per-pupil money from the state dropped by 9 percent for remote town subgroups and 11 percent for remote rural subgroups.[†]
As noted above, Michigan’s foundation allowance is comprised of both state and local tax revenue. The foundation allowance is designed so that a relative decline in the local revenue generated for a particular district’s foundation allowance corresponds to a relative increase in the state revenue provided for that district’s foundation allowance. Inversely, a relative increase in the local-source revenue for a district’s foundation allowance corresponds to a relative decline in the state-source revenue for the district’s foundation allowance.
Since large portions of a district’s total local revenue (discussed in the previous section) and total state revenue (discussed here) are dedicated to a district’s foundation allowance, relative increases in a district’s overall local revenue will tend to correspond to relative decreases in the district’s overall state revenue. For instance, the remote rural subgroup saw its per-pupil local funding increase by 54 percent from 2004 to 2010 (the second highest of the 12 subgroups, behind DPS), but also had the largest per-pupil state revenue decline (11 percent) over that time.[‡]
Among the four major locale groups, the city locale group received the most state revenue per pupil in 2010 ($7,082). Among the 12 subgroups in 2010, DPS received the most state revenue per pupil ($8,056), and the remote town subgroup received the least ($5,114).[§]
Graphic 5: School District Revenue per Pupil From State
Locale Group, Michigan, Fiscal Years 2004-2010
Source: Local Education Agency Universe Survey; Michigan Department of Education, Data for National Public Education Financial Survey
[*] Olson and LaFaive, A Michigan School Money Primer: For Policymakers, School Officials, Media and Residents (Midland, MI: Mackinac Center for Public Policy, 2007), 37-40, 45. Numerous other state taxes are also included.
 Olson and LaFaive, A Michigan School Money Primer: For Policymakers, School Officials, Media and Residents (Midland, MI: Mackinac Center for Public Policy, 2007), 55-78.