Executive Summary

In the passionate debates over providing equal educational opportunity for all children, it’s frequently argued that large financial inequities create challenges for many public schools, particularly those in lower-income urban areas. This study compares the revenues and operating expenditures of Michigan’s urban, suburban, town and rural school districts.

The study groups Michigan school districts using locale codes applied to public schools by the National Center for Education Statistics. The four major locale groups — city, suburb, town and rural — are divided into 12 subgroups: city-large, city-midsize, city-small, suburb-large, suburb-midsize, suburb-small, town-fringe, town-distant, town-remote, rural-fringe, rural-distant and rural-remote. The locale groups’ and subgroups’ financial data from fiscal 2004 to fiscal 2010 are analyzed. School districts’ revenues are divided into local, state and federal sources, while operating expenditures are divided into 10 categories, including instruction, general administration and student support services.

The study’s findings provide a new and unique perspective on Michigan’s school districts. For instance, the data show that on average, the districts comprising the city locale group received the largest total revenues per pupil and logged the largest operating expenditures per pupil from fiscal 2004 to fiscal 2010. In fiscal 2010, the city locale group received $12,906 per pupil in total revenues — 13 percent more than the next-highest locale group (the suburban) — and spent $13,115 per pupil on operations — 23 percent more than the next-highest locale group (again the suburban).

The analysis also indicates that the town and rural locale groups, which generally had lower per-pupil operating expenditures than the city and suburban locales, dedicated a slightly larger portion of their operating expenditures to instruction — about 63 percent each in 2010. The suburban and city locale groups devoted about 61 percent and 58 percent of their operational spending to instruction, respectively.

Several similarities among districts also emerged from the data. For example, from fiscal 2004 to fiscal 2010, per-pupil operating expenditures on instruction and food services increased by at least 14 percent and 13 percent, respectively, in all 12 locale subgroups. Additionally, in 2010, the four major locale groups dedicated a similar portion of their operational spending to school administration expenditures, ranging from 5.4 percent in the city locale group to 6.1 percent in the town.

This study does not attempt to deduce reasons for the differences between districts or determine the “appropriate” or “adequate” levels of district revenues and spending. Nor does it discuss the performance of districts on such measures as student achievement, parental satisfaction or school safety. Thus, this study does not provide specific policy recommendations. The data and findings should prove interesting to state officials, education researchers, education reporters, school officials and others interested in Michigan public school finance.