Does Michigan devote enough money to primary and secondary education? Do school districts receive enough revenue to ensure the vast majority of enrolled students graduate college or career ready? How much does it cost to provide a quality educational experience? These are the types of questions for which the Michigan Legislature recently paid nearly $400,000 to obtain some answers.

These answers would clearly be helpful to policymakers who determine how many tax dollars to allocate to schools. But these concerns about the adequate level of school funding are based in part on the common assumption that spending more on K-12 schools will generate better academic outcomes. A more fundamental question that policymakers might want to answer before determining the appropriate level of funding for schools is: What is the relationship between school spending and student achievement in Michigan?

That is the question this paper attempts to answer.

The bulk of the research on this question has typically shown that there is little correlation between spending and achievement, but it is possible that Michigan’s public schools are an exception to this finding. To test this hypothesis, this study uses a large data set containing detailed spending, standardized test scores and student demographic information from more than 4,000 individual public schools in Michigan from 2007 to 2013. Using building-level data, as opposed to data grouped at the district level, allows for a more precise examination of the relationship between school spending and student achievement.

The study employs a multiple regression analysis to examine whether the data show a relationship between school spending and student achievement. It looks for a statistically significant correlation between how much an individual school spends per pupil and how well its students perform on one or more of 28 measurements of academic achievement. The indicators include results from three different standardized tests as well as graduation rates for high school students. 

The results from this analysis of recent Michigan-specific data suggest that there is no statistically significant correlation between how much money public schools in Michigan spend and how well students perform academically. This finding is consistent with what the bulk of previous research has found. The results from this analysis suggest that student achievement is unlikely to improve by simply spending more on Michigan’s current public school system, all else being equal.