Michigan’s Forthcoming School Funding Adequacy Study

In December 2014 the Michigan Legislature approved a formal “comprehensive statewide cost study,” also referred to as an “adequacy study,” as part of a deal to win bipartisan support for a transportation funding ballot measure.[7] Shortly after Proposal 1 of 2015 failed handily at the ballot box, the study was included in the Legislature’s formally adopted 2015-16 budget.[8] Denver-based Augenblick, Palaich & Associates secured the contract bid for $399,000.[9] Within 30 days of the March 31, 2016, deadline called out in law, the Michigan Department of Technology, Management and Budget must submit the findings to the governor and to the Legislature.[10] The original statutory deadline was not met, but the department granted APA an extension to complete its work by May 13, 2016.[11]

APA describes the project as an examination of “the revenues and expenditures of successful districts in the state, the equity of the state’s finance system, and the cost differences for non-instructional expenditures.”[12] In the 1990s the original cofounders of APA pioneered the “successful school district” approach, one of the two most common methods used to formulate the estimates for funding recommendations in similar studies.[13] The other, known as the “professional judgment” approach, derives its estimates by asking panels of school district officials what resources they need to reach successful rates of academic achievement or other systemwide performance goals.[14]

School funding adequacy studies are not new: There were 39 such studies performed in 24 different states between 2003 and 2014. Of these, 38 concluded that additional tax dollars were needed to meet the designated standard of adequacy. APA conducted 13 of these 39 studies, recommending a funding increase every time.[15]

In 2005 APA used the professional judgment method to assess Connecticut’s school finance system, which at the time ranked fourth nationally in per-pupil revenue.[16] Its recommendation called for a 35 percent increase to make the Nutmeg State’s K-12 funding “adequate.”[17] Public schools in the District of Columbia receive more money on average per pupil than any other jurisdiction in the nation (over $29,000 per student), and APA also recommended that its funding be increased by 22 percent.[18]

APA’s standard approaches have been extensively criticized. James Guthrie and Matthew Springer assessed eight APA studies using the professional judgment method. They found dramatically different prescriptions across APA’s studies for the number of “instructional personnel” needed to serve each 1,000 students, a core factor in attempts to estimate the cost of providing an adequate education. Maryland experts claimed to need 116 instructors per 1,000 students; Indiana experts said 63 would do the trick. Guthrie and Springer said the disparity would “suggest, at a minimum, that there is no science involved in such estimations.”[19]

Hanushek similarly has demonstrated a wide variation in the spending levels of “successful school districts,” casting doubt on the appropriateness of one of the more common approaches used in estimating adequate school funding levels. The fact that schools and districts can achieve similar results while differing in how much they spend suggests that adequate levels of funding can vary district by district or school by school. According to Hanushek, “[T]here is no evidence to suggest that the methodology used in any of the existing costing-out approaches … is capable of answering” how much overall funding is needed to attain specific levels of performance.[20]