News Story

Study 'Segregates' School District Borders By Ignoring Key Data

Where's the other 27 percent of the Detroit schools' budget?

A New Jersey-based nonprofit organization called EdBuild that says it wants to bring common sense to school funding discussions released a report calling Detroit and Grosse Pointe schools the “most segregating school district border in the country.”

But to make its case, the organization ignored $225.7 million of Detroit Public Schools’ total revenue — a full 27 percent of its budget — because it failed to include federal funding, which is the largest funding advantage the district has over suburban districts.

EdBuild’s report is nevertheless getting nationwide media coverage.

It states, “Increasingly, the story of American school districts is a tale of two cities: one well-off and one poor – one with the funds necessary to provide its children ample educational opportunities and one without adequate resources to help its children catch up.”

But the Detroit school district received far more total revenue than the neighboring Grosse Pointe district when the complete funding picture is examined.

According to the Michigan Department of Education, DPS received $13,743 per pupil in General Fund revenue in 2014-15, which covers daily operations, including payroll. By comparison, Grosse Pointe received $12,149 per pupil.

DPS received more because it got $3,494 per student from the federal government, compared to just $338 per student at Grosse Pointe. In 2015 DPS received $225.7 million in federal funds while Grosse Pointe received $3.3 million, according to audited reports from both school districts.

Much of the federal funding comes from what are called Title I grants. Detroit received $109.6 million in these grants while Grosse Pointe received $521,000 during the 2014-15 year, the latest year data is available.

Yi Li, a spokesperson for EdBuild, said in an email that the organization focuses on state funding policy.

“We do not discuss these additional federal funds,” Li said.´ “Federal Title I dollars are intended to supplement, not supplant, state and local education funding. They therefore should not affect state policy regarding funding equity.”

Detroit had a median household income of $26,095 from 2010-14 and a poverty rate of 39.9 percent. Grosse Pointe’s median household income was $100,688 with a 3.1 percent poverty rate during the same time span.

The study stated: “In America today, school district funding is tied to the value of nearby homes. Families with means can buy their way into well-resourced school systems, and school district boundaries become the new tool of segregation in this country.”

But that’s not accurate in Michigan.

Largely due to the 1994 Proposal A ballot measure, differences between per pupil revenue in Michigan school districts are much smaller, according to Ben DeGrow, the director of education policy at the Mackinac Center for Public Policy.

Before Proposal A, Michigan school districts got most of their funding from local property taxes, making it easier for districts with high property values like Grosse Pointe to collect more school taxes. (One mill of property tax levied on a $300,000 Gross Pointe home brings in more revenue than one-mill levied on a $50,000 Detroit home.)

To meet this challenge, Proposal A created a complicated “foundation allowance” system that uses state dollars to increase funding for lower-spending districts. The measure incorporated an agreement to raise up all districts to a basic level without punishing the budgets of districts that collect more from local property taxes.

There were 52 such districts out of 556 in 1994, which were called “out of formula” districts: If the regular funding level formula had been applied to them their funding would have been driven down. Grosse Pointe was one of those districts, which explains why its foundation allowance is still higher than the ‘basic’ allowance and the one received by Detroit.

The state foundation allowance for Detroit was $7,434 per pupil in 2015-16 and $9,864 in Grosse Pointe Public Schools. But while the foundation allowance is the largest source of school funding, it is not the only source. For example, the state gave Detroit Public Schools an additional $23.5 million for programs dealing with at-risk” students; Grosse Pointe received no extra state funding for these programs.

And when federal money is included, Detroit received nearly $1,600 more per student than Gross Pointe schools in 2015-16.

“To make a meaningful case that more resources are the biggest need for school districts like Detroit, you need to start by counting all the current revenues,” DeGrow said. “Taking federal funds out leaves an incomplete picture."