Michigan’s current budget expires on Sept. 30, and lawmakers are working to come to an agreement to avoid a shutdown. Each year, the governor, state House and state Senate all propose their budgets for Michigan. K-12 education is the largest area of spending, so lawmakers usually negotiate funding for K-12 schools and then for everything else.

This year, Gov. Gretchen Whitmer proposed spending $21.2 billion on schools, the Democratic-led Senate proposed $21.8 billion and the Republican-led House proposed $21.9 billion. All of these are up significantly from the current budget of $20.77 billion (even as the number of students has declined). Lawmakers have long been at an impasse, however.

What is the controversy? It is primarily in how to distribute the funds.

The bulk of the money schools get is a lump sum they can spend with almost complete discretion. This called the “foundation allowance.” But the state government also directs how schools spend a significant portion of the money they get. It comes in funds known as “categorical grants.” Michigan relies on categorical funding more than most states.

For instance, the current state budget requires schools to spend money on reading tutors, breakfast and lunch for all students, pushing students to fill out college FAFSA forms, services for certain at-risk students, special education, community violence grants, counselors, etc. The state has 128 areas of categorical spending. All this is separate from money coming in from the federal government, which largely flows to special education and programs for low-income students.

The Senate budget proposal keeps almost all categorical spending and its requirements. But the House budget rolls much of this money into a single bucket and gives it to the schools themselves as part of the foundation allowance.

Media outlets report that “free” lunches might disappear under the House budget, but this is only a partial truth. No-fee lunches would stay for low-income and lower-middle-class students, since funding for them comes from the federal government. But the House budget no longer requires schools to pay for lunches for wealthier students — though they are free to do so if they wish. Some districts have already said they will spend the increased funding on no-fee meals for all.

Every budget proposal on the table increases funding for schools. They differ in the amount of flexibility they give to schools in spending their increased funding. Some local parents and taxpayers may want their district to spend the money on lunches for upper-class and upper-middle-class students rather than, say, hiring more reading tutors or paying teachers more. If that’s their desire, they should advocate that view to their local school board and superintendent.

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