The school aid budget passed by the House last week offers a different approach to funding Michigan’s public schools. Unlike the budgets proposed by the Senate and Gov. Gretchen Whitmer, it would give school leaders a greater say in how to spend increases in state funding.

One key part of the House’s K-12 budget bill is that it does away with several categorical grants, or funding that’s restricted to specific purposes or programs. For example, the House budget would eliminate grants for no-fee school meals, student transportation and teacher recruitment programs.

The state superintendent has expressed concern about removing these line items. But the House budget still contains ample funding for these and other programs. It’s simply structured as per-pupil funding, not categorical funding. This change gives local school officials more flexibility in how they choose to use their district’s revenue.

If the House budget proposal were adopted, all but three districts would benefit from a net gain in funding. That’s according to the 2025-26 District Impact Statement prepared by the nonpartisan House Fiscal Agency. The three districts that would not receive more funding would, however, get as much as they did this year. In contrast, the Senate’s plan would result in 26 districts getting less money than they have this year.

The Detroit Public Schools Community District, the state’s largest district, would gain $76 million if the House budget were adopted, $63 million more than under the Senate plan. Utica, the second largest district, would collect an extra $39 million with the House’s version but only $24 million under the Senate’s version.

The House budget allocates $100 million more in overall state funding than the Senate budget. It also restructures the way funds are distributed. The House budget rolled up the funds from the categorical grants it eliminated to generate an extra per-pupil payment of $1,975 for each district — with no strings attached. In total, the budget would send to districts $12,000 for each student, which they could use at their discretion.

Districts would face a noteworthy obligation under the House budget. They would need to use a portion of the extra funds to hire a school resource officer and a mental health professional, if they don’t already have those. But they would have the authority to decide how to allocate the remaining funds to meet the needs of their students, teachers and staff.

With increased per-pupil funding, districts could choose to spend their extra dollars on things that meet their unique set of needs. These might include literacy instruction, teacher recruitment and training, school meals, career and technical education, transportation and so on.

When state lawmakers tie funding for these types of services to categorical grants, they give the impression that districts would otherwise fail to provide them for their students. But local school officials, who interact with their school communities daily, understand what their students and teachers need.

Under the Senate budget, a district could apply for state infrastructure grants and get money from the state to cover some of the construction costs for projects listed in a problematic state report. Or under the House budget, the district could just fund whatever construction project it wanted to with the extra money it gets from the state. It could also spend the funds on literacy tutors, better school supplies or whatever its highest priorities were.

The House school aid budget would loosen the strings so local districts could exercise greater control over their spending. Doing so would let them fund the programs and services their school community needs the most.

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