An Opportunity to Improve School Funding Equity?

A resolution pushing back on proposed new federal guidelines for education funding received broad bipartisan support this week in Lansing. Where a top-down mandate meets resistance, local initiative could pick up slack to address the underlying issue.

MLive reports that State Superintendent Brian Whiston testified Tuesday before the Senate Education Committee against a regulation introduced by the U.S. Department of Education to implement the new Every Student Succeeds Act, or ESSA. The regulation would require local districts to demonstrate that low-income schools are funded at least on par with their wealthier peers before federal Title I dollars are released.

In other words, districts should be using designated federal funds for high-poverty schools to “supplement” state and local dollars, rather than to “supplant” or backfill their budgets.

Resolution sponsor Sen. Phil Pavlov says schools don’t need another federal mandate, a view that deserves sympathy. Michigan Association of School Administrators executive director Chris Wigent suggested the proposed rule is a solution in search of a problem. But it’s not clear that districts generally direct dollars to their schools in an equitable manner.

School districts with more low-income students already are rewarded with substantial federal dollars, resulting in greater total funding for them compared to schools in nearby wealthier neighborhoods. For example, in 2014-15, Detroit Public Schools and Ann Arbor Schools received about the same amount of combined local and state funding per student. But add in Detroit’s $5,125 versus Ann Arbor’s $300 in federal revenue per student, and the comparison greatly changes.

Under Proposal A, Michigan has established a broadly equitable funding floor at the district level. How dollars filter down from the central office to local schools can be much harder to see, though. Most school-based funding is tied to district programs and staffing formulas, with funding at each school largely determined by employee seniority rather than student need.

Consider the Detroit Community School District, where the Title I federal funding proposal would have direct impact. How much resource equity exists between Fisher Lower Magnet Academy near Gratiot and 8 Mile, where 99 percent of kids are low-income, and the University District’s Bates Academy, with half the student poverty rate?

An increasing number of school districts nationwide have been moving toward systems that distribute significant shares of funding to schools based on student characteristics. Such systems are referred to as “student-based budgeting,” “weighted student funding” or “backpack funding,” because the money (figuratively) goes with the child’s backpack to the place where he or she is served.

The benefits of the practice include more transparent allocation of dollars and more flexibility for principals to prioritize financial decisions that directly impact their student body. And though no decisive impact on learning has been found, the Reason Foundation observes that greater student-based budgeting allocations are highly associated with closing academic achievement gaps between students of different races and socioeconomic groups.

The challenge of pursuing this strategy comes in training principals and other staff, and in upgrading financial systems and tools. But since many larger urban districts have gone down this path, the learning curve for a willing Michigan district would not have to be so great.

The proposed federal mandate has caused many state officials and interest groups to recoil, perhaps for good reason. The strings that come along with D.C. dollars and noble intentions can undercut effective local solutions.

Yet a district like Detroit, in dire straits and looking for a fresh start, ultimately would benefit from empowering local school decisions and from distributing dollars in a fairer, more transparent manner. The question is whether the lift would be too heavy for local leaders to accomplish.