Michigan policymakers and advocates are calling on the state to adopt a new school funding formula that provides additional funding to students with greater educational need, such as students with greater economic need. Michigan currently provides additional funds for the approximately 50 percent of students who are “economically disadvantaged.” But Michigan continues to lag behind other states in adequate funding for K–12 education in general, especially for low-income students. Despite recent increases in the state’s education budget, an adequacy study from the School Finance Research Collaborative (SFRC) suggests that Michigan still underfunds its students. One problem with definitions like “economic disadvantage” is that they present poverty as a binary category—either students are low income or they are not. To adequately fund low-income students, however, policymakers need to determine how Michigan should define economic need.
This analysis looks at data using the SFRC recommendation that Michigan adopt a 35 percent funding weight for economically disadvantaged students and an additional 15 percent funding weight for high-need, low-income students.
- A larger number of students in higher-poverty districts live below the federal poverty level, so including the high-need weight is necessary to ensure that districts with the most disadvantaged students are adequately and equitably funded to meet those students’ needs.
- Measures of individual student poverty or deep poverty would be an appropriate way to identify high-need, low-income students.
- A concentration-of-disadvantage measure is an alternative to a student poverty measure but would result in a substantially different distribution of high-need funds across districts.
For Michigan students who have been identified as economically disadvantaged, at least a 35 percent weight is necessary for schools and districts to support those students’ academic progress and material and social-emotional well-being. But some of these low-income students face greater economic need, and districts with the highest concentrations of economic disadvantage serve many more students in poverty and deep poverty and a fully funded high-need weight is necessary to ensure adequate funding for these students.
In addition to a new high-need measure, the state could use existing indicators that clearly signal greater economic need. For example, students identified as being homeless, being a migrant, living in foster care, or being in a family receiving Temporary Assistance for Needy Families benefits could be automatically identified as high need.
Adequate and equitable funding is important but is not a complete solution. These funds will help districts build capacity and support their most economically disadvantaged students, but the inequalities these funds seek to address will still exist. As policymakers consider subsequent steps, they should address other school funding issues (e.g., transportation and facilities) and promote cross-sector and coordinated efforts to address the broader inequalities that affect child development and create greater challenges for schools.