In 2023, Michigan increased funding for school districts with large concentrations of students from families with low incomes. For the 2024–25 school year, the governor has proposed $90 million in additional funding for districts based on the depth of poverty students face. The current proposal includes two main components: districts would be required to apply for discretionary funding through the Michigan Department of Education (MDE), and districts would be required to spend the funds on students from families with the lowest incomes. Though this is a substantial investment, there are drawbacks to how the funds would be allocated and limitations related to identifying low-income students.
With a discretionary approach, the MDE could target these funds where the department believes they are most needed, and the department can evaluate each district’s proposal and implementation capacity. But the grant process imposes administrative and planning burdens on districts, which can delay funding. These delays will make it harder for some districts to plan new interventions for their students from families with the lowest incomes. Additionally, a discretionary process will also mean the funds reach fewer students. If the MDE allocates the funds to fewer districts, it can provide more funding per pupil to those districts, but some income-eligible students would be left in districts without any additional funding. One way to resolve this trade-off is to use a targeted—instead of universal—formula-based allocation. Because students from families with the lowest incomes are disproportionately concentrated in higher-poverty districts, policymakers could provide an automatic amount of per pupil funding to higher-poverty districts only. Targeting higher-poverty districts would help ensure that, even if the number of receiving districts is smaller, the funds are still provided for a large share of income-eligible students overall.
Additionally, data updates would be necessary to appropriately target funding to lower-income students. Districts do not have adequate data to identify students from families with the lowest incomes, but the state can update its educational data system so districts have the necessary information at a student or school level. These changes could help maximize the impact of additional funding while limiting the burden on districts.
