Center Study Compares Financial Data for Michigan’s Urban, Suburban, Town and Rural School Districts

Study analyzes revenue and operational spending for all Michigan school districts during seven-year period, ‘may call a few conventional notions into question,’ says study’s author

For Immediate Release
Tuesday, May 31, 2011
Contact: Michael Van Beek
Director of Education Policy
or
Michael Jahr
Vice President for Communications
Mackinac Center for Public Policy
989-631-0900

MIDLAND — A new report released today by the Mackinac Center for Public Policy compares the total revenues and operating expenditures of Michigan’s urban, suburban, town and rural school districts using federal statistics and locale codes. The study, written by Mackinac Center Director of Education Policy Michael Van Beek, reviews data from fiscal 2004, the first year for which consistent data are available, to fiscal 2010, the latest year for which data are available.

According to Van Beek, one impetus behind the work was to examine the common perception that certain types of districts have financial advantages over others. “Urban school districts, for example, are often viewed as facing unique challenges, especially in generating revenues for educational services,” Van Beek said. “But other districts, like rural districts, might face challenges, too. We sought to measure the differences between the amounts of money the districts received and the ways the districts spent it. Some of the findings may call a few conventional notions into question.”

Using categories established by the National Center for Education Statistics, the study divided per-pupil revenues into those obtained from local, state and federal sources, and it separated operating expenditures into 10 categories, including instruction, transportation and student support services. City and suburban school districts were further subdivided into large, midsize and small districts, while town and rural school districts were subdivided into fringe, distant and remote districts. Findings from the study include:

-   From fiscal 2004 to fiscal 2010, city districts on average received the highest revenues per pupil in each year, while town districts on average received the lowest in six of the seven years.

-   In each of the seven years, remote rural districts spent more per pupil on operating expenditures on average than districts in midsize and small suburbs on average.

-   Districts located in towns averaged the lowest spending per pupil of the four major locale groups in 2010: $9,569.

-   Of the 12 locale subgroups, the large city locale group, consisting only of the Detroit Public Schools, spent the most per pupil in fiscal 2010: $15,570.

-   In fiscal 2010, the town and rural locale groups each spent about 63 percent of their operating expenditures on instruction, while the suburban and city locale groups spent about 61 percent and 58 percent, respectively.

-   Average per-pupil spending on student support services in city districts approached nearly three times that of such spending on average in rural districts in fiscal 2010.

-   Forty percent of Michigan students attended schools in suburban districts — the largest enrollment for any major locale group in fiscal 2009.

Van Beek noted that the study is “purely descriptive,” saying that he did not attempt to explain the reasons for the differences between the district locales’ fiscal data or to determine the “proper” amount that districts should receive or spend based on their locale classification. “Such questions are complex and probably require studies of their own,” he observed. “This study, however, provides a necessary starting point for investigating those questions and the exact nature of the differences.”

The 71-page study, titled “Revenues and Spending of Michigan’s Urban, Suburban, Town and Rural School Districts: 2004-2010,” is available online at www.mackinac.org/15112. The study includes a list of the locale classifications for each of the 552 Michigan school districts that existed at some point during the period. Public charter schools were not part of the study.

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