Study Hall from School News Network
Join our rotating cast of journalists, school leaders, teachers and students to explore what's happening in school districts across Kent County, Michigan and beyond. We dive into the issues, challenges and changes related to public education today, and highlight the fabulous teachers and brilliant, creative students who make our schools such exciting places to learn.
Study Hall from School News Network
State and federal funding ‘mess’ complicates return to school for local districts
As schools reopen the week of Aug. 18, their leaders lack the answer to a crucial question: How much money will they have to teach students? Political gridlock in the state Legislature and proposed drastic downsizing of education spending by the Trump administration have left major chunks of state and federal funding in limbo. Dan Behm, executive director of Education Advocates of West Michigan, breaks down the reasons for the logjam — and what lawmakers and citizens can do about it.
For more great stories about the changes and challenges of school districts in West Michigan, check out our website, School News Network.org. And if you have ideas for future programs, feel free to send them to us at SNN@kentisd.org. Thanks for listening, and happy studying!
Hello everyone and welcome back to Study Hall from School News Network, your window into the public schools of Kent County, michigan. It's a new school year and I'm excited to dig into the many issues confronting our public schools and the many wonderful things that teachers and students are doing in our classrooms. Now school gets underway for many districts this week, that is August 18th. Teachers have their rooms arranged and lessons ready, the school buildings are nice and shiny, clean and open for business. Principals are ready to welcome students with high fives and cheery hallway messages.
Speaker 1:But there's one major piece missing in this year's return to school money, specifically state and federal funding that is either in limbo due to political gridlock or that has simply been cut in the drastic downsizing of education funding by the Trump administration. So there's three main sources of school funding local, state and federal. The local is operating millage bond issues, sinking funds. Voters control these and they are in place in our local districts. But even though school boards approved their budgets by July 1st, as required by law, they did so without knowing how much they would be receiving from those non-local sources. In fact, as of today, the state legislature has not even passed a budget, even though they, too, are required by law to do so by July 1st. State School Superintendent Michael Reitz this week called their impasse unacceptable.
Speaker 1:As for the federal government, it's no secret that President Trump has vowed to shut down the US Department of Education. His proposed budget for the coming fiscal year calls for major cuts to the department's budget and billions in cuts for K-12 programs such as services for migrant students. So what do all these funding uncertainties mean for the 20 local school districts in Kent, isd and the ISD's own programs just as they start their new school year, and what does their future look like when there are so many challenges to public education and partisan politics throws their traditional funding sources into doubt? Fortunately, I'm here today with someone who can help us untangle these complicated questions of dollars and cents. Dan Beam is Executive Director of Education Advocates of West Michigan, a collaborative of Kent, muskegon and Ottawa area intermediate school districts that works for full estate, funding and legislative policy reform. Dan's been in education for more than 30 years, 17 of those as superintendent of Forest Hills Public Schools. So welcome, dan, and thanks for being with us on Study Hall.
Speaker 2:Thank you, charlie, it's great to be here today.
Speaker 1:Well, it's great to have you here. I'm telling you, I'm trying to figure out this stuff and I'm really looking forward to your help on it. So I'm just going to call this the school funding mess. Is that okay with you?
Speaker 2:Sure, that's a good way to sum it up. How much of a mess is it? It's a pretty big mess, I I would say in the 30-plus years that we've had the current funding system in Michigan under Proposal A, this is probably in the top two or three in terms of messiness, I would say, and kind of really for not great reasons. Sometimes it makes sense that it's messy when we're in a huge recession and the state hasn't brought in the revenue that it typically does, but that's not the case this year, so that makes it a little bit more of a head-scratching sort of affair.
Speaker 1:Sure, now let's talk about the state of play, with what's happening in Lansing, washington around school funding. First, the state. What is the problem with getting a budget passed and what is the likelihood that they will get this done before, say, thanksgiving break?
Speaker 2:Yeah, you know. The problem, in a word, is politics the 2026 election. Even though it's more than a year away, it looms large in this budget battle. Right now, we've got divided government and the three entities that are responsible for putting the budget together the governor, the Senate and the House. That are responsible for putting the budget together the governor, the Senate and the House. The House is controlled by Republicans, speaker Matt Hall, and what the Speaker would like to do is, in the next election, have the Senate and the governor's office occupied by a majority of Republicans on that. So politically, that's what he's trying to do.
Speaker 2:It's not a mystery.
Speaker 2:It's not unusual in that regard, but what is unusual is sort of the tactics that are being used to paint one side as ineffective or incompetent in a political sense and really not get down to the basic annual governing duties of lawmakers.
Speaker 2:Lawmakers are political actors, but they also need to be about the business of governing, and governing is just the work that's set for them in the state constitution. And at this point in time, politics has still won the day and we haven't really gotten to the governing aspect of what lawmakers need to do. And I think schools are getting nervous because normally the governing work is done about the time schools are adopting their budgets in late June and we're ready for a new fiscal year for schools that begins July 1st. But we've got this weird situation We've had it for decades now in which both the state and the federal government fiscal year begins October 1st, so they kind of use the last minute deadline to get their homework done, sometimes in September. And, as you said in your intro, in Michigan we do have state laws that say the state legislature needs to get their budget done by July 1st and this year they just sort of blew past that deadline and there's really no enforcement mechanism when they violate that law.
Speaker 1:So it is a law, but they can't actually enforce it.
Speaker 2:Right, right, exactly. There's actually no penalty. There's no penalty whatsoever.
Speaker 1:But there is an end date on this right, by which they must pass the budget or the state shuts down.
Speaker 2:Yes, absolutely. They must pass the budget or the state shuts down. Yes, absolutely so. Right now we've got statutory authority in Michigan to operate all the elements of state government and spend taxpayer dollars that are collected to operate state government through September 30th. But after September 30th there's no statutory authority for the Department of Treasury to send out any of the taxpayer dollars that are still being collected. We're still collecting sales tax and people employers are sending in income tax withholdings every two weeks on pay dates and we're collecting property taxes and the like real estate transfer taxes. So all that money's coming in but there's no statutory authority to spend it beyond September 30th.
Speaker 1:So you mentioned the Republican House, republican-controlled House Speaker Matt Hall. The Senate is controlled by the Democrats Senate Majority Leader Winnie Brinks of Grand Rapids. It doesn't look like those two are talking very much.
Speaker 2:No, you know there were some signs early on in this budget cycle and it kind of is a cycle Even though the fiscal year begins October 1st, the budget cycle begins in January when nonpartisan economists come together to see how much money do we think the state will have in the new fiscal year. We call October 1st fiscal year 2026. We call October 1st fiscal year 2026. Even though it's October 1st of 2025, the majority of the next fiscal year will be in fiscal year 26. So they call it fiscal year 26. So fiscal year 26 budget preparation begins in January with estimating how much revenue do we think lawmakers will have to slice up in a budget pie and things like that. The governor comes out with her proposals and then that happens in February, and then usually in April or sometimes early May, the Senate and the House each come out with their own plans. So you have three different plans governors, house and Senate.
Speaker 2:And what was different this year was in March the House came out with what they called a shutdown budget, and we're like a shutdown budget. I mean a shutdown wouldn't happen until September. It's March. That seemed to be abnormal, to say the least, and so we had some signals then that maybe politically there was going to be a tactic to drive this all the way to the deadline and you sort of think, why would? What's the idea around getting it all the way to the deadline? And I don't know.
Speaker 2:The Speaker hasn't said, but it's been clear from his statements that he hasn't been real concerned about the July 1st deadline. He hasn't been real concerned about the norm of the House putting out all 17 budgets or 17 different department budgets that make up the state budget in total. He was not real interested in meeting the norm of putting that out in the spring, usually April or May, when that happens. And recently he said we're going to redo the budgets and that's something different as well redo their proposals in the House. And he said we're working on it, going through it with a fine-tooth comb. It appears to many people who've kind of watched and observed Lansing over the years that this has all been sort of a tactic to get it down to the deadline and we can only speculate. But the thought might be, when we're up against a deadline, might the parties agree to things that they wouldn't otherwise agree to? That's sort of the speculation on that part.
Speaker 1:So do I understand correctly that the House Republican House, democrat Senate have both passed different versions of the budget, at least as far as education is concerned?
Speaker 2:Yeah. So the 17 budgets, the Senate has passed all 17 of their proposals. Those proposals don't really mean anything unless the House were to adopt those. The House typically would pass their own proposals. They've only passed five, the five education-related proposals. So a budget proposal for higher education, community colleges, k-12 education, the Michigan Department of Education department budget and the new department called MyLeap, the Michigan Lifelong Learning. It's really early childhood type of things that come in there and things beyond K-12 education on that as well. So those five budgets, the House did pass those proposals, but now the Speaker has said timeout.
Speaker 2:Things have changed since they passed those in late June and the thing that has changed is we have a new federal landscape because they passed a portion, a big portion, of the federal budget in July. That's changed. How much money is going to be available in state budgets across the country, including Michigan's, on that as well? So the Speaker has said we want a do-over on our education budget from the House and he's also recommended to the other chamber, the Senate, that they should do a do-over on their budget as well.
Speaker 2:The Senate Majority Leader has said this isn't unusual.
Speaker 2:This is a dynamic process every year and what we know in April, when we put out a budget proposal, typically in one chamber or the other, is sometimes different when we get to May or June and we have to make adjustments. And we can do that as we sit down at a negotiating table, because what they're negotiating if you remember back to your civics classes is a conference bill. They're negotiating one bill that will be voted on by both chambers, the House and the Senate, as a conference report, which is sort of a consensus bill. And certainly that conference report can look different, entirely different, than the initial proposals from the House and the Senate. So I think the Senate majority leader is trying to say let's get to a table and get talking. We've got lots of work to do and the clock is ticking. And I think Matt Hall in the House he is saying let's take our time and let's each come up with new proposals on that. So you've got these differing ideas of where we should and how we should proceed.
Speaker 1:It seems a little late in the game to come up with new proposals but that's just me.
Speaker 2:No, you're right about that, charlie, I would agree with you?
Speaker 1:So, in terms of what's been approved so far by the different chambers, how far apart are they? On things like per-pupil funding, categoricals like mental health and so forth, are they way far apart?
Speaker 2:You know, that's the interesting thing, they aren't. When it comes to per-pupil funding, they're both talking about a foundation allowance the technical term we use for that per-pupil funding that districts receive just above $10,000 a student. I think the Senate's proposal is $10,008, and the House proposal is $10,025 a student, so it's not real far off at all. And that's really the main enchilada. When it comes to the K-12 education budget, that's the biggest price tag element of the K-12 budget is the foundational allowance. So they're very close on that. Element of the K-12 budget is the foundational allowance, so they're very close on that. You'd say gosh, it wouldn't be difficult to come to a consensus agreement on how much we want to provide school districts on a per-pupil basis.
Speaker 2:When it comes to a big category of funding in the K-12 budget, we call it the school aid budget. That's category 31AA. That stands for Section 31AA of the bill. When you look at a bill, there is actually a Section 31A, 31b, and so we're all the way down to Z and then we go to AA. That one is school safety, security and mental health. One is school safety, security and mental health. That's become a big kind of political dynamic and spotlight on that funding and both the House and the Senate want to spend a couple hundred to $300 million in that category, and that's pretty similar to what we have been seeing for the last several years for school districts in that category. So, again, not a huge point of difference on that either. So that's another area you'd think they could reach agreement fairly quickly.
Speaker 1:I wish I'd had you for economics in college, but it makes so much sense. So, yeah, they do not sound that much different. What is stopping them from just saying you know what school year is starting? We've got to pull this together. We can agree, certainly, per pupil funding. It's like $70 a difference. Can't you just push this forward? Maybe there's some outliers that we still need to settle on, or can't you do it that way?
Speaker 2:You could. The issue I think that is holding everything up is roads. Michigan does not have an annual long-term solution for fixing and repairing and maintaining all of the roads that we have in our state. As gas tax revenue is bringing in less and less money, cars are becoming more fuel efficient. We're not buying as many gallons of gas. There's electric cars that buy zero gallons.
Speaker 2:The gas tax has been our main way of funding roads and I think politicians on both sides of the aisle, everyone looking at this issue, has said we need to come up with a new system. And so Matt Hall has said hey, I can come up with a system to create a fund to repair roads into the future without raising any taxes. And the Senate has said show us how you do that. Because if you're going to take existing state tax dollars and sort of think of that as one big pie and you're going to create a slice for road maintenance that we never have really had of that size before, someone else's slice is going to get smaller, and can you show us whose slice that is? We'd like to know and so we can decide does that make sense or not? Are you going to take a micro slice from a bunch of different categories. What has that been? And to date Matt Hall has not shown the rest of his budgets to show how he comes up with $3 billion. The speculation is how he's doing that is by moving some things that are paid for out of the state's general fund. So right now we pay just shy of $2 billion in state support to our public universities in Michigan, and if you don't use the general fund to pay for that but instead use the school aid fund to pay for colleges and universities, that frees up a couple billion dollars in the general fund. The problem is, is it saddles the school aid fund with a couple billion dollars in the general fund? The problem is, is it saddles the school aid fund with a couple billion dollars of new costs? It's kind of like if your neighbor came to you and said, hey, pay my cable bill for me, it frees up money for them and it saddles you with an additional financial burden. So I think the Senate has said no, we don't want to do that.
Speaker 2:The Proposal A in 1994 was a deal for voters to come up with a new way of funding K-12 schools Instead of funding it based on really high local property taxes that were different all over the state. Let's have money flow to Lansing and Lansing decide a fair and equitable amount for each pupil in the state. Thus the foundational allowance. And that was the system for K-12 schools. We didn't use the school aid fund to fund community colleges and universities from the inception of our state constitution in 1963, all the way up to 2009. 2009 was the first year state lawmakers dipped into the school aid fund to bail out community college funding and ever since then it's kind of grown incrementally over time.
Speaker 2:But the House proposal would really tip the scale. They would more than double the amount of funding that we're using the school aid fund to help colleges and universities. School aid fund to help colleges and universities. They would go from about. Right now we spend about $800 million of the school aid fund on colleges and universities and under the House proposal it would be around $2.5 billion from the school aid fund would go to colleges and universities. Yeah, exactly. And so the Senate is saying no. Essentially what you're doing, the Senate argument is, is you're paving roads on the backs of dollars that the voters intended to fund K-12 schools.
Speaker 1:So it's really the road issue that's the crux of the problem. It's not so much the school funding per se, because the road funding would affect the school funding Right exactly.
Speaker 2:I had a lawmaker say to me look, the school aid fund is the land of milk and honey. It's got all sorts of money and we want to be able to tap into that for other parts of the budget that are under strain. And another part of the budget that's under strain is the general fund. The general fund is the state's kind of discretionary checking account. The vast majority of the state budget is restricted. I mean, the biggest part of the state budget is a Medicaid program. You can't take Medicaid dollars and rejigger those to pave roads or you can't take Medicaid dollars to pay for public university funding. Medicaid dollars are restricted for Medicaid programs on that.
Speaker 2:So the vast majority of the state budget is that way, with the exception of the general fund. And the general fund is about $15 billion. So if you're going to carve $3 billion 20% of the general fund out for roads, something else in the general fund has got to give. And the thing that the House is looking at is hey, let's move funding for universities out of the general fund and push it into the school aid fund. The Senate is saying, hey, the school aid fund is for K-12 schools, it's not for universities that can raise tuition and other things, and that's what Proposal A said.
Speaker 1:it was Absolutely.
Speaker 2:Absolutely. Proposal A was a thing supported by both Republicans and Democrats in the 1993-1994 timeframe and they said to voters this is a way to fund K-12 schools. Al Gore was a vice president, was the vice president during the 90s then at that time and he talked about Social Security being a lockbox. We're going to put a lockbox on Social Security. State lawmakers took that same concept of a lockbox and said Proposal A is a lockbox for K-12 education funding.
Speaker 2:And we in the school community who've been paying attention to these kind of where the dollars and cents are going, even in 2009, we said wait a minute, you're violating the spirit of Proposal A when you're taking a couple hundred million dollars. And that year Governor Granholm said it was the year right after the Great Recession in 2008, and said look, we don't have enough revenue in the general fund. We need to borrow some money from the school aid fund and we will pay it back. And sure enough, in 2010, they did pay it back back. And sure enough, in 2010, they did pay it back. But then Governor Snyder was elected in late 2010. And in 2011, things were still difficult and he doubled down and didn't borrow, but just simply moved those costs for paying for community colleges and about 20% of the state's support of universities moved those costs into the school aid fund.
Speaker 1:So they opened the lockbox and they haven't shut it since.
Speaker 2:They have not shut it since. In fact, charlie, to date, since 2011, $9,900,000,000 has been diverted from the school aid fund to non-K-12 purposes. Wow, almost $10 billion. Had we not done that, we'd have another $6,600 per student.
Speaker 1:Oh my gosh, yeah, Wow. So this gridlock at the state level. What does this mean for the local districts going into the new school year? Is this already affecting what they can pay for or how they do business?
Speaker 2:Yes, it does. Sadly, Even though schools don't get their first revenue payment until after the state's fiscal year begins, october 1st, schools don't get their first revenue payment until October 20th, even in a normal budget year. That's always been the case. But the issue is schools don't know are we going to get that payment on October 20th? What if the budget doesn't get done until after October 20th? Or what if it gets done on October 6th? Is there enough time for Treasury and all those people to figure out how much money goes to each district and on the per-pupil basis and counting the pupils? And there's a lot of administrivia to be done in a short window of time where normally the state has months to figure all that out. And then there's issues of what parts of the budget are going to be funded. As I mentioned, the foundation allowance is the biggest dollar component of the school aid budget. But there's all these different sections and we make up a Scrabble word called a categorical a category of the budget, and there's over a hundred different categorical payments that districts have received in the past and there's uncertainty around will we receive that in the future? So there's a categorical payment for early literacy support Kids that are maybe behind on their developmental milestones of learning how to read. Districts have some additional money to hire a reading tutor for groups of students to help them catch up or meet that milestone. We know that intervening at that point is the most effective time to do it and it costs the least amount of money to catch a six-year-old or a seven-year-old that might be behind on a few of their milestones to catch them up. That's the most cost-effective time and the best academically effective time to do that.
Speaker 2:But if that categorical funding isn't there, the person who's been doing that for the last four years, who's now developed, let's say, some great tactics and techniques in working with groups of students they don't know am I going to have a job, school year is starting and that reading aid may be looking around and saying I don't know.
Speaker 2:I asked my supervisor, my principal, not sure if those dollars are there. So that uncertainty creates an issue where staff members start to look around and say maybe I should look for a job that's a little bit more permanent. The second thing it does is there are some contracts that schools have that say if a funding source for a particular position that an employee holds is up in the air or uncertain, the school district is required to notify them that they may not have a job in the future kind of a pink slip thing. That's not in every contract but many contracts have that. So if you're the employee that gets a pink slip that's your employer officially telling you we can't guarantee you a job Again, that employee may go and look in a different industry, a different district, someplace else for something more permanent. So now you've added uncertainty on the staffing part and it's with adults working with kids that education actually gets done. And when you're uncertain on the adults, you have to work with kids, and school is beginning this week.
Speaker 1:That puts a lot of trepidation into the system and I noticed that at least one district Oklahoma's public schools has said we're going to have to charge kids for lunch and breakfast because we don't know if that fund's going to come through Exactly. Until now the state's been covering those free meals for all kids, right.
Speaker 2:Right, that's another portion of the budget. That's a couple hundred million dollars in the budget and we have no idea will that funding be there or not going forward?
Speaker 1:Now, speaking of you know you mentioned the pink slips. Am I going to have a job or not? So from the federal level, I noticed that there's some doubt being thrown into local budgets. For instance, grand Rapids Public Schools engaged with their teachers union right now and they're saying, well, we don't know how much money we're going to get for, you know, funds withheld by the US Department of Education, which Trump administration says they're going to do major cuts to and their goal is to just shut it down. Talk about the state of play with the federal budget and how that affects local districts.
Speaker 2:The federal budget has been assembled this year in two parts. The first part was done and signed into law July 4th. The second part. That first part is kind of about mandatory spending, social Security, medicaid, medicare.
Speaker 1:Is that the big beautiful bill?
Speaker 2:That's the big beautiful bill act. Yeah, it was done through what they call a reconciliation process. The second part is the more typical budget. It's the discretionary part of the budget and it's the part of the budget that really pertains to K-12 funding. It has funding for special education from the federal government. It has funding for what we call Title I, additional services for students that are economically disadvantaged.
Speaker 2:Funding for career and technical education, a really popular type of program. Funding for Head Start, an early childhood type of program. Funding for a portion of teacher training, professional development funding for students who are learning how to speak English because it's not their native language that's Title III funding. Are learning how to speak English because it's not their native language that's Title III funding. So these are all really important elements of financial support for school districts, especially school districts that have varying amounts of these special populations. If you're a district that has a higher percentage of students learning to speak English, these are really important dollars. If you're a school district that has a high percentage of students with special needs, these are critically important dollars.
Speaker 1:And does that include things like services for migrant students? Yes, it does. We have a lot of those around here.
Speaker 2:Yes, exactly so. You have students that are part of families that move around with the agricultural cycle in the country and work in various different farms and agricultural fields. As those students move, there's unique needs that arise for their education. So the federal government has had a support, a financial support system, for children of migrant families for decades, and that's funding that is up in the air now, given the federal budget proposal.
Speaker 1:Have there been funds already taken away from districts for the coming school year?
Speaker 2:Yeah, we're talking about the 25-26 school year, which some people call fiscal year 26. So because the federal fiscal year starts October 1st, the funding that was agreed to by the federal government last year that was kind of held back for a few weeks this summer.
Speaker 1:Oh, they froze it for a few weeks.
Speaker 2:They froze it which again created just more uncertainty. And then some states sued on that and before the lawsuit could even have a hearing, the federal Trump administration unfroze those dollars, and so they flowed. But those are only dollars that go through September 30th.
Speaker 1:Okay, okay, but all those dollars are back supposedly they are back now. So when you talk about Trump's vow to shut down the Department of Education we've talked about that before on Study Hall how likely do you think that is and if it did happen, how big of an impact would it have on our districts?
Speaker 2:Well, I think it would have the biggest impact on families.
Speaker 2:Quite frankly, local districts don't have a regular interaction with the United States Department of Education.
Speaker 2:We do more with the Michigan Department of Education, but the United States Department of Education is a clearinghouse for a variety of federal laws.
Speaker 2:Students with disabilities the Individual Disabilities Education Act is a really big one. It enforces non-discrimination laws at the federal government and it is a place for parents or families to go for resources if they feel like their child has been subject to discrimination or there's something with a student with disabilities that maybe a school district isn't doing. The federal government and the US Department of Education is a resource for them on that. They also funnel these dollars that go to school districts. They really go to states and then the states distribute them through their state budget process to school districts. But just as I've talked about for students with disabilities, students learning English, students of migrant families and so forth on that. So it's critical in that regard. I think it would be extremely inefficient to sort of eliminate, blow up that clearinghouse and have all these different functions scattered to different places of the federal government that know nothing about educating students with disabilities or the research behind early childhood education or whatever it may be on that.
Speaker 1:So is there anything that public school advocates like you and others in local districts can or are doing, at least at the state level, to try to get these people to put a budget together for you and help these districts, you know, at the state level to try to get these people to put a budget together for you? And help these districts.
Speaker 2:You know at the state level. I think that's exactly it. There's plenty of money there in the school aid fund and in fact that's part of the problem, because they want to use that money for other things. And I think the best thing parents can do is to contact their lawmaker and say use the money in the school aid fund to support K-12 schools, don't use it to pave roads, and get the budget done. This is something that, again, all the voters came together in 1994. Republicans and Democrats urged voters to support Proposal A. They said here's our pledge to you. Let's just stick with that pledge.
Speaker 1:So parents go ahead and contact your legislature, Absolutely and that makes a big difference.
Speaker 2:I think sometimes parents don't think that makes a difference. But calling your state lawmaker, your state representative, your state senator on these type of things, they do listen. These are folks who you can find in your grocery store and come to local school, district board meetings and the like. They will listen to what parents are saying.
Speaker 1:That is good to know. And parents out there listening take heed it's zero hour for school funding right now. Anything else, dan that you wanted to touch on today stand that you wanted to touch on today.
Speaker 2:You know, the most important thing is that students, you know, have an opportunity to start a school year off strong and to be able to learn and grow and discover all their undiscovered potential. And that's what makes educators tick, that's what they love to do, and I think that's what our state, our citizenry, want to have happen and support our schools in that way. And so let's try to keep politics out of the funding of schools and focus on the needs of kids.
Speaker 1:Good message to take to heart. Well, dan, thanks a lot. It's been great talking with you. It certainly helped me understand the state of things, and thanks to our listeners for coming to study hall today. It's been a pleasure, as always, and I look forward to joining you again soon on the School of News Network webpage or wherever you get your podcasts. So see you next time and don't forget your pencils, thank you.
