Contents of this issue:
  • Michigan per-pupil expenditure ranks 16th in nation

  • Education Department eases testing rules for learning-disabled

  • Bay Mills announces it will open fewer charters than expected

  • Detroit school officials to investigate financial allegations

  • Interview with EMU professor covers Michigan education budget

  • Gov. Granholm proposes interest-free loans to build small schools

  • ANNOUNCEMENT: Free summer economics seminar for teachers

LANSING, Mich. — Data from the U.S. Census Bureau show that Michigan fell from 12th to 16th in total per-pupil education expenditures among the 50 states and the District of Columbia, according to Booth Newspapers.

The figures covered the 2002-2003 school year, which is the latest period for which the numbers have been reported. Michigan's ranking peaked in 1997-1998 at 6th place, then dropped to 11th and 12th place in 1999-2000 and 2000-2001, respectively. "This is a very big change, and all of the change is in one direction," said David Plank, co-director of the Education Policy Center at Michigan State University. "We're not bouncing around. We're falling pretty much like a rock. That's something that should get people's attention."

According to Booth, the list is topped by east-coast states including New Jersey, New York and Connecticut as well as Washington, D.C. The 2002-2003 data for Michigan reflects a $69 cut in per-pupil funding by the state down to $9,955 and could have been affected by the recession of 2001, according to Plank. But Jim Sandy, executive director of the Michigan Business Leaders for Education Excellence, said, "I don't think this is a scandalous drop. Ten thousand a kid is still a pretty good amount."

Booth Newspapers, "Other states surpass Michigan in school funding," Apr. 7, 2005

Mackinac Center for Public Policy, "School Funding: Lack of Money or Lack of Money Management?" August 2001

Mackinac Center for Public Policy, "The Six Habits of Fiscally Responsible Public School Districts," December 2002

Mackinac Center for Public Policy, "Michigan's Budget Challenge"

DETROIT — New rules concerning learning-disabled students were announced last week by the U.S. Department of Education, which will allow states to modify standards for those students and help some schools meet "Adequate Yearly Progress" under the No Child Left Behind Act.

Secretary of Education Margaret Spellings said her department would recognize the fact that students must be treated differently from one another. "This new approach recognizes that these children should not all be treated alike," said Spellings. "By relying on the most current and accurate information on how children learn and how to best serve their academic needs, this new policy focuses on children."

According to The Detroit News, Michigan officials had already asked the Department of Education for concessions in AYP enforcement in other areas. The new rules would allow more students classified as disabled to take "modified assessments," according to a U.S. Department of Education press release. "No Child Left Behind is a work in progress," Martin Ackley, spokesman for the Michigan Department of Education told The News. "The U.S. Department of Education recognizes this, too."

Detroit News, "Rules ease No Child testing plan," Apr. 8, 2005

U.S. Department of Education, "Secretary Spellings Announces More Workable, "Common Sense" Approach To Implement No Child Left Behind Law," Apr. 7, 2005

Mackinac Center for Public Policy, "No Cop-Out Left Behind," March 2005

Michigan Education Report, "President signs 'No Child Left Behind Act,'" Winter 2002

Michigan Education Report, "No Child Left Behind law demands 'adequate yearly progress' and offers school choice options for parents," Fall 2002

LANSING, Mich. — Though both the Detroit Public Schools and the Detroit Archdiocese have announced the closing of dozens of schools this summer, Bay Mills Community College said it would open only a few charters, despite the college being exempt from the statewide cap on charter schools, reported Booth Newspapers.

Bay Mills' exemption from the cap is being challenged in a lawsuit brought against the state by the Michigan Education Association, which has argued that the college should not be allowed to open new charters anywhere in the state except near its campus in Brimley. The exemption was determined to be legal in a 2001 opinion issued by then-Attorney General Jennifer Granholm.

Bay Mills Charter School Office Director Patrick Shannon said his department is already busy with its current roster of 28 schools. "In light of what we did last year, three or four schools is a lot of schools for any authorizer," said Shannon. "This is contrary to the fear some people had that we were going to be a charter mill. We didn't even have an application process this year. We're working with those schools that were approved."

Booth Newspapers, "Expected charter school explosion reduced to a fizzle," Apr. 8, 2005

Mackinac Center for Public Policy, "When Will Conventional Public Schools Be As Accountable as Charters?" July 2004

Mackinac Center for Public Policy, "Time to Stop Beating Up on Charter Schools," November 2002

Mackinac Center for Public Policy, "The Impact of Limited School Choice on Public School Districts," July 2000

DETROIT — In response to an auditor's 10-page e-mail containing allegations of misconduct in the Detroit Public Schools, district officials announced on Friday their intention to investigate the allegations, reported the Detroit Free Press.

The e-mail was written in June by a school district auditor one week after being laid off from the district, according to the Free Press. The writer accused Title I office head James Humphries of hiring friends and family to perform jobs for which they were not qualified; allegations of high fees paid to consulting firms and temporary workers for unnecessary work were also made. The Title I office handles federal grants totaling $139 million annually; those funds are used for programs targeted at low-income children.

"It's important to note that this is just a set of allegations at this point," explained district spokesman Ken Coleman, though state and district auditors have "repeatedly raised questions about how the district spends and monitors its Title I funds," according to the Free Press. In addition to the latest allegations, the Free Press reported that at least two anonymous letters concerning misappropriation of the district's Title I funds have been forwarded to the state for investigation.

Detroit Free Press, "Schools' auditor says cash misspent," Apr. 9, 2005

Mackinac Center for Public Policy, "Government Encouragement," February 2005

Mackinac Center for Public Policy, "The $200 Million Question," January 2005

Mackinac Center for Public Policy, "Ironic Choices," November 2004

Mackinac Center for Public Policy, "Playing Monopoly With Detroit's Kids," July 2004

ANN ARBOR, Mich. — In an interview with the Ann Arbor News, Eastern Michigan University Professor Bill Price answered questions concerning an expected increase in per-pupil funding, legislation that could alter Proposal "A," and rising overhead costs in districts.

According to Price, Gov. Jennifer Granholm has proposed a $175 increase in the state per-pupil grant to districts, as well as an additional $50 earmarked for each high school student to help schools implement standards and curriculum reforms. Some legislators might want the $50 increase to be part of the total $175 amount, said Price. Price expects the schools to receive the $175 if state revenue results are positive.

Many districts are faced with rising overhead costs, including health care and pension costs. Districts have little control over such costs, and are "often locked into collective bargaining agreements that can be costly," said Price. Price also outlined legislative proposals to change parts of Proposal "A" by increasing caps on local and state millages or tying education funding increases to inflation.

Ann Arbor News, "Chances good for increase in school funding," Apr. 10, 2005

Mackinac Center for Public Policy, "School Budgets: A Crisis of Management, Not Finance," February 2005

Mackinac Center for Public Policy, "School Funding: Lack of Money or Lack of Money Management?" August 2001

Mackinac Center for Public Policy, "Michigan's Budget Challenge," February 2005

DETROIT — Gov. Jennifer Granholm announced her intention to push for districts with high dropout rates or poor academic results to be eligible for interest-free loans to build small high schools with student populations under 500, according to the Detroit Free Press.

The loan pool, which would total $180 million, would be available to 27 qualifying districts in the state to create high schools that would be reflective of the student populations at existing schools. "Many districts know they have to make changes at the high school level," said Granholm deputy chief of staff, Chuck Wilbur. "The thing that's missing for some kids is that reinforcement at an adult level that creates a value system that helps them achieve."

If approved, districts smaller than 20,000 students would be able to borrow up to $15 million, and districts larger than 20,000 could borrow up to $30 million. Repayment would be deferred for five years without interest. "Small schools can be very powerful," said Mike Schmidt, contributions director for education at the Ford Motor Co. Fund, which works with the Henry Ford Academy in Dearborn. "In these giant high schools, kids can get lost. Here, there are a lot more adults per kid. The teachers all know the kids."

Detroit Free Press, "Granholm has plan to offer interest-free money to build small schools," Apr. 11, 2005

Mackinac Center for Public Policy, "The Six Habits of Fiscally Responsible Public School Districts," December 2002

The Foundation for Teaching Economics is sponsoring a free summer seminar, "The Gillette Company Economics for Leaders Program," July 17-23, 2005, in Hillsdale, Michigan. The seminar is open to any teacher who teaches economics; it is especially suited for teachers of social studies, civics and history. Dr. Gary Wolfram, Munson Professor of Political Economy at Hillsdale College is the lead faculty member. The program is based on the National Voluntary Standards in Economic Education.

Each participant who completes the program will receive a $150.00 stipend. Free room and board is provided on the campus of Hillsdale College. All curriculum materials and lesson plans are free of charge. Reasonably priced credit hours are available, and three SB-CEUs are available free of charge to Michigan public school teachers.

For more information and to register, go to the Foundation for Teaching Economics at, or call (800) 383-4335.

MICHIGAN EDUCATION DIGEST is a service of Michigan Education Report (, a quarterly newspaper with a circulation of 130,000 published by the Mackinac Center for Public Policy (, a private, nonprofit, nonpartisan research and educational institute.

Contact Managing Editor Neil Block at

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