New State Education Budget Brings Major Funding Changes

Michigan’s fiscal year 2027 education budget, signed back in July by Gov. Whitmer, makes major changes to school funding while investing in literacy, free school meals, early childhood education and teacher support.

Local education leaders say two changes, a weighted funding formula and a new way to calculate enrollment, could help districts better meet student needs.

The budget moves Michigan to a weighted per-pupil funding model, a change long supported by Dan Behm, executive director of Education Advocates of West Michigan. The formula sends more money to students with greater needs, including English learners and economically disadvantaged students, who will be funded at 20 percent above the base amount.

The budget also raises base per-pupil funding by 2.5 percent, or $250 per student, bringing the total to $10,300 per pupil.

Because the new formula is more direct, districts will have more flexibility than they had under restricted at-risk funding streams such as Section 31a. Behm said that means support staff, such as social workers, can be assigned where they are needed most rather than limited to specific groups of students.

New Flexibility for Districts

In Kent City Community Schools, Superintendent Bill Crane said the funding change is allowing the district to restructure sixth grade with a team-teaching model. The plan includes four teachers, two of them newly hired, who will work together to identify students needing extra help in areas such as math and English.

“We’re going to be able to have this true team-teaching approach,” Crane told the School News Network. “There’s no way that we could have done that if 31a funds were still as restrictive as they were.”

Crane said the model will help students during the transition to middle school and give the district more flexibility to support at-risk students.

Enrollment Change Adds Predictability

The budget also allows districts to use a three-year average student count to determine state aid. Previously, funding was based on 90 percent of the current fall count and 10 percent of the previous spring count.

Behm said districts can now use either the current year’s count or the three-year average, whichever provides more state aid. The change is expected to help districts plan as they face enrollment shifts tied to declining birth rates, housing costs and other factors.

“Previously, districts were more reacting to those realities in the best way they could, which oftentimes for staff members and families and students felt like a last-minute surprise,” Behm said.

The three-year average will create more stable and predictable funding, which Crane says matters in smaller districts like Kent City, where even a 10-student swing can have a significant financial impact.

Literacy a Top Priority

The budget also includes $502 million for literacy through Whitmer’s Every Child Reads plan. Funding will support literacy curriculum, teacher training, before- and after-school programs, literacy coaches and tutoring.

Of that amount, $123.1 million is set aside to train teachers in the science of reading, including $75 million for reading teachers to complete Language Essentials for Teachers of Reading and Spelling, or LETRS. The training focuses on evidence-based reading instruction, including phonics.

New legislation signed with the budget requires elementary teachers to complete intensive science of reading training. According to the state, nearly 7,200 educators have completed LETRS training, and more than 5,700 are enrolled.

The FY27 budget also continues free breakfast and lunch for all 1.4 million Michigan public school students, provides $150 million for educator bonuses, supports mental health and school safety grants, expands free pre-K and invests in college and career pathways.