The Impact Of Rising Employee Benefit Costs On Michigan School Districts

Author : Jesse Nagel
Publisher :
ISBN 13 :
Total Pages : 109 pages
Book Rating : 4.5/5 (381 download)

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Download or read book Special Education Finance in Michigan written by Jesse Nagel and published by . This book was released on 2021 with total page 109 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this dissertation, I seek to understand encroachment within school finance, wherein school districts must divert unrestricted, general education revenues to compensate for unfunded, mandated special education costs. I claim that encroachment in itself is not an issue 0́3 special education students should be funded, and it is fair for local school districts to contribute to that funding 0́3 but rather that inequities in encroachment lead to significant disparities in the financial burdens school districts face. As encroachment requires districts to divert dollars that would otherwise be spent on general education services, inequities in encroachment affect not only special education students, but general education students as well. Research on encroachment is limited, and this dissertation adds to the literature by (1) measuring encroachment within Michigan public school districts and describing trends over a seven-year time span; (2) tying policy and district characteristics to encroachment; (3) investigating funding approaches as potential encroachment equalizers; and (4) looking for trends in districts' expenditure responses to encroachment. To make the first contribution, I create a novel panel dataset which brings together federal, state, and newly gathered local special education revenues. I then run standard OLS regressions of the novel encroachment measure on a range of policy and district characteristics to identify potential predictors. To look at potential funding policy solutions, I simulate flows of special education revenues to local districts under varying assumptions and calculate a measure of equity for the resulting encroachment. Lastly, I identify and estimate a two-way fixed effects regression model to determine if there are systematic patterns in how districts reorganize expenditures to make up for unfunded, mandated special education costs. I show that encroachment has remained relatively constant at the state level over time, with statewide encroachment fluctuating around $700 million annually from 2013 to 2019. I note, however, that encroachment varies substantially between districts, with many districts having more than enough special education revenues to cover costs. Simultaneously, dozens of school districts must necessarily divert over $1,500 per general education student to compensate for insufficient special education revenues. Of note, Michigan's charter schools experience, on average, less than half of the encroachment faced by traditional public schools. The ability of an intermediate school district (ISD) to generate local revenues is significantly tied to the encroachment faced by its constituent local districts. I find that ISDs with higher allowable special education millage (tax) rates, higher willingness to pay those taxes, and higher property values on which to levy those taxes have lower levels of encroachment, on average. I also highlight notable differences between encroachment's contributing factors within traditional public schools and charter schools. I show that, in general, ISDs would improve equity in the encroachment faced by their constituent local districts by distributing their available revenues based on each local district's share of special education costs within the ISD. Lastly, I attempt to find systematic patterns in district's reorganization of expenditures when faced with encroachment. I find no such patterns, which suggests districts consider current budgeting needs when diverting resources to meet special education funding requirements. With this finding, along with the others, I develop a foundation on which state and local policymakers can draft equity-enhancing financial policy.