Is Michigan’s school-funding plan a crime-fighting plan?


SCHOOLCRAFT, MI – AUGUST 30: Students return for the first day of the school year at Schoolcraft Elementary on August 30, 2021 in Schoolcraft, Michigan. The Schoolcraft Community School district, like many school districts throughout the country are adapting to mask mandates for teachers and students due to the current surge of Covid-19 cases. (Photo by Matthew Hatcher/Getty Images)

(NewsNation) — Does this education equation add up?

Start with one of America’s most daring (and bipartisan) overhauls of school funding. Multiply its use by 30 years. Now, add in the fact schools use the money the right way — by, say, hiring better teachers — and communities add money to build better school buildings.

Does it all equal lower crime?

That’s the premise of a new study about Michigan’s mid-’90s overhaul of school funding. Although the study is what’s called a “working paper” — meaning that it’s in a stage where it hasn’t been peer-reviewed yet — it provides initial evidence that the school funding reform had a big impact.

It didn’t just help poorer districts get better funding. A trio of researchers found evidence that the cascade effect of the plan could create a road map to cut crime rates over time.

More police on the street “reduces crime now,” said Joshua M. Hyman, an assistant professor of economics at Amherst College and one of the co-authors of the study. But a good school funding approach, he said, “reduces crime 20 years from now.”

It’s unlikely that reducing crime was on the mind of lawmakers who enacted the reforms. In the summer of 1993, a Democratic Michigan state senator named Debbie Stabenow — who today serves in the U.S. Senate — proposed an amendment that her rivals widely perceived as a political stunt: eliminate property taxes as the source of school funding. (Stabenow’s office did not respond to a request for comment.)

Her audacious proposal was designed to force action on a pair of problems frustrating lawmakers on both sides: high property taxes and inequitable school funding.

Like much of America, Michigan largely relied on local property taxes to fund school systems. This meant that lower-income districts lagged far behind higher-income districts in school funding. The reliance on local property taxes also made reforming this system politically difficult because high-spending districts resisted efforts to lower property taxes.

“What (Democrats) didn’t expect was that we’d say, ‘Hey let’s go ahead and pass it,’” said John Engler, a Republican who served as the state’s governor from 1991 to 2003. His party supported the amendment and he signed it into law in 1993.

The change would have eliminated almost two-thirds of the statewide school budget. It forced lawmakers to rush to address the revenue shortfall before the law took effect one-and-a-half years later. Democratic lawmakers preferred to lean on income taxes to fill the funding gap while Republicans wanted to use a sales tax increase.

Ultimately, the legislature sent the question to the voters with the Republican-backed Proposal A, a constitutional amendment designed to, among other things, raise the sales and use tax rates in order to fund schools in a more equitable way. When the question hit the ballot, 69% of voters backed it.

The New York Times called Michigan’s decision “the nation’s most dramatic shift in a century in the way public schools are financed.”

After it went into force, Michigan’s new school financing plan boosted funding for the state’s poorest school districts, helping narrow the gap between rich and poor districts; meanwhile, Michiganders saw a reduction in property taxes.

Crime reduction: An added benefit

Decades later and as communities around the country are seeking solutions to a surge in crime, Hyman and his fellow researchers discovered a hidden benefit of Michigan’s education funding switch: less crime.

The working paper, published at the National Bureau of Economic Research, found that spending more money on school staff and school infrastructure reduced the likelihood young students attending those schools would be arrested as adults.

After the passage of Proposal A, some schools — especially those in low-income neighborhoods — had more money at their disposal for operating expenditures such as boosting teacher salaries or hiring more administrators. This created a natural experiment for examining the impact of those changes.

Additionally, the researchers looked at districts where proposals to spend new money on improving the physical infrastructure of schools (by raising local taxes), known as capital bonds, either narrowly passed or failed.

What they found is a 10% increase in operating expenditures led to a 15% reduction in the likelihood that a child in kindergarten through third grade would get arrested as an adult.

Meanwhile, kids who were kindergartners when their school district narrowly won a capital election, allowing for physical improvements to be made to school infrastructure, were 20% less likely to be arrested as an adult.

“We see big reductions in adult arrests among those students who were exposed to more money, whether it’s more operating expenditures…or whether it’s more money on capital spending,” Hyman said.

Indeed, Michigan saw a significant reduction in crime starting in the early 1990s.

According to FBI data, Michigan’s violent crime rate fell from approximately 792 per 100,000 residents in 1993 to 478 per 100,000 residents by 2020.

However, much of the country saw a decrease in violent crime starting in the 1990s. Why that happened is hotly debated; there were likely many factors involved.

Also, Michigan’s violent crime rate — like much of the country’s — has increased in the past two years. The state’s violent crime rate is also higher than the national average, which sat at approximately 399 per 100,000 in 2020.

No one reform can solve a community’s social problems. The paper suggests that education reform in Michigan may be a component in the state’s crime decline.

Hyman and his team suggested that one of the main reasons both additional capital and operating expenditures led to fewer adult arrests was by reducing absenteeism.

“We saw that effects on absences seem to be … really key,” he said, noting that improving the quality of schools appears to have a big impact on increasing attendance rates.

The researchers find that the increased educational spending pays for itself by generating savings related to less criminal activity — fewer people committing crimes and getting incarcerated saves society a lot of money.

They also find that additional school funding is about as cost-effective as additional police spending.  

Using education spending to lower crime does come with its own constraints. Unlike short-term interventions such as increasing police staffing and patrols, educational investments take years to produce results.

Meanwhile, some education specialists have argued that additional school funding alone won’t solve every problem Michigan’s schools have. Ben DeGrow, who serves as the director of education policy at the right-leaning Mackinac Center for Public Policy, applauded Proposal A’s impact on equity in school funding but also offered words of caution.

“The benefits diminish over time as you get higher and higher,” he noted, pointing to research he conducted in 2016 showing that there isn’t always a strong relationship between additional spending and better academic outcomes.

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