Unintended Consequence of Centralized Public School Funding in Michigan Education‪.‬

1. Introduction In an effort to create greater equity among school districts, a number of states have shifted the responsibility for school funding from local school districts to the state. Although many researchers have found that centralizing funding for public schools has been successful in creating greater equity (Murray, Evans, and Schwab 1998: Moser and Rubenstein 2002), other researchers have pointed out that centralizing funding can lead to unintended consequences. For example, Fischel (1989, 1992) suggests that families in wealthier districts, which have a stronger demand for education, are no longer able to match their preference for education under a system of equalized funding. In some cases, this may drive parents to seek private school alternatives (Dowries and Schoeman 1998). (1) In other cases, families meet their preferences by making private contributions to public schools (Sonstelie and Brunner 1997). Furthermore, Theobald and Picus (1991) argue that centralizing funding forces education, as a state service, to compete with other state services for funds, and as a result, the growth rate of spending per pupil decreases over time. (2) These articles illustrate that policies designed to centralize control of public school funding can produce unintended consequences.