Foundation allowance is the per-pupil funding used for most school operations in Michigan districts. The Foundation Allowance report provides the per-student amounts for districts across several years.
Prior to Proposal A of 1994, local property taxes were the primary revenue source for schools and did not always meet district needs. School reform measures in Proposal A changed the methods and sources of school funding by using a combination of local property taxes and State of Michigan financial support.
The foundation allowance amount is established by the State of Michigan. The amount can change each year and may vary by district. See the Special Reports section on the House Fiscal Agency School Aid page for foundation allowance history and how it is calculated.
Districts contribute part of the foundation allowance amount, and the state pays the remainder.
See the Recently Posted Reports page for when the report was last updated.
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The State of Michigan determines increases or decreases to the per-pupil foundation allowance each year. Several methods for calculating changes have been used since 1994. The per-pupil allowance can change annually and might not be the same for all districts.
Currently, the pupil blend count, also known as the State Aid Membership, is used to determine the total foundation allowance for a school district. Generally, the pupil blend count is calculated based on 90% of the student full-time equivalence in the current year’s October count plus 10% of the FTE from the prior year’s February count. Different proportional weights have been applied over time.
Example: A school district with a foundation allowance of $9,000 per student and a pupil blend count of 1,000 would be assigned a total foundation allowance of $9,000,000 ($9,000 x 1,000) for the year.
All districts except public school academies (charter school districts) levy a state-assigned minimum number of mills on the local non-homestead property and use the collected tax to fund part of the foundation allowance. Generally, non-homesteads are business properties, rental housing, vacation homes and commercial agriculture. The state pays the remaining portion of the foundation allowance. Public school academies do not levy local property taxes, so the state funds their full foundation allowances.
Example: When a district with a total foundation allowance of $9 million raises $4 million in non-homestead taxes, the state would pay $5 million ($9M - $4M local = $5M state).
The state and local contributions toward the foundation allowance differ for districts and change annually, mostly due to the type of taxable property in the current tax roll. A residential (homestead) area having few business properties will generate lower local tax revenue for schools than a highly industrialized district or one having many vacation homes (non-homestead).
Districts receiving enough local tax revenue to cover the full foundation allowance amount do not get any state funds toward their foundation allowance and may keep any local revenue that exceeds the allowance.
See the Special Reports section on the House Fiscal Agency School Aid page for foundation allowance history and how it is calculated.
The State School Aid Updates from the Michigan Department of Education provide monthly news on school funding.
If you have questions not addressed here or in the linked resources, please contact CEPI customer support at cepi@michigan.gov.
See the Glossary for additional terms and acronyms used on MI School Data.
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