An Education Finance Q&A
EPIC Answers the Most Pressing Education Finance Questions
June 2026
The debate over Michigan’s education budget for the 2027 fiscal year has included proposals to restructure how the state distributes some K–12 education funding to districts. Both Governor Whitmer’s executive budget recommendation and the Senate-passed education budget would move Michigan toward a weighted student funding model that ties districts’ funding more directly to their enrollment and student characteristics. Supporters of this approach argue that it would make school funding more predictable, more stable, and less complex to administer. To support informed discussion of this issue, the following FAQs provide a basic introduction to how weighted student funding works, how it differs from Michigan’s current approach, and how other states use it.
Weighted Student Funding FAQ
How does weighted student funding (WSF) provide money to districts?
Weighted student funding (WSF) is a per-pupil funding approach that provides additional funding based on differences across districts that affect the cost of educating students and running schools. Under this model, districts are allocated a basic level of funding for all students and automatically receive additional resources based on their specific needs. Often, these additional revenues are based on student characteristics such as their number of English learners (ELs), students with disabilities (SWDs), or economically disadvantaged (ED) students. These groups of students require greater support to achieve a given outcome relative to students who are not members of these groups. District may also receive additional funding due to aspects of their context that make it more expensive to provide an education generally. For example, a weighted funding model may include additional funding for rural districts due to the increased costs of providing transportation to and from school in rural settings. In short, WSF ensures that districts receive a consistent base level of funding and that districts with greater need receive additional revenues.
To show how WSF can work in practice, take the following hypothetical scenario that outlines how WSF could be implemented for ELs:
- A state allocates a common, baseline per-pupil dollar allocation of $10,000 per student to all districts
- To support ELs, the state provides an additional weight (or ‘multiplier’) onto the per-pupil allocation for such students. For the purposes of this example, the weight will be 0.25x the base allowance
- 0.25 x $10,000 provides an additional $2,500 per EL student
- In total, a district will receive $10,000 for each enrolled student and an additional $2,500 for each EL student (that is, $10,000 for each general education student and $12,5000 for each EL).
How does WSF differ from Michigan’s current funding approach and the use of categorical dollars?
Michigan’s current K-12 funding system, established under Proposal A in 1994, relies on the state to collect and distribute most of the resources districts receive for their day-to-day operations. Michigan’s state-driven funding model distributes a standard, per-pupil base level of funding to all districts according to their enrollment with additional dollars allocated through separate appropriations called categorical grants. Categorical dollars often carry requirements and limitations on their use, pushing districts to spend those funds for specific purposes. Examples include providing services for students with disabilities, transportation, career and technical education (CTE), and student safety. As of 2025, Michigan had more than 100 different categorical grants (Citizens Research Council of Michigan, 2025).
Categorical grants are set in each year’s state education budget. Whether a specific grant is funded, and at what level, can vary from year to year, which makes it harder for school districts to forecast budgets from one year to the next. For example, in the case of English learners, the amount of EL funding a district receives depends on 1) the total categorical funding appropriated by the state for ELs in a given year, 2) the number of ELs the district enrolls, and 3) the number of ELs across the state Under this framework, if total funding for ELs increases and a district enrolls more ELs than in the past, it is possible for their total EL funding to decrease if statewide EL enrollment increases. See Burns & Guzman (2025) for additional examples of variability in categorical funding.
Burns, J., & Guzman, M. (2025). Funding Michigan’s Future: Three Decades of School Finance and the Policy Questions Ahead. Education Policy Innovation Collaborative (EPIC), Michigan State University. https://epicedpolicy.org/funding-michigans-future-k-12-finance-report/
Citizens Research Council of Michigan. (2025, January 30). Growth of state-directed grant funding erodes local schools’ flexibility to respond to student needs [Blog]. Citizens Research Council of Michigan. https://crcmich.org/growth-of-state-directed-grant-funding-erodes-local-schools-flexibility-to-respond-to-student-needs
Does WSF provide districts with more money?
WSF is a mechanism for distributing funding to districts. Michigan districts would not automatically receive higher revenues if the state adopted WSF because Michigan already directs additional funding to districts serving higher-need students through categorical grants. However, under WSF, districts that serve higher-need student bodies would automatically receive more funding compared to districts with fewer students from higher-needs groups.
The total amount of funding districts receive would depend on a combination of:
- the value of the foundation allowance, the base level of per-pupil funding,
- which types of students and/or districts receive additional funding through weights,
- the level at which weights are set, and
- funding the state may choose to continue appropriating through categorical grants.
How does WSF impact budget predictability and forecasting?
WSF would make funding more predictable and stable for districts by allocating funding to districts based on their student enrollment. This means that a district can more straightforwardly predict its revenues based on the number and characteristics of its students (see response to question #2 above for an example of how enrollment patterns outside a district can impact its own revenues). Additionally, a common feature of WSF is that weights generally remain stable over time, allowing districts to better forecast revenues into the future and more safely commit to longer-term investments. As an example of how this differs from Michigan’s current system, from 2001 to 2014 the state’s population of economically disadvantaged students grew at a much faster rate than the categorical funding for that student group, which resulted in funding per economically disadvantaged pupil falling by 50%, adjusted for inflation (Burns & Guzman, 2025). If Michigan’s K-12 funding system included a weight for students who are economically disadvantaged, schools would have received a consistent level of funding for each economically disadvantaged student regardless of how many economically disadvantaged students were in the state.
Burns, J., & Guzman, M. (2025). Funding Michigan’s Future: Three Decades of School Finance and the Policy Questions Ahead. Education Policy Innovation Collaborative (EPIC), Michigan State University. https://epicedpolicy.org/funding-michigans-future-k-12-finance-report/
Which states use WSF?
As of 2024, a total of 35 states and Washington, D.C. use a weighted student funding system to allocate at least a portion of education funding (Fischer & Doncombe, 2024). Which student and district characteristics receive weights, the size of weights, and additional categorical funding varies across states, as does the overall investment in education budgets. Additionally, some states give districts significant latitude over how districts use their funds while others have prescriptions on how dollars can be spent or what kinds of resources must be purchased and in what quantity.
Fischer, A. & Duncombe, C. (2024). 50-State Comparison: K-12 Funding. Education Commission of the States. https://www.ecs.org/50-state-comparison-k-12-funding-2024/
