School Choice and School Change

By Gary Sykes, David Arsen, and David Plank

The state of Michigan today constitutes a lively laboratory for study of the most prominent public school choice policies under way across the country. Over the past three years, we have been studying the impact of these policies in Michigan, and last fall, we issued an initial report on our findings. While new policies encouraging greater family choice of schooling vary greatly across the states, we believe that emerging lessons from Michigan are worth heeding.

Our bottom line? In Michigan so far, the new choice polices have produced a mix of beneficial and harmful developments. Choice creates winners and losers among communities, schools, families, and children. What matters decisively are the rules and administrative arrangements that govern choice. Public debate must concentrate on structuring the new market for schooling in ways that reap the advantages of choice while minimizing and mitigating the harms.

The story of school choice in Michigan began in 1994 with passage of Proposal A, a school finance reform. Under the old funding system, school districts obtained most of their operating revenue from local property taxes. The amounts they were able to raise depended mainly on local property wealth and millage rates and only secondarily on student enrollments. Operating revenues "belonged" to school districts. Under the new finance system, district operating revenues come directly from state appropriations. With a few exceptions, districts are prohibited from raising local operating funds. The amount of revenue a district receives now depends primarily on the...