Albeit a few days late, passage of the state education budget for the 2026-27 school year on Friday, July 3, allows educators and schools to focus on getting ready to help students succeed this fall.  

The education budget includes modest increases — $250 (up to $10,300) per student for the foundation allowance and 1% for community colleges and higher education (noting that the budget does not include House-proposed cuts to U-M Ann Arbor and MSU).  

NEW: MEA complete FY27 state education budget analysis, plus district-by-district impact estimates from the House and Senate fiscal agencies.

It also establishes a weighted funding system (SB 903) that will bring lasting impact to efforts to improve equity between districts by ensuring students with additional needs have funding to match – and that districts have flexibility to spend the money as needed to meet those needs. In addition, for next year, the budget includes a 20% increase for the weights for at-risk students and English language learners. 

It maintains funding for free school meals, extra transportation funding based on district geographic size, and funding for student teacher stipends & future educator scholarships.  

It also allocates:

•  $130m into declining enrollment determined through the greater of current enrollment or a three-year average.
•  $150m into continuing the 27(l) educator compensation increases (with a stipulation this year that the money not be subject to MPSERS contributions).
• An additional $73.8m into GSRP, $30m for new early learning partnerships, and $60m for before- and after-school programs.
• Adds $300m to post-secondary scholarship programs (like the Michigan Achievement Scholarship), $40m for dual enrollment costs, and $4m for CTE.
• Allocates $75m for implementing literacy professional learning (read more about the “science of reading” legislation here), including some funding for compensation for additional time beyond contractual hours; plus $50m for high-impact tutoring, $52.5m for literacy coaches, and $50m for literacy supports.
• Continues to make access to $300m in school safety/mental health funding contingent on schools waiving privilege for mass casualty events like school shootings, but splits the funds so that districts get the mental health funding about $75 per pupil) regardless of their choice on the waiver to get the safety funds (about $174 per pupil).

Of note, you may hear that the budget this year is LESS than last year, but that appears to be an accounting tactic being using to make that message “true.” The budget does not allocate all of Michigan’s federal funding but instead includes language that what Michigan gets will be allocated in full. That amounts to an additional nearly $2 billion, or a 2.38% increase for this fiscal year. 

Despite several positives, this education budget continues the disturbing trend of using additional School Aid Fund resources to pay for costs normally paid by the General Fund.  An additional $630 million was moved this budget year, more than half to cover the increased post-secondary scholarship increases.  

With many new leaders coming to Lansing next year, we look forward to working on reversing this trend and re-establishing that the SAF is meant for PreK-12 schools and students — and stopping efforts to pit PreK-12 and higher education institutions against each other for funding.

More detailed analysis of the 2026-27 state education is now available from MEA economist Tanner Delpier. District-by-district impact estimates are available from the House and Senate fiscal agencies.