Michigan's School Funding System Leaves Rural Districts Behind as Administrators Write Grants Between Teaching Duties

Rural Schools Fight to Compete for Grants in Categorical Funding System

LANSING — In a small office in Presque Isle County, Superintendent Michelle Wesner sits at her desk looking worried. On her computer screen is an application for an $80,000 state grant for a welding career tech program that she knows her 200 students at Posen Consolidated Schools desperately need. It's also a grant she frets she won't receive, like others she's applied for in the past.

"It kills me that I have to do these between zipping coats and recess duty," Wesner said.

Wesner's situation illustrates a growing problem facing Michigan's education system. Small rural school districts across the state say they're being left behind by the state's reliance on competitive grants — a funding model that demands administrators spend countless hours writing applications while juggling multiple jobs that often don't include grant writing.

Minnows Against Sharks

In Posen, situated among pine forests in the northeast Lower Peninsula, some grants simply don't get completed because Wesner doesn't have the time. Others only get her attention late at night after basketball games or before the sun rises across nearby potato fields.

Michigan's rural students, who have fewer opportunities than many of their peers in more populated settings, are further disadvantaged by the state's grant-heavy system, say local and state education officials. School leaders say that means students in districts like Posen are less likely to have access to classes ranging from welding and computer programming to advanced placement courses for college credit.

In the 2024-25 school year, there were 102 state grants totaling about $7 billion available to districts. That's an average of almost three per school week for grants that, for some, can take days to complete.

And while complaints about those applications led to a lessening of grants this year, superintendents, state officials and policymakers agree the system continues to harm small school districts.

"They're minnows competing against sharks," said Craig Thiel, research director at Citizens Research Council, which published a report last year criticizing the reliance on some grants.

The Staffing Imbalance

The problem isn't just time — it's capacity. Even before the state's huge increase in funding buckets, a 2013 study found that Michigan had 50 categories of school funding — five times the national average.

Many categorical grants are meant to reduce disparities by directing money to underserved populations, such as schools that enroll more low-income or English as a second language students. There are also categorical spending funds that specifically funnel money to small districts, such as dollars for transportation costs in rural areas.

But in practice, small districts often don't have time to complete the forms to compete for the $351 million (1.7% of total state funding) in state competitive grants available this year, and a portion of the $1.1 billion in formula grants for which payouts are determined by a formula established by the Legislature.

"There's growing agreement that the budget is too categorical (grant) heavy," said Vanessa Keesler, former deputy superintendent at the Michigan Department of Education and now president of education advocacy group Launch Michigan.

The Michigan Department of Education doesn't track how small, rural schools fare with competitive grants compared to larger districts. Still, local and state school leaders who spoke to Bridge Michigan were unanimous in their belief that small districts — with enrollments of less than 1,000 — likely get less than their share.

About 87,000 students attend those schools, about 6% of all public school students but almost a third of Michigan's traditional public districts (170 of 539).

In those schools, administrators often do multiple jobs. Katy Xenakis-Makowski, superintendent of Johannesburg-Lewiston Area Schools, which straddles remote sections of Otsego, Montmorency and Oscoda counties, does the 600-student district's communications and social media, as well as serving as its chief financial officer and grant writer.

The school has career tech education programs in construction, business and accounting, and is in the same competition as Posen for career tech funds, hoping to offer culinary arts and computer programming.

It was 5:30 p.m. on the deadline day of Feb. 27 before Xenakis-Makowski hit send on her application.

"In this office, it's (the school secretary), our finance director who is on vacation, and me," Xenakis-Makowski told Bridge on a recent visit.

To illustrate the imbalance in staff capacity, Xenakis-Makowski points to new State Superintendent Glenn Maleyko's former school district, the 20,000-student Dearborn City School District, which has more administrators (111) than Johannesburg-Lewiston has total employees (107), according to the National Center for Education Statistics.

"We try to insulate our students as much as we can, … (but) we have left money on the table just because we couldn't make it happen in the timeframe or do the data collection that was required."

Real-World Consequences

The impact extends far beyond administrative frustrations. In Johannesburg-Lewiston, the district had been approved for a $2,500 grant for a literacy camp, but the paperwork to get the funds transferred was too cumbersome for the time Xenakis-Makowski could devote.

"It just wasn't worth it," she said, shaking her head.

Across the Mackinac Bridge in Chippewa County, 600-student Rudyard Area Schools faces similar hurdles. With 600 students spread across 402 square miles, the district spends 11% of its budget on transportation before kids get to class, compared to a statewide average of between 3% and 4%.

On the day Bridge visited, Superintendent Tom McKee was up at 3 a.m. to drive roads to see if they are safe for school. When school started, he filled in for a paraprofessional who was absent, and after school, he planned to run a front-loader to clear snow off the school parking lot for a girls' basketball game that evening.

It's rare when grants make it to the top of his to-do list. Recently, he had to jettison a plan to apply for a $20,000 library grant because the paperwork "might have taken me three weeks."

"A lot of times, when those grants come out, it's a balance of how much money I might get and how much of my time I need to commit," McKee said.

Rudyard is luckier than many other small rural schools like Posen and Johannesburg-Lewiston, because it receives $690,000 from an Eastern Upper Peninsula Intermediate School District millage for career tech. The impact of that tax is evident in Rudyard's sprawling CTE corridor, with five different programs operating daily.

There is a furniture and cabinetry room with an assortment of tools and a 3D printer that was buzzing with activity from more than a dozen students on a day Bridge visited. In a nearby room, a student was tinkering with a robotic arm, and an underwater drone was ready for testing with a new gyroscope.

Even with the millage, Rudyard is in the running for MDE's career tech grant, with McKee saying he'd like to add cosmetology and middle school agriculture.

A System That Picks Winners and Losers

The Michigan Department of Education doesn't track how small, rural schools fare with competitive grants compared to larger districts. Still, the pattern is clear: administrators in small districts are spending hours on grant applications while their students miss out on educational opportunities that larger districts can afford to pursue.

Some education officials urge funding formulas instead of competitions. The current system essentially forces school leaders to choose between their students' education and chasing grants that could benefit those same students.

As the state considers its budget priorities for the coming years, the question remains: Will policymakers address the structural issues that keep rural districts from accessing the funding they need? Or will small schools continue to struggle, writing grant applications between recess duty, substitute teaching, and even snow removal?

For now, the answer seems to be yes — they will keep writing those applications, hoping to secure the resources that could transform their schools and open doors for students who otherwise wouldn't have access to critical career and educational opportunities.

The system may be broken, but for now, rural superintendents keep showing up, keeping their students safe and learning, and applying for grants that could make all the difference in their communities' educational futures.