Michigan Competitive Grant System Disadvantages Small Rural School Districts, Leaving Students Behind

Minnows Competing Against Sharks

Small rural Michigan schools say competitive state grants leave their students behind, because administrators do not have time to apply. Superintendents describe writing grant applications between recess duty, substitute teaching, and even snow removal.

Michigan offers more than 100 grants worth about $7 billion, and the paperwork can take days. Bigger districts have staff dedicated to the process. Small districts do not.

Michelle Wesner, superintendent at Posen Consolidated Schools, sits in her small office in Presque Isle County, a district with no traffic signal. On her computer screen is an application for an $80,000 state grant for a welding career tech program that her 200 kids desperately need. It is also a grant she frets she will not receive, like some others she has applied for in the past.

Many bigger districts across the state have an administrator or team of staffers who craft grant applications. But in many small districts in rural northern Michigan, school leaders squeeze such work between lunch supervision, substitute teaching, and in at least one district, running a front loader to remove snow from the parking lot.

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

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

Michigan's rural students, who have fewer opportunities than many of their peers in more populated school settings, are further disadvantaged by the state's reliance on competitive grants, say local and state education officials. School leaders say that means students in districts like Posen are less likely to have access to classes 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 is 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 the 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.

Winners and Losers

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 do not have time to complete the forms to compete for the $351 million, or 1.7 percent 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 does not track how small, rural schools fare with competitive grants compared to larger districts. Still, local and state school leaders who spoke to Bridge 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 percent 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 our 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,' she said. '(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.'

For example, last school year, 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 percent of its budget on transportation before kids get to class.

'This is not a big school district,' said Rudyard Superintendent David McAllister. 'We have very limited staff.'

System Criticized

A 2013 study by the Citizens Research Council found that Michigan's education funding system was fragmented and complex, with 50 categories of school funding compared to the national average of 10. The report recommended consolidation of categorical grants to reduce administrative burden and improve equity.

State officials acknowledge the problem. Michigan State Superintendent Glenn Maleyko has stated that the state is working to simplify the grant application process and provide better support for small rural districts.

'We understand the challenges that small districts face,' Maleyko said in a statement. 'We are committed to finding solutions that ensure every student, regardless of where they live, has access to quality education programs.'

The Michigan Department of Education has begun piloting a centralized grant application system that allows small districts to combine their applications and reduce paperwork. Early results are promising, with some districts reporting 30 percent reductions in grant application time.

What's at Stake

The competitive grant system is not just about money. It's about opportunities. A grant for a welding program means a student can learn a skilled trade and support a family. A grant for advanced placement courses means a student can earn college credit while still in high school.

For small rural districts, these opportunities are increasingly difficult to access because the system is designed for districts with staff dedicated to grant writing and application management.

'The current system punishes rural districts for being rural,' said Craig Thiel of Citizens Research Council. 'It's time to rethink how we allocate education funding in Michigan.'

As the state moves forward with budget planning for fiscal year 2027, the question of how to better support small rural school districts remains a critical issue. Education leaders, policymakers, and communities across Michigan are watching closely to see what changes will be made to ensure that students in small rural districts are not left behind in the race for funding.