All 2017-2018 School Aid Budget Proposals Out on the Table

Aaron Keel

By Aaron Keel, MASB Assistant Director of Government Relations

DashBoard, March 29, 2017

Yesterday, the House Appropriations Subcommittee on School Aid released and reported their proposed School Aid Budget to the full House Appropriations Committee with all Republicans voting yes and all Democrats voting no. The Senate released and reported its version this morning with all Republicans voting for it while the lone Democrat on the committee abstained. While there are some bright spots in the budget, there is also cause for concern and many areas of disagreement between this budget and Gov. Rick Snyder’s recommendation, which was widely praised.

When it came to the Governor’s recommended budget, one of the biggest investments was in at-risk pupils. While the Governor recommended increasing this section by $150 million and greatly expanding the definition of eligible pupils, the House still makes a noteworthy investment in at-risk and recommends expanding the section by $129.1 million. The House also agreed with the executive recommendation change regarding eligible pupils, but caps the at-risk per-pupil allocation for newly eligible hold harmless and out-of-formula districts at 50% of their total before any proration.

The Senate also made a notable increase to at-risk by investing an additional $100 million. Further, they concurred with the expanded pupil eligibility changes, but used a different funding formula, placing an increased emphasis on English Language Learners and an additional $500,000 specifically for school-based health centers.

One of the biggest surprises in the budget came in the House recommendation to eliminate the 2x formula for the foundation allowance and instead give a $100 per pupil increase across the board. The Governor recommended a $50-$100 per pupil increase though the 2x formula.

The Senate concurred with using the 2x formula, but added an additional $100 million. The funds were shifted from Sec. 147a, the MPSERS cost offset used to pay down the unfunded liability debt. Under the Senate proposal, districts would see between an $88-$176 per-pupil increase.

Other notable changes from the Governor’s recommended budget include:

  • House and Senate recommend eliminating the $50 additional payment per pupil for high school students.
  • House and Senate recommend restoring cyberschool foundations to 100% of the minimum foundation allowance, instead of the recommended 80% after the school’s first year.
  • The Governor recommended an additional $3 million for early literacy coaches, bringing the total to $6 million. The Senate concurs with this recommendation. The House rolls up literacy coach funding into other funding for the implementation of the new third grade reading proficiency law, along with a $500,000 increase to be distributed to eligible districts in an amount equal to $245 for each first grade pupil. Districts would be allowed to use the funds for all of the currently funded activities including professional development, screening and diagnostic tools, early literacy coaches and additional instructional time.
  • House and Senate recommend eliminating the $7 million in additional support for declining enrollment districts that the Governor recommends.
  • House recommends maintaining current law as it relates to shared-time instruction. Senate recommends capping shared time FTEs at 0.75 per pupil.
  • House and Senate recommend eliminating $7 million for the evaluation training the Governor proposed. However, they do include money to develop a statewide value-added growth and projection analytics system to support educator and administrator evaluations.
  • House recommends eliminating $5 million for the State School Reform Office and $3 million for partnership model districts. Senate recommends setting this money aside to potentially be transferred in later in the year.

Notable additions in the legislative recommendations include:

  • Both the House and Senate again included the $2.5 million for reimbursements to nonpublic schools that we are currently suing the State and Gov. Snyder over. Additionally, the House adds $250,000 for competitive grants to nonpublic schools for FIRST Robotics and Science Olympiad programs.
  • The House adds legislative intent language to use a portion of at-risk funds to reimburse districts that provide transportation or transportation vouchers to students attending a district that is not their resident district or a public school academy.
  • The House adds a new penalty if a district or ISD decides to bring legal action against the state in an amount equal to the amount spent if the district uses SAF funds to pay for an expense relating to the legal action.
  • The House adds a new penalty of 5% of total state aid if a district or ISD enters into a collective bargaining agreement that does any of the following: establishes racial and religious preferences for employees; automatically deducts union dues from employee compensation; is in conflict with any state or federal laws regarding district transparency; or includes a method of compensation that does not comply with state law.

Both the House and the Senate also agreed with the Governor on lowering the MPSERS Assumed Rate of Return from 8% to 7.5%.

Committee Chairs Rep. Tim Kelly (R-Saginaw) and Sen. Geoff Hansen (R-Hart) reaffirmed in their respective committees that this is not the final document but the start of a process. It was specifically noted in the House that many of the items were included in this budget as a conversation starter.

We look forward to continuing the conversation on how we can improve this budget for all of the schools across Michigan. The budgets now go before their respective full appropriations committee for approval. We expect this action when the Legislature returns from its two-week spring recess on April 19.

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