School Aid Budget Set for Final Passage

Jennifer Smith

By Jennifer Smith, MASB Director of Government Relations

DashBoard, June 21, 2017

The Conference Committee on the Education Omnibus Budget (which includes the School Aid, Community Colleges and Universities budgets) approved its final budget proposal in House Bill 4313 on Tuesday by a vote of 4-0 with the two Democrats not voting. It was then passed by the full House later that afternoon by a vote of 72-35. The Senate is expected to vote on Thursday. No changes can be made to the conference report on the House and Senate floors, it is a straight yes or no vote.

We have updated our comparison document to reflect the changes and a detailed analysis is also available from the House Fiscal Agency.

The budget includes a per-pupil increase of $60-120 to be distributed through the 2x formula. This increases the minimum foundation allowance to $7,631 and the state maximum guaranteed foundation allowance to $8,289. 

The budget also includes a sizable increase to at-risk funding with $120 million added to the line item. It expands the definition of at-risk from "free and reduced lunch" to "economically disadvantaged" and allows all districts, including the hold-harmless and out-of-formula districts, to receive funds. Currently, eligible districts will receive approximately $777 per eligible pupil and newly eligible districts will receive an estimated $233 per eligible pupil.

Finally, of major note, is the funding for MPSERS. The budget includes $48.9 million to reimburse districts for the costs associated with lowering the assumed rate of return by 0.5%. It also includes a one-time $200 million payment to MPSERS to reduce the unfunded liabilities. Finally, it sets aside $55 million in the newly created MPSERS Retirement Obligation Reform Reserve Fund to cover the increased normal costs of the new hybrid system and the larger employer contribution to the defined contribution plan as set out in the bills passed last week, SB 401 and HB 4647. Of that $55 million, $23.1 million is appropriated for this year's costs. The House approved SB 401 on Tuesday and the Senate is expected to send it to the Governor later this week.

We will have more information on other sections of the budget in Friday's News From the Capitol. In the meantime, if you have any questions please contact us.

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