FY 2017-18 SCHOOL AID BUDGET S.B. 149 (S-1): SENATE-PASSED
Senate Bill 149 (S-1 as passed by the Senate)
Committee: Appropriations
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$14,161,842,100 |
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1. Foundation Allowance. Governor increased the foundation allowance between $50 and $100 per pupil, using the "2x" formula, which cost $128.0 million. In addition, Senate used $100.0 million from Sec. 147a (MPSERS cost offset) to increase by another $38-$76 per pupil, for total per-pupil increases ranging between $88 and $176. |
228,000,000 |
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2. At Risk. Governor increased $150.0 million and included all districts in funding and broadened eligibility to include reduced lunch, in addition to free lunch, and homeless and migrant students. Senate increased by $100.0 million, concurred in pupil eligibility changes, used a different funding formula, and increased school-based health centers $500,000. |
100,500,000 |
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3. MPSERS UAAL Rate Cap Increase Due to Lower Assumed Rate of Return (AROR). Governor and Senate increased the MPSERS unfunded actuarial accrued liabilities rate cap costs by $90.9 million above what the costs otherwise would have been, due to lowering the AROR on investments in the school retirement system, from 8.0% to 7.5% over two years. |
90,884,000 |
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4. MPSERS Normal Cost Increase Due to Lower AROR. Governor and Senate used one-time revenue to hold schools harmless from the increase in normal costs due to the proposal to lower the AROR on investments in the school retirement system over two years. |
48,969,000 |
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5. Program Increases. Senate increased categorical offset funding by $1.4 million, intermediate school district operations $1.0 million, bus driver safety $400,000, adult education pilot projects $2.5 million, advanced placement testing fee support for low-income students $750,000, FIRST robotics $250,000 to include nonpublic schools, $500,000 to reimburse ISDs for monitoring special education at PSAs, and math and science centers $549,300 to fill a Federal funds reduction. |
7,349,300 |
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6. New Programs. Governor proposed a declining enrollment categorical ($7.0 million), funding for educator evaluations ($7.0 million), school drinking water testing ($4.5 million, formerly in the MDE budget), and high school per-pupil payments ($22.0 million). Senate did not include these items. Instead, the Senate funded the following new programs: information technology certifications ($2.3 million), and civics education ($60,000). |
2,360,000 |
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7. CTE Equipment Upgrades. Governor increased funding for equipment upgrades in career and technical education programs by $16.8 million, to $20.0 million total. Senate increased by $4.3 million, to $7.5 million total, distributed to career education planning districts. |
4,300,000 |
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8. Partnership Model Districts and School Reform Office/District Supplemental Funding under CEOs. Governor maintained $5.0 million funding for the SRO and supplemental funding to districts with schools under the oversight of a CEO. Governor also proposed a new $3.0 million program to assist districts identified to partner with other organizations to coordinate resources and improve student achievement. Eligible districts would include those with a building earning an "F" grade in the accountability system and meeting other eligibility criteria. Senate funded both specific categoricals at $100, and set the $8.0 million aside in a new section to be transferred into either of those categoricals during the year. |
3,000,200 |
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9. Intermediate District Early Literacy Coaches. Governor and Senate doubled the funding for early literacy coaches at intermediate districts due to higher-than-anticipated costs. |
3,000,000 |
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10. Technology Regional Data Hubs. Governor proposed $2.2 million for a new program to integrate local data systems based on common standards, to provide for actionable use of data by districts and intermediate districts through common reports and dashboards and for efficiently providing information for reporting. Senate funded at $1.1 million. |
1,100,000 |
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11. Comprehensive Science, Technology, Engineering, and Math (STEM) Grants. Governor increased funding for competitive STEM grants from $1.0 million to $3.0 million. Senate increased by $950,700. |
950,700 |
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12. Cybersecurity Competitions. Governor and Senate proposed a new program for grants to expand opportunities to improve computer science skills by participating in events hosted by Merit Network or the Air Force, with funding for coaches and registration and travel fees. |
500,000 |
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13. Integrated Behavior and Learning Support (MiBLSi). Governor and Senate increased this from $1,125,000 to $1,600,000 to continue implementing task for recommendations. |
475,000 |
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14. Center for Educational Performance and Information (CEPI) and Michigan Virtual University. Governor increased GF/GP funding for CEPI to backfill Federal funds that had been supporting the Center via a work project, and which have now been expended. Senate increased by $1.0 million. Governor maintained MVU's funding at $7,387,500; Senate reduced by $887,500 to $6.5 million. |
112,500 |
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15. Year-Round Schools/Balanced Calendar. Governor proposed doubling the funding for year-round schools to expand to balanced calendar, from $1.5 million to $3.0 million. Senate maintained funding at $1.5 million. |
0 |
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16. MPSERS Rate Cap Technical Cost Savings (w/o Change to AROR). In the absence of the proposed reduction in the AROR, there would have been savings in the categorical that pays the cost for the unfunded accrued liabilities above the rate cap of 20.96% of payroll. |
(112,900,000) |
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17. MPSERS Cost Offset. Senate eliminated this categorical funding and used it to increase foundation allowance payments above the Governor's recommended foundation allowance. |
(100,000,000) |
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18. Federal Grants. Governor and Senate reduced Federal grant appropriation authority to align with projected grants to be received. |
(91,689,200) |
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19. Technical Adjustments. Governor and Senate included technical savings in foundation allowance costs ($45.0 million), special education ($9.9 million), renaissance zone reimbursement ($2.0 million), and school bond loan fund debt service ($1.0 million), and included technical cost increases in cash flow borrowing ($3.5 million), school breakfast ($2.0 million), and promise zone reimbursement ($0.5 million). |
(51,900,000) |
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20. Program Eliminations. Governor eliminated: computer adaptive tests ($4.0 million), gang prevention and intervention ($3.0 million), consolidation innovation ($3.0 million), nonpublic schools reimbursement for mandates ($2.5 million), student transition grants in dissolved districts ($1.9 million), financial data analysis tools ($1.5 million), online algebra tool ($1.5 million), Michigan Education Corps ($1.0 million), strict discipline academies ($750,000), dropout recovery ($750,000), competency-based transcript ($500,000), Detroit Pre-college Engineering Program ($340,000), Marshall's cooperative education grant ($300,000), Van Buren ISD's partnership grant with its health department ($250,000), 10 Cents a Meal ($250,000), Science Olympiad ($250,000), Van Andel Education Institute ($250,000), kindergarten readiness assessment ($185,000), early learning collaborative ($175,000), conductive learning center study ($150,000), and culinary education ($79,000). Senate retained computer adaptive tests ($5.0 million), nonpublic schools reimbursement ($2.5 million), financial data analysis ($1.75 million), online algebra ($1.2 million), Michigan Education Corps ($2.5 million), kindergarten entry assessment ($1.0 million), SDAs and dropout recovery ($750,000 each), DAPCEP ($340,000), 10 Cents a Meal, Van Andel, and Science Olympiad ($250,000 each), early learning collaborative ($175,000), conductive learning ($150,000), and culinary arts education ($79,000). |
(5,645,000) |
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21. Cap Funding for Shared-Time Programs. Governor capped the amount of funding available for pupils in shared-time programs at $60.0 million, a $55.0 million reduction from the estimated FY 2016-17 spending level of $115.0 million. Senate restored all but $2.0 million of the Governor's reduction; Senate capped shared-time FTEs at 0.75 per pupil. |
(2,000,000) |
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22. Flint Water Emergency. Governor and Senate reduced funding from $10.1 million to $8.7 million, and changed the fund source from GF/GP to School Aid Fund. |
(1,412,500) |
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23. Youth ChalleNGe. Governor and Senate reduced funding from $1.6 million to $1.5 million. |
(110,000) |
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24. College Readiness Outreach. Governor and Senate reduced funding from $3.05 million to $3.0 million by eliminating a $50,000 earmark for outreach on dual enrollment programming. |
(50,000) |
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25. Cyber Schools' Foundation Allowance 20% Reduction. Governor reduced cyber schools' foundation allowances 20% ($16.0 million), roughly $1,500 per pupil. Senate did not concur. |
0 |
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26. Economic Adjustments. Includes $69,400 Gross and $42,800 GF/GP for economic adjustments. |
69,400 |
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27. Comparison to Governor's Recommendation. The Senate is $15.8 million Gross and $20.0 million GF/GP below the Governor. |
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$125,863,400 |
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FY 2017-18 Senate-Passed Gross Appropriation................................................................. |
$14,287,705,500 |
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Boilerplate Changes from FY 2016-17 Year-to-Date: |
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1. Shared-Time FTE Cap. Senate capped the amount of an FTE that may be claimed by a district under shared-time programs at 0.75 FTE. (Sec. 6(4)(ii)) |
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2. Section 20m Calculations Rolled into Base. Governor and Senate proposed to roll the majority of the estimated costs under Section 20m (the portion of the foundation allowance increase in FY 2016-17 that exceeded inflation) into the base funding for affected districts, to the extent allowed by the estimate for the inflation measure used in FY 2017-18. (Sections 20m and 22b) |
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3. School Reform Office. Governor proposed to broaden the list of sections for which a chief executive officer may operate in schools to include Sections 391(3), 507(6), 528(6), or 561(6) of the Revised School Code. Senate did not include these additional sections, but did include work project language allowing any FY 2016-17 unexpended funds to carry forward and be used for supplemental payments to affected districts. (Sec. 21) |
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4. Shared-Time Pupil Payments. Governor removed payments for shared-time pupils from Sections 22a and 22b (foundation allowance sections) and into a new Section 23f. Senate did not concur. (Sections 22a, 22b, 23f) |
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5. At Risk. Governor broadened both the districts eligible for At Risk (to include all districts) and the pupils eligible (to include those who are "economically disadvantaged"). Economically disadvantaged would include students eligible for free or reduced-price meals, those whose families are receiving supplemental nutrition or TANF assistance, those who are homeless or migrant, and those who are in foster care. (Current law only counts students eligible for free meals.) In addition, Governor changed the payment calculation from 11.5% of a district's foundation allowance to 11.5% of the statewide average (with districts above the basic capped at the basic for this calculation). Also, Governor required districts to use the funds to address chronic absenteeism, ensuring that economically disadvantaged students do not score worse as a group than non-disadvantaged students on English language arts and math assessments, and ensuring that at least 65% of high school pupils take CTE, advanced placement, or international baccalaureate classes. Other language changes allow districts to use up to 5% for professional development on multi-tiered systems of supports, require MDE to calculate reports on the top 30%/bottom 30% of math and English language arts exams, and replace the formula triggered for mandatory spending in certain categories with a different process and metrics. Senate concurred in expanding the definition of 'at risk' to include 'economically disadvantaged' - this increases the number of eligible children statewide from roughly 595,000 to roughly 678,000. Senate did not concur with the Governor's proposed funding plan for this section. Instead, Senate included a two-step process to spend an additional $95.0 million above the current year: 1) pay all currently-eligible districts the same per pupil amount in FY 2017-18 as received in FY 2016-17, applied to the broader base of economically disadvantaged students (costs $54.0 million); and, 2) pay all districts (including those currently ineligible for funding) an equal amount per pupil - for FY 2017-18, this would be estimated at $60 per student (costs $41.0 million). Senate changed language to use funds for implementing Public Act 306 of 2016 (early literacy legislation) in grades K to 3, and for implementation of multi-tiered systems of support (MTSS) for grades K to 8. Senate concurred in language on absenteeism and ensuring that economically disadvantaged students do not perform at lower levels than non-economically disadvantaged peers. Senate added a $5.0 million earmark to districts who have students with low ELL scores. (Sec. 31a) |
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6. Great Start Readiness Program (GSRP). Governor and Senate included GSRP workgroup recommendations that change the source of data for estimating need in each intermediate district, that require a calculation of statewide unmet need, and that would direct any additional funds to ISDs whose percentage served was less than the statewide average. Governor removed language allowing ISDs to offer services to children in families whose income was at or below 300% of the Federal poverty level (FPL) if there was no waiting list for kids served at 250% of FPL; Senate did not concur in this change and retained current law. Governor and Senate included language providing that funding to each ISD is the lesser of the previous number of children served or capacity. (Sections 32d and 39) |
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7. Special Education - Enrolling Non-Resident Pupils. Senate included changes to existing subsections (14) and (15) that pertain to public school academies, including cyber schools, enrolling students from outside the intermediate district in which the PSA is located. New language would require an agreement on costs between the PSA and the resident district or ISD; in the absence of an agreement, the PSA could enroll but not bill for any additional costs; or, the resident district or ISD could provide services. PSAs would receive Federal funding for special education students directly from MDE instead of from the ISD, and the ISD in which the PSA is located would ensure compliance with rules and statute, and receive administrative funding from MDE. Existing penalty would be removed. (Sec. 51a) |
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8. CTE Equipment Upgrades. Governor increased funding and restructured the formulaic program to be a competitive grant program. Senate increased funding and retained formulaic distribution, although for a broader set of allowable uses, including training on new equipment and professional development for computer science and coding. (Sec. 61c) |
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9. Educator Evaluations. Governor added language specifying that local activities funded under the section may include training for evaluators and observers, professional learning for teachers, principals, and other school leaders, and the purchase of licenses, technology, and other materials to fully implement locally-chosen evaluation tools. Senate did not include this section. (Sec. 95a) |
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10. Math and Science Education. Governor restructured funding for the 33 existing math and science centers, replacing them with a network of ten regional MiSTEM centers aligned with prosperity regions. Senate retained current law and current structure of math and science centers. (Sec. 99s) |
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11. Adult Education. Senate delayed by one year the planned phase-in of the new funding formula. (Sec. 107) |
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12. Labor Day Waiver Hearing. Senate included a requirement that a district seeking a waiver to begin school before Labor Day hold a public hearing in the district with the Michigan Department of Education. (Sec. 160) |
Date Completed: 5-4-17 Fiscal Analyst: Kathryn Summers
This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.