April 18, 2018, Introduced by Rep. Kosowski and referred to the Committee on Appropriations.
A bill to amend 1979 PA 94, entitled
"The state school aid act of 1979,"
by amending sections 11, 20, and 22b (MCL 388.1611, 388.1620, and
388.1622b), section 11 as amended by 2017 PA 143 and sections 20
and 22b as amended by 2017 PA 108.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec.
11. (1) For the fiscal year ending September 30, 2017,
there
is appropriated for the public schools of this state and
certain
other state purposes relating to education the sum of
$12,069,644,300.00
from the state school aid fund, the sum of
$179,100,000.00
from the general fund, an amount not to exceed
$72,000,000.00
from the community district education trust fund
created
under section 12 of the Michigan trust fund act, 2000 PA
489,
MCL 12.262, and an amount not to exceed $100.00 from the water
emergency
reserve fund. For the fiscal year
ending September 30,
2018,
2019, there is appropriated for the public schools of this
state and certain other state purposes relating to education the
sum
of $12,547,270,300.00 $12,747,325,200.00
from the state school
aid
fund, the sum of $215,000,000.00 $200,000,000.00 from the
general fund, an amount not to exceed $72,000,000.00 from the
community district education trust fund created under section 12 of
the Michigan trust fund act, 2000 PA 489, MCL 12.262, an amount not
to exceed $23,100,000.00 from the MPSERS retirement obligation
reform reserve fund, and an amount not to exceed $100.00 from the
water emergency reserve fund. In addition, all available federal
funds
are appropriated each fiscal year for the fiscal years year
ending
September 30, 2017 and September 30, 2018.2019.
(2) The appropriations under this section shall be allocated
as provided in this article. Money appropriated under this section
from the general fund shall be expended to fund the purposes of
this article before the expenditure of money appropriated under
this section from the state school aid fund.
(3) Any general fund allocations under this article that are
not expended by the end of the state fiscal year are transferred to
the school aid stabilization fund created under section 11a.
Sec.
20. (1) For 2017-2018, 2018-2019,
both of the following
apply:
(a)
The basic foundation allowance is $8,289.00.$8,409.00.
(b)
The minimum foundation allowance is $7,631.00.$7,991.00.
(2) The amount of each district's foundation allowance shall
be calculated as provided in this section, using a basic foundation
allowance in the amount specified in subsection (1).
(3) Except as otherwise provided in this section, the amount
of a district's foundation allowance shall be calculated as
follows, using in all calculations the total amount of the
district's foundation allowance as calculated before any proration:
(a) Except as otherwise provided in this subdivision, for a
district that had a foundation allowance for the immediately
preceding state fiscal year that was at least equal to the minimum
foundation allowance for the immediately preceding state fiscal
year, but less than the basic foundation allowance for the
immediately preceding state fiscal year, the district shall receive
a foundation allowance in an amount equal to the sum of the
district's foundation allowance for the immediately preceding state
fiscal
year plus the difference between twice three times the
dollar amount of the adjustment from the immediately preceding
state fiscal year to the current state fiscal year made in the
basic foundation allowance and [(the difference between the basic
foundation allowance for the current state fiscal year and basic
foundation allowance for the immediately preceding state fiscal
year minus $20.00) times (the difference between the district's
foundation allowance for the immediately preceding state fiscal
year and the minimum foundation allowance for the immediately
preceding state fiscal year) divided by the difference between the
basic foundation allowance for the current state fiscal year and
the minimum foundation allowance for the immediately preceding
state fiscal year.] However, the foundation allowance for a
district that had less than the basic foundation allowance for the
immediately preceding state fiscal year shall not exceed the basic
foundation allowance for the current state fiscal year.
(b) Except as otherwise provided in this subsection, for a
district that in the immediately preceding state fiscal year had a
foundation allowance in an amount equal to the amount of the basic
foundation allowance for the immediately preceding state fiscal
year,
the district shall receive a foundation allowance for 2017-
2018
2018-2019 in an amount equal to the basic foundation allowance
for
2017-2018.2018-2019.
(c) For a district that had a foundation allowance for the
immediately preceding state fiscal year that was greater than the
basic foundation allowance for the immediately preceding state
fiscal year, the district's foundation allowance is an amount equal
to the sum of the district's foundation allowance for the
immediately preceding state fiscal year plus the lesser of the
increase in the basic foundation allowance for the current state
fiscal year, as compared to the immediately preceding state fiscal
year, or the product of the district's foundation allowance for the
immediately preceding state fiscal year times the percentage
increase in the United States consumer price index in the calendar
year ending in the immediately preceding fiscal year as reported by
the May revenue estimating conference conducted under section 367b
of the management and budget act, 1984 PA 431, MCL 18.1367b.
(d) For a district that has a foundation allowance that is not
a whole dollar amount, the district's foundation allowance shall be
rounded up to the nearest whole dollar.
(e) For a district that received a foundation allowance
supplemental payment calculated under section 20m and paid under
section
22b for 2016-2017, 2017-2018,
the district's 2016-2017
2017-2018 foundation allowance is considered to have been an amount
equal
to the sum of the district's actual 2016-2017 2017-2018
foundation allowance as otherwise calculated under this section
plus the lesser of the per pupil amount of the district's
supplemental
payment for 2016-2017 2017-2018
as calculated under
section 20m or the product of the district's foundation allowance
for the immediately preceding state fiscal year times the
percentage increase in the United States consumer price index in
the calendar year ending in the immediately preceding fiscal year
as reported by the May revenue estimating conference conducted
under section 367b of the management and budget act, 1984 PA 431,
MCL 18.1367b.
(4) Except as otherwise provided in this subsection, beginning
in 2014-2015, the state portion of a district's foundation
allowance is an amount equal to the district's foundation allowance
or the basic foundation allowance for the current state fiscal
year, whichever is less, minus the local portion of the district's
foundation allowance. For a district described in subsection
(3)(c), beginning in 2014-2015, the state portion of the district's
foundation allowance is an amount equal to $6,962.00 plus the
difference between the district's foundation allowance for the
current state fiscal year and the district's foundation allowance
for 1998-99, minus the local portion of the district's foundation
allowance. For a district that has a millage reduction required
under section 31 of article IX of the state constitution of 1963,
the state portion of the district's foundation allowance shall be
calculated as if that reduction did not occur. For a receiving
district, if school operating taxes continue to be levied on behalf
of a dissolved district that has been attached in whole or in part
to the receiving district to satisfy debt obligations of the
dissolved district under section 12 of the revised school code, MCL
380.12, the taxable value per membership pupil of property in the
receiving district used for the purposes of this subsection does
not include the taxable value of property within the geographic
area of the dissolved district. For a community district, if school
operating taxes continue to be levied by a qualifying school
district under section 12b of the revised school code, MCL 380.12b,
with the same geographic area as the community district, the
taxable value per membership pupil of property in the community
district to be used for the purposes of this subsection does not
include the taxable value of property within the geographic area of
the community district.
(5) The allocation calculated under this section for a pupil
shall be based on the foundation allowance of the pupil's district
of residence. For a pupil enrolled pursuant to section 105 or 105c
in a district other than the pupil's district of residence, the
allocation calculated under this section shall be based on the
lesser of the foundation allowance of the pupil's district of
residence or the foundation allowance of the educating district.
For a pupil in membership in a K-5, K-6, or K-8 district who is
enrolled in another district in a grade not offered by the pupil's
district of residence, the allocation calculated under this section
shall be based on the foundation allowance of the educating
district if the educating district's foundation allowance is
greater than the foundation allowance of the pupil's district of
residence. The calculation under this subsection shall take into
account a district's per-pupil allocation under section 20m.
(6) Except as otherwise provided in this subsection, for
pupils in membership, other than special education pupils, in a
public school academy, the allocation calculated under this section
is an amount per membership pupil other than special education
pupils in the public school academy equal to the foundation
allowance of the district in which the public school academy is
located or the state maximum public school academy allocation,
whichever is less. Except as otherwise provided in this subsection,
for pupils in membership, other than special education pupils, in a
public school academy that is a cyber school and is authorized by a
school district, the allocation calculated under this section is an
amount per membership pupil other than special education pupils in
the public school academy equal to the foundation allowance of the
district that authorized the public school academy or the state
maximum public school academy allocation, whichever is less.
However, a public school academy that had an allocation under this
subsection before 2009-2010 that was equal to the sum of the local
school operating revenue per membership pupil other than special
education pupils for the district in which the public school
academy is located and the state portion of that district's
foundation allowance shall not have that allocation reduced as a
result of the 2010 amendment to this subsection. Notwithstanding
section 101, for a public school academy that begins operations
after the pupil membership count day, the amount per membership
pupil calculated under this subsection shall be adjusted by
multiplying that amount per membership pupil by the number of hours
of pupil instruction provided by the public school academy after it
begins operations, as determined by the department, divided by the
minimum number of hours of pupil instruction required under section
101(3). The result of this calculation shall not exceed the amount
per membership pupil otherwise calculated under this subsection.
(7) Except as otherwise provided in this subsection, for
pupils in membership, other than special education pupils, in a
community district, the allocation calculated under this section is
an amount per membership pupil other than special education pupils
in the community district equal to the foundation allowance of the
qualifying school district, as described in section 12b of the
revised school code, MCL 380.12b, that is located within the same
geographic area as the community district.
(8) Subject to subsection (4), for a district that is formed
or reconfigured after June 1, 2002 by consolidation of 2 or more
districts or by annexation, the resulting district's foundation
allowance under this section beginning after the effective date of
the consolidation or annexation shall be the lesser of the sum of
the average of the foundation allowances of each of the original or
affected districts, calculated as provided in this section,
weighted as to the percentage of pupils in total membership in the
resulting district who reside in the geographic area of each of the
original or affected districts plus $100.00 or the highest
foundation allowance among the original or affected districts. This
subsection does not apply to a receiving district unless there is a
subsequent consolidation or annexation that affects the district.
The calculation under this subsection shall take into account a
district's per-pupil allocation under section 20m.
(9) Each fraction used in making calculations under this
section shall be rounded to the fourth decimal place and the dollar
amount of an increase in the basic foundation allowance shall be
rounded to the nearest whole dollar.
(10) State payments related to payment of the foundation
allowance for a special education pupil are not calculated under
this section but are instead calculated under section 51a.
(11) To assist the legislature in determining the basic
foundation allowance for the subsequent state fiscal year, each
revenue estimating conference conducted under section 367b of the
management and budget act, 1984 PA 431, MCL 18.1367b, shall
calculate a pupil membership factor, a revenue adjustment factor,
and an index as follows:
(a) The pupil membership factor shall be computed by dividing
the estimated membership in the school year ending in the current
state fiscal year, excluding intermediate district membership, by
the estimated membership for the school year ending in the
subsequent state fiscal year, excluding intermediate district
membership. If a consensus membership factor is not determined at
the revenue estimating conference, the principals of the revenue
estimating conference shall report their estimates to the house and
senate subcommittees responsible for school aid appropriations not
later than 7 days after the conclusion of the revenue conference.
(b) The revenue adjustment factor shall be computed by
dividing the sum of the estimated total state school aid fund
revenue for the subsequent state fiscal year plus the estimated
total state school aid fund revenue for the current state fiscal
year, adjusted for any change in the rate or base of a tax the
proceeds of which are deposited in that fund and excluding money
transferred into that fund from the countercyclical budget and
economic stabilization fund under the management and budget act,
1984 PA 431, MCL 18.1101 to 18.1594, by the sum of the estimated
total school aid fund revenue for the current state fiscal year
plus the estimated total state school aid fund revenue for the
immediately preceding state fiscal year, adjusted for any change in
the rate or base of a tax the proceeds of which are deposited in
that fund. If a consensus revenue factor is not determined at the
revenue estimating conference, the principals of the revenue
estimating conference shall report their estimates to the house and
senate subcommittees responsible for school aid appropriations not
later than 7 days after the conclusion of the revenue conference.
(c) The index shall be calculated by multiplying the pupil
membership factor by the revenue adjustment factor. If a consensus
index is not determined at the revenue estimating conference, the
principals of the revenue estimating conference shall report their
estimates to the house and senate subcommittees responsible for
school aid appropriations not later than 7 days after the
conclusion of the revenue conference.
(12) Payments to districts and public school academies shall
not be made under this section. Rather, the calculations under this
section shall be used to determine the amount of state payments
under section 22b.
(13) If an amendment to section 2 of article VIII of the state
constitution of 1963 allowing state aid to some or all nonpublic
schools is approved by the voters of this state, each foundation
allowance or per-pupil payment calculation under this section may
be reduced.
(14) As used in this section:
(a) "Certified mills" means the lesser of 18 mills or the
number of mills of school operating taxes levied by the district in
1993-94.
(b) "Combined state and local revenue" means the aggregate of
the district's state school aid received by or paid on behalf of
the district under this section and the district's local school
operating revenue.
(c) "Combined state and local revenue per membership pupil"
means the district's combined state and local revenue divided by
the district's membership excluding special education pupils.
(d) "Current state fiscal year" means the state fiscal year
for which a particular calculation is made.
(e) "Dissolved district" means a district that loses its
organization, has its territory attached to 1 or more other
districts, and is dissolved as provided under section 12 of the
revised school code, MCL 380.12.
(f) "Immediately preceding state fiscal year" means the state
fiscal year immediately preceding the current state fiscal year.
(g) "Local portion of the district's foundation allowance"
means an amount that is equal to the difference between (the sum of
the product of the taxable value per membership pupil of all
property in the district that is nonexempt property times the
district's certified mills and, for a district with certified mills
exceeding 12, the product of the taxable value per membership pupil
of property in the district that is commercial personal property
times the certified mills minus 12 mills) and (the quotient of the
product of the captured assessed valuation under tax increment
financing acts times the district's certified mills divided by the
district's membership excluding special education pupils).
(h) "Local school operating revenue" means school operating
taxes levied under section 1211 of the revised school code, MCL
380.1211. For a receiving district, if school operating taxes are
to be levied on behalf of a dissolved district that has been
attached in whole or in part to the receiving district to satisfy
debt obligations of the dissolved district under section 12 of the
revised school code, MCL 380.12, local school operating revenue
does not include school operating taxes levied within the
geographic area of the dissolved district.
(i) "Local school operating revenue per membership pupil"
means a district's local school operating revenue divided by the
district's membership excluding special education pupils.
(j) "Maximum public school academy allocation", except as
otherwise provided in this subdivision, means the maximum per-pupil
allocation as calculated by adding the highest per-pupil allocation
among all public school academies for the immediately preceding
state fiscal year plus the difference between twice the amount of
the difference between the basic foundation allowance for the
current state fiscal year and the basic foundation allowance for
the immediately preceding state fiscal year and [(the amount of the
difference between the basic foundation allowance for the current
state fiscal year and the basic foundation allowance for the
immediately preceding state fiscal year minus $20.00) times (the
difference between the highest per-pupil allocation among all
public school academies for the immediately preceding state fiscal
year and the minimum foundation allowance for the immediately
preceding state fiscal year) divided by the difference between the
basic foundation allowance for the current state fiscal year and
the minimum foundation allowance for the immediately preceding
state fiscal year.] For the purposes of this subdivision, for 2017-
2018, the maximum public school academy allocation is $7,631.00.
(k) "Membership" means the definition of that term under
section 6 as in effect for the particular fiscal year for which a
particular calculation is made.
(l) "Nonexempt property" means property that is not a
principal residence, qualified agricultural property, qualified
forest property, supportive housing property, industrial personal
property, commercial personal property, or property occupied by a
public school academy.
(m) "Principal residence", "qualified agricultural property",
"qualified forest property", "supportive housing property",
"industrial personal property", and "commercial personal property"
mean those terms as defined in section 1211 of the revised school
code, MCL 380.1211.
(n) "Receiving district" means a district to which all or part
of the territory of a dissolved district is attached under section
12 of the revised school code, MCL 380.12.
(o) "School operating purposes" means the purposes included in
the operation costs of the district as prescribed in sections 7 and
18 and purposes authorized under section 1211 of the revised school
code, MCL 380.1211.
(p) "School operating taxes" means local ad valorem property
taxes levied under section 1211 of the revised school code, MCL
380.1211, and retained for school operating purposes.
(q) "Tax increment financing acts" means 1975 PA 197, MCL
125.1651 to 125.1681, the tax increment finance authority act, 1980
PA 450, MCL 125.1801 to 125.1830, the local development financing
act, 1986 PA 281, MCL 125.2151 to 125.2174, the brownfield
redevelopment
financing act, 1996 PA 381, MCL 125.2651 to 125.2672,
125.2670, or the corridor improvement authority act, 2005 PA 280,
MCL 125.2871 to 125.2899.
(r) "Taxable value per membership pupil" means taxable value,
as certified by the county treasurer and reported to the
department, for the calendar year ending in the current state
fiscal year divided by the district's membership excluding special
education pupils for the school year ending in the current state
fiscal year.
Sec. 22b. (1) For discretionary nonmandated payments to
districts
under this section, there is allocated for 2016-2017 an
amount
not to exceed $3,841,000,000.00 from the state school aid
fund
and general fund appropriations in section 11 and an amount
not
to exceed $72,000,000.00 from the community district education
trust
fund appropriation in section 11, and there is allocated for
2017-2018
2018-2019 an amount not to exceed $3,965,500,000.00
$4,379,600,000.00 from the state school aid fund and general fund
appropriations in section 11 and an amount not to exceed
$72,000,000.00 from the community district education trust fund
appropriation in section 11. Except for money allocated from the
community district trust fund, money allocated under this section
that is not expended in the state fiscal year for which it was
allocated, as determined by the department, may be used to
supplement the allocations under sections 22a and 51c in order to
fully fund those calculated allocations for the same fiscal year.
(2) Subject to subsection (3) and section 296, the allocation
to a district under this section shall be an amount equal to the
sum of the amounts calculated under sections 20, 20m, 51a(2),
51a(3), and 51a(11), minus the sum of the allocations to the
district under sections 22a and 51c. For a community district, the
allocation as otherwise calculated under this section shall be
increased by an amount equal to the amount of local school
operating tax revenue that would otherwise be due to the community
district if not for the operation of section 386 of the revised
school code, MCL 380.386, and this increase shall be paid from the
community district education trust fund allocation in subsection
(1) in order to offset the absence of local school operating
revenue in a community district in the funding of the state portion
of the foundation allowance under section 20(4).
(3) In order to receive an allocation under subsection (1),
each district shall do all of the following:
(a) Comply with section 1280b of the revised school code, MCL
380.1280b.
(b) Comply with sections 1278a and 1278b of the revised school
code, MCL 380.1278a and 380.1278b.
(c) Furnish data and other information required by state and
federal law to the center and the department in the form and manner
specified by the center or the department, as applicable.
(d) Comply with section 1230g of the revised school code, MCL
380.1230g.
(e) Comply with section 21f.
(4) Districts are encouraged to use funds allocated under this
section for the purchase and support of payroll, human resources,
and other business function software that is compatible with that
of the intermediate district in which the district is located and
with other districts located within that intermediate district.
(5) From the allocation in subsection (1), the department
shall pay up to $1,000,000.00 in litigation costs incurred by this
state related to commercial or industrial property tax appeals,
including, but not limited to, appeals of classification, that
impact revenues dedicated to the state school aid fund.
(6) From the allocation in subsection (1), the department
shall pay up to $1,000,000.00 in litigation costs incurred by this
state associated with lawsuits filed by 1 or more districts or
intermediate districts against this state. If the allocation under
this section is insufficient to fully fund all payments required
under this section, the payments under this subsection shall be
made in full before any proration of remaining payments under this
section.
(7) It is the intent of the legislature that all
constitutional obligations of this state have been fully funded
under sections 22a, 31d, 51a, 51c, and 152a. If a claim is made by
an entity receiving funds under this article that challenges the
legislative determination of the adequacy of this funding or
alleges that there exists an unfunded constitutional requirement,
the state budget director may escrow or allocate from the
discretionary funds for nonmandated payments under this section the
amount as may be necessary to satisfy the claim before making any
payments to districts under subsection (2). If funds are escrowed,
the escrowed funds are a work project appropriation and the funds
are carried forward into the following fiscal year. The purpose of
the work project is to provide for any payments that may be awarded
to districts as a result of litigation. The work project shall be
completed upon resolution of the litigation.
(8) If the local claims review board or a court of competent
jurisdiction makes a final determination that this state is in
violation of section 29 of article IX of the state constitution of
1963 regarding state payments to districts, the state budget
director shall use work project funds under subsection (7) or
allocate from the discretionary funds for nonmandated payments
under this section the amount as may be necessary to satisfy the
amount owed to districts before making any payments to districts
under subsection (2).
(9) If a claim is made in court that challenges the
legislative determination of the adequacy of funding for this
state's constitutional obligations or alleges that there exists an
unfunded constitutional requirement, any interested party may seek
an expedited review of the claim by the local claims review board.
If the claim exceeds $10,000,000.00, this state may remove the
action to the court of appeals, and the court of appeals shall have
and shall exercise jurisdiction over the claim.
(10) If payments resulting from a final determination by the
local claims review board or a court of competent jurisdiction that
there has been a violation of section 29 of article IX of the state
constitution of 1963 exceed the amount allocated for discretionary
nonmandated payments under this section, the legislature shall
provide for adequate funding for this state's constitutional
obligations at its next legislative session.
(11) If a lawsuit challenging payments made to districts
related to costs reimbursed by federal title XIX Medicaid funds is
filed against this state, then, for the purpose of addressing
potential liability under such a lawsuit, the state budget director
may place funds allocated under this section in escrow or allocate
money from the funds otherwise allocated under this section, up to
a maximum of 50% of the amount allocated in subsection (1). If
funds are placed in escrow under this subsection, those funds are a
work project appropriation and the funds are carried forward into
the following fiscal year. The purpose of the work project is to
provide for any payments that may be awarded to districts as a
result of the litigation. The work project shall be completed upon
resolution of the litigation. In addition, this state reserves the
right to terminate future federal title XIX Medicaid reimbursement
payments to districts if the amount or allocation of reimbursed
funds is challenged in the lawsuit. As used in this subsection,
"title XIX" means title XIX of the social security act, 42 USC 1396
to
1396v.1396w-5.
Enacting section 1. In accordance with section 30 of article
IX of the state constitution of 1963, total state spending from
state sources on state school aid under article I of the state
school aid act of 1979, 1979 PA 94, MCL 388.1601 to 388.1772, as
amended by this amendatory act for fiscal year 2018-2019 is
estimated at $13,051,225,300.00 and state appropriations for school
aid to be paid to local units of government for fiscal year 2018-
2019 are estimated at $12,873,596,100.00.
Enacting section 2. This amendatory act takes effect October
1, 2018.