FY 2018-19 SCHOOL AID BUDGET S.B. 863 (CR-1): CONFERENCE REPORT
*As of May 3, 2018.
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$14,584,313,900 |
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Items Included by the Senate and House |
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1. MPSERS Rate Cap. Governor, Senate, and House increased funding required to be paid by the State due to the statutory cap on payments made by local employers for legacy costs in the Michigan Public School Employees Retirement System (MPSERS). |
71,916,000 |
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2. MPSERS Hold Harmless. Governor, Senate, and House increased funding to hold districts harmless from increased costs due to the lowering of the assumed rate of return on assets. |
39,170,000 |
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3. Special Education. Governor, Senate, and House increased funds to reflect cost estimates. |
24,700,000 |
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4. Cash Flow Borrowing Costs. Governor, Senate, and House increased funding by $17.5 million to reimburse the General Fund for the School Aid Fund's cash flow borrowing costs. |
17,500,000 |
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5. MPSERS Increased Costs under P.A. 92 of 2017. Legislation enacted under Public Act 92 of 2017 increased costs required to be paid by the School Aid Fund. Governor, Senate, and House increased this line item's funding by $14.5 million. |
14,500,000 |
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6. Special Education - Early On. Governor, Senate, and House recommended $5.0 million for a new program recommended by the Special Education Task Force for Early On services. |
5,000,000 |
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7. Partnership Model. Governor recommended a $2.0 million increase (for a total of $8.0 million) for the partnership model with MDE and academically-struggling districts. Senate and House did not concur. Conference added $1.0 million. |
1,000,000 |
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8. Promise Zones. Governor, Senate, and House increased funding by $1.5 million. |
1,500,000 |
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9. School Lunch. Governor, Senate, and House increased school lunch funding by $648,900. |
648,900 |
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10. MPSERS One-Time Additional Payment toward Unfunded Liabilities. Governor, Senate, and House removed the one-time additional payment toward unfunded liabilities. |
(200,000,000) |
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11. Technical Foundation Allowance Cost Adjustments. Governor, Senate, and House included technical adjustments to the foundation allowance due to pupils and taxable values. |
(100,420,900) |
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12. Reduction in Cyber School Foundation Allowance. Governor reduced the foundation allowance for cyber schools by 25%, saving the State $25,000,000. Senate and House did not concur and restored the funding, meaning no change to current law. |
0 |
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13. Flint Declaration of Emergency. Governor reduced funding to $3.2 million GF/GP. Senate and House concurred. |
(5,500,000) |
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14. Federal Grants. Governor, Senate, and House reduced Federal grants by $2.2 million. |
(2,200,000) |
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15. Renaissance Zone Costs. Governor, Senate, and House reduced renaissance zone funding by $2.0 million to align with projected reimbursements. |
(2,000,000) |
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16. MDE Early Literacy Administration. Governor, Senate, and House transferred $1.0 million GF/GP for early literacy administration to the MDE budget. |
(1,000,000) |
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17. FIRST Robotics for Nonpublics. Governor eliminated $300,000 GF/GP supporting FIRST Robotics classes in nonpublic schools. Senate and House did not concur. Further Conference added an additional $500,000 to pay for expanded robotics competitions. |
500,000 |
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Conference Agreement on Items of Difference |
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18. Foundation Allowance. Governor and House increased the foundation allowance using the "2x" formula, from $120-$240 per pupil, bringing the minimum to $7,871 and basic to $8,409. Senate increased from $115 to $230 per pupil; minimum of $7,861 and basic of $8,404. Senate transferred $400.0 million of partnership districts' discretionary foundation allowance funding into a new categorical where those districts would need to meet certain criteria related to their partnership agreement in order to access their calculated discretionary foundation allowance payment. Conference provided a $120-$240 per-pupil increase, and required partnership districts to comply with requirements in Section 22p in order to receive the discretionary portion of their foundation allowances. (Sections 22a, 22b, and new 22p) |
312,000,000 |
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19. School Mental Health and Support Services Fund. Conference included the transfer of $30.0 million School Aid Fund to this new Fund, with spending from the Fund to be decided in the future by supplemental appropriation. |
0 |
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20. Career and Technical Education (CTE). Governor recommended $5.0 million in new funding to incentivize districts to enroll students in CTE programs. Conference concurred. |
5,000,000 |
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21. CTE Equipment. Governor eliminated grants for CTE equipment ($12.5 million). Conference appropriated $2.5 to career education planning districts without CTE millages. |
(10,000,000) |
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22. MPSERS Cost Offset for Intermediate School Districts (ISDs). Senate included $5.0 million for cost offset funding to ISDs equal to roughly 45% of the assistance provided to districts and participating public school academies. Conference did not include. |
0 |
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23. Special Education Millage Equalization. Senate increased funding to ISDs to equalize millage revenue for special education. Conference increased $2.25 million. |
2,250,000 |
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24. Adult Education. Senate and Conference increased adult education by $3.5 million. |
3,500,000 |
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25. Increases in Other Existing Programs. Conference increased 10 Cents a Meal by $200,000, Detroit Area Pre-College Engineering Program by $60,000, culinary training by $21,000, ISD operations by 2% ($1.3 million), Advanced Placement incentives by $250,000, Algebra Nation by $400,000, STEM grants by $200,000, Imagine Learning by $1.0 million, and computer adaptive tests and benchmarks ($5.2 million). Conference added $100,000 for Jobs for Michigan Grads program, $100,000 for Conductive Learning (allocating a total of $250,000) and $250,000 for a dyslexia collaboration grant. |
9,126,000 |
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26. Transportation Funding. Senate increased funding and broadened eligibility to districts with 7.7 or fewer pupils per square mile. Conference concurred. |
1,000,000 |
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27. Summer Reading Pilot Program. Senate included $550,000 for a new pilot program focusing on summer reading. Conference included, but at $500,000. |
500,000 |
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28. Special Education - Parental Support and Mediation. Governor and Senate recommended $500,000 GF/GP for a new program for mediation and parental support services. House and Conference did not include. |
0 |
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29. Reduction in Shared-Time Funding. Governor capped the number of shared-time FTEs that may be claimed by a district and removed kindergarten from reimbursement, resulting in estimated State savings of $67,900,000. Senate restored the majority of the reductions, but retained the elimination of kindergarten shared-time and also implemented a 0.67 per-FTE cap (down from 0.75) and payment equal to the minimum foundation allowance for each pupil counted in shared-time programming. House and Conference did not reduce. |
0 |
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30. Dana Center. Senate and Conference included $25,000 for the Dana Center to focus on improving partnerships between K-12 and postsecondary to address remedial education. |
25,000 |
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31. Assessments. Governor, Senate, and House reduced funding for an online reporting tool for assessments from $3.2 million to $0.5 million. Also, Governor eliminated $1.0 million supporting a kindergarten entry observation tool. Conference funded KEO at $1.5 million. |
(2,200,000) |
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32. Elimination of Numerous Programs. Conference eliminated the following programs: CTE counselors ($160,000), MiBright Future ($1.0 million GF/GP), competency-based education grants ($500,000 GF), cybersecurity competitions ($500,000), digital assessment preparation ($250,000 GF/GP), and Van Andel Education Institute ($150,000 GF/GP). |
(2,560,000) |
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33. Reduction in Various Programs. Conference reduced the reimbursement for nonpublic mandates to $250,000 (from $2.5 million) and year-round schools grants to $750,000. |
(3,000,000) |
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34. GF/GP Fund Shift. Conference reduced GF/GP support of the K-12 budget to $60.0 million in FY 2018-19, replaced with School Aid Fund revenue. |
0 |
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35. Economic Adjustments. Conference included $199,000 Gross and $140,700 GF/GP for total economic adjustments, of which an estimated $37,500 Gross and $23,900 GF/GP is for legacy retirement costs (pension and retiree health). |
199,900 |
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36. FY 2018-19 One-Time Gross Appropriations. Conference included $92,369,100 in items funded with one-time revenue ($88,139,000 for reimbursement for MPSERS assumed rate of return costs, $1.0 million increase for partnership districts, and $3,230,100 for Flint). |
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$181,154,900 |
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FY 2018-19 Conference Report Ongoing/One-Time Gross Appropriation............................. |
$14,765,468,800 |
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Amount Over/(Under) GF/GP Target: |
$0 |
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Boilerplate Changes from FY 2017-18 Year-to-Date: |
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Items Included by the Senate and House |
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1. Early Literacy. Governor, Senate, and House included language requiring the State Superintendent to designate as critical shortage any employees hired or contracted for under the funds provided in Section 35a. (Sec. 35a) |
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2. STEM Participation Report. Governor, Senate, and House removed a report that would provide the number of male and female participants in MiSTEM centers, and the steps centers take to reduce disparity in participation. (Sec. 99s) |
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3. Legal Action against the State. Governor proposed to repeal the section providing for a penalty in an amount equal to the amount spent if a district or ISD uses State funding to pay for an expense related to a legal action initiated by the district or ISD against the State. Senate and House did not concur. (Sec. 164g) |
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4. Collective Bargaining Agreement Penalty. Governor repealed language penalizing a district or ISD 5% of State aid if it enters into certain bargaining agreements outlined in the section. Senate and House did not concur. (Sec. 164h) |
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Conference Agreement on Items of Difference |
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5. Shared Time and Tuition Pupils. Conference concurred with Senate to include a cap on future growth in shared-time programs (growth not to exceed 10%), but did not include Senate's proposed change in the maximum FTE that may be counted in a shared-time program. Conference concurred with the House to retain kindergarten as an eligible grade for shared-time programs. Conference added language prohibiting a district from counting a pupil in membership if that pupil lived in a different state previous and is charged tuition by the district. (Sec. 6) |
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6. Hardship Repayments. Governor reduced from nine to four the number of years a district may repay an adjustment, when that repayment is determined to cause a hardship, and removed language allowing for the Department to waive all or a portion of a repayment under certain conditions. Conference retained the nine-year maximum repayment timeframe, but concurred with Governor to remove language allowing the waiving of all or a portion of a repayment. In addition, Conference limited audits to the current or immediately preceding year. (Sec. 15) |
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7. Grant Process Timeline. House required MDE to open and award grants under certain timelines. Conference concurred, with these date changes: September 1 for opening grants; December 1 for awarding grants. (Sec. 17c) |
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8. Cyber School Reporting. Governor and House included cyber schools in the mandated report provided by districts on the costs to provide virtual learning. Senate did not concur. Conference included the report. (Sec. 18) |
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9. Partnership Model. Senate added language allowing the State Superintendent to waive burdensome administrative rules for partnership districts, and to require districts to include the crafting of goals that put students on track to meet or exceed grade level proficiency. Conference concurred with Senate. (Sec. 21h) |
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10. Partnership District Requirements to Receive Discretionary Portion of Foundation Allowance. Senate included requirements for partnership districts to meet to receive the discretionary portion of their foundation allowance ((i.e., the growth since Proposal A). Conference concurred, but with tweaks to the requirements. (Sections 22b, 22p) |
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11. At Risk. Governor made a number of changes in this section, including replacing the current formula that would otherwise take effect in FY 2018-19 for districts meeting certain academic benchmarks with a requirement that a district whose At Risk population performed lower than the statewide average would be required to either attain the statewide average or an improvement of at least 10 percentage points by FY 2020-21. If the district failed to meet either of those benchmarks by that date, then the district would be subject to the partnership model. Senate and House did not concur, but had different changes throughout. Conference delayed the formula until 2019-20, and allowed districts to demonstrate improvement in 3rd grade ELA and 8th grade math (newly added) with one year's growth on a benchmark test. Conference included a number of other changes throughout the section as well. (Sec. 31a) |
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12. School Readiness. Conference added new language requiring the reimbursement for transportation costs for students at community-based providers as well as public providers, included a requirement for MDE to evaluate and approve age-appropriate curricula, and earmarked $1.0 million for professional development to change curriculum. (Sec. 32d) |
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13. Michigan Teacher Council. Senate included language requiring the Department of Education to create the Michigan Teacher Council to provide feedback, best practices, and advice related to teacher preparation, retention, compensation, and other topics. Conference did not include. |
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14. Assessment Changes. Governor changed the grades for the summative science test to be taken from 4 and 7 to 5 and 8, and added language requiring the Department to provide guidance to districts on optionally adopting and implementing department-approved benchmark assessments, and to recommend that districts commit to using the same benchmark assessment for not less than three years before changing to another test. Conference concurred. Conference retained $1.5 million for a kindergarten entry observation tool and added language requiring the summative assessments for math and ELA to be aligned to the PSAT, and conditioned reimbursement for benchmark assessments on districts choosing one benchmark and using it for at least three years. (Sections 102d, 104, and 104c) |
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15. School before Labor Day. Governor removed the requirement that the public hearing held before a school seeks a waiver to start school before Labor Day be a joint meeting with the Department. Conference did not concur. (Sec. 160) |
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16. Shared Time. Governor and Senate proposed to remove the payment for nonpublic kindergarten students enrolled in shared time programs at a public school. In addition, Governor and Senate added language clarifying that State aid would be provided only for nonessential elective courses, and that a curricular offering may include an optional experience. However, to be provided State aid, that course and optional experience must be available to full-time pupils in the minor's grade level or age group, subject to the same requirements that apply to a full-time pupil's participation. Conference included a requirement for background checks, a requirement that optional experiences be offered on a schedule making them available to non-shared time students, and various information from districts. (Sec. 166b) |
Date Completed: 6-7-18 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.