|February 17, 2015
Governor Releases His Budget - But What's In It For My District
The Governor released his budget last week and referred to his investment in education. We know that the devil is in the details. We also know that coming out of the Consensus Revenue Estimating Conference (CREC), the School Aid Fund (SAF) was in good shape, but the General Fund was not. Is the Governor saying positive things about investing in education while really gutting the SAF to cover the shortfall in the General Fund? Again the devil is in the details, so we wanted to see the numbers and we just received some interesting district-by-district details!
2014-15 Budget Supplemental and Executive Order
Reduce the General Fund transfer to the SAF $ 80.5 million
To complicate matters even more, the executive order also eliminates the remaining section 147d MPSERS payments for the current year. Districts received partial funding of the categorical in their November 2014 state aid payment, but have not received additional funding since. We are currently working with the Office of Retirement Services (ORS) and the Michigan Department of Education (MDE) to provide guidance as to the proper accounting procedures to record the funds that were received and implications on future recording of the liability, if any. Both departments are aware of the potential administrative burden this will place on districts as well as budgetary implications. The Office of Field Services and the Office of Special Education Services will also be consulted to ascertain if the funding change will cause reason to revise other district related federal or state budgets. We’ll get the information out to you as soon as we receive the guidance.
The proposed budget increases the foundation allowance by $75 per pupil, increases 31a At-Risk funds by $100 million (which is close to a 30% increase!) but reduces best practice funding to $20 per pupil (down from $50 in 2014-15) for those districts that can meet the new bifurcated requirements of finance and academics. In addition, performance funding 22j ($30/$30/$40 per pupil for 2014-15) has been eliminated for the coming school year! At first glance, it looks like those districts that currently qualify for best practice funding that are also receiving performance funding at any level, could be in for a shock as their specific “per pupil” increase could fall quite a bit short of the $75 mark! Here is the district-by-district details, which shows the true impact of the proposal on your district. You will notice the increased At-Risk funding and the increased MPSERS UAAL state share are included as per pupil increases, however this clouds the true per pupil funding change between the two years as these funds are restricted and are not available for “in the classroom” expenditures or to help cover district inflationary costs!
Here are some sectional highlights of interest:
Section 11r – Distressed District Rehabilitation Fund
Establishes the Maximum Foundation for a Public School Academy at $7,326.
Section 20f – Hold Harmless Provision
Section 21f – Best Practice Grants
Section 22f Best Practice Grants
2 of 3 Financial:
2 of 3 Academic:
Section 22i - Technology Infrastructure Readiness Grants
Section 22j – District Performance Funding
31a – At-Risk
Section 35a-35g – 3rd Grade Reading Initiatives
Section 61b – Career & Tech Ed / Dual Enrollment Programs
Section 81 – ISD General Operations
Section 102/103a/103b/103c – Fiscal Distress Early Warning System
147a – MPSERS Cost Offset
147c – MPSERS UAAL Rate Stabilization Payment
147d – MPSERS One-Time Liability Payment
Community College funding through the School Aid Fund will be $256+ million, an increase of $59 million from current year allocation.
University funding through the School Aid Fund will be $205+ million, an increase of $711,000 from the current year allocation.
For those that would like more information about the Governor’s proposal and the insight of the Senate and House Fiscal Agencies, both of our committee meetings this week will have representatives presenting on the topic. The ISD Committee will be held this Thursday, February 19 at 9:30 am at our offices in the MELG Building. Bethany Wicksall from the House Fiscal Agency will lead the discussion on the budget! On Friday, February 20, 9:30 am the School Finance Committee welcomes Kathryn Summers from the Senate Fiscal Agency to discuss the Governor’s proposal and initial implications. Both of these meetings can be joined via in person or on the web. Please see the linked agenda’s for connection instructions!
That’s it for now, but please stays tuned as more information will be coming! Don’t forget to check our link to the 2015-16 budget documents as we are updating continuously with additional reports as we receive them!
We will be keeping our eyes on the legislature as they move the budgets through both Chambers, the Proposal 15-1 ballot election on May 5, and finally the May Consensus Revenue Estimating Conference. There are still lots of hurdles to get over before schools adopt budgets before July 1! This is just the beginning of the long process.
David and Bob
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