|February 12, 2016
Governor Released His Budget This Week
The Governor released his budget this week and we were fairly pleased with our initial look. But we are always cautious and careful to not put much stock in the initial press releases because we know the devil is often in the details. What the Governor many times gives in one section, he takes away other funding somewhere else. The state is facing many fiscal challenges that could have negatively impacted the School Aid budget. This time, though, there appears to be no huge red flags.
If you recall, the School Aid Fund (SAF) came out of the Consensus Revenue Estimating Conference (CREC) in fair shape. While there was no huge hole to fill, there was no real money for any significant foundation allowance increase. Then there were the potential negatives:
There is good news in this budget. Our fears of DPS, Flint and the roads affecting the SAF significantly, appear to be just fears at this time. In fact, the state increased its GF transfer into the SAF by $184.1 million to bring up the transfer to $230 million, allowing a proposed foundation allowance increase of between $60 and $120 per pupil for 2016-17. There is some caution we should use because it appears that there is some one-time revenue dollars that will not be there in 2017-18.
As we usually say at this point in the year, you need to remember that the Governor’s proposed budget is the first indication of funding and budget priority for the coming school year. Although the intent can be clearly seen, the fact is, this is just the start and the budget will change! The Senate and House will offer their budget proposals in the coming weeks, potentially using many of the Governor’s ideas, or they may be quite different. Time will tell as the process unfolds, but be assured that we will keep our eyes and ears open as we take part in the various meetings that discuss the budget in detail.
For those that would like more information about the Governor’s proposal and the insight of the House Fiscal Agency, the ISD Committee will be held this Thursday, February 18, 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! You don’t have to be from an ISD to attend.
That’s it for now, but please stay tuned, as more information will be coming! Don’t forget to check our link to the 2016-17 budget documents. We have posted many budget related documents already and will update 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 and finally, the May Consensus Revenue Estimating Conference. There are still lots of hurdles to get over before schools adopt budgets prior to July 1! This is just the beginning of the long process.
We are including some of the detail from the proposed School Aid bill below. There are many other changes and if you know of certain sections of funding that your district receives but is not listed, you should take a look at the full text of the bill to be sure how the language may have changed and might affect your district.
David and Bob
2015-16 Executive Budget
Increases GF transfer to SAF to $230 million (last year $45.9 million)
Sec. 18(5) &(10)
The minimum foundation allowance for 2016-17 will be $7,511, an increase of $120.
Community College subsidy from the SAF increased to $256.7 million, an increase of $3.7 million.
University subsidy from the SAF increased to $237.1 million, an increase of $31.9 million.
The Detroit Public Schools turnaround plan funding is proposed to come from the tobacco settlement funds of $72 million per year over 10 years to offset the loss of the 18 mills revenue in the School Aid Fund.
You received this e-mail as a member of MSBO. MSBO is a professional organization that provides programs and services to those in school business. MSBO promotes the highest standards of school business management practices and provides professional growth opportunities to achieve the most effective use of resources in the education of children.
Please do not click "Reply" to this e-mail. For any questions or concerns, please write to MSBO at: email@example.com.
© 2016 MSBO, 1001 Centennial Way, Suite 200
Lansing, Michigan 48917 • Ph: 517.327.5920 • Fax: 517.327.0768