March 20, 2018

Senate Subcommittee 2018-19 School Aid Budget Released

This morning, the Senate K-12 Appropriations Subcommittee for K-12 School Aid released its version of the FY 2018-19 School Aid Budget. Senate Bill 863 is slightly different from the Governor’s recommendation and holds the line on a significant increase to foundation allowances and lessens the blow to districts providing shared time services or cyber schools. It addresses some of the issues we were concerned about and includes added funding to sections that haven’t seen increases in years.

Senate Bill 863 includes:

    • Foundation allowance $115 - $230 per pupil using 2x formula
      • Transfers $400 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. (Sections 22a, 22b, and new 22p)
      • Transfers additional General Fund dollars to cover lost savings from the Governor’s shared time and cyber reductions that were rejected

    • Shared time FTE capped at .67 of an FTE, down from the current .75 FTE

    • Shared time kindergarten eliminated

    • Cyber Schools foundation allowance not limited

    • Section 31a At-Risk – Governor’s proposed language changes not included, but it was noted that conversations around this topic will continue throughout in the budget process

    • Special Education Millage Equalization funding increase included
        • Limits Wayne RESA’s increase to 2.5%

    • Increased funding for isolated districts transportation costs
        • Qualifying districts now would need to meet 7.7 or fewer pupils per square mile (increase from 7.3)
        • Per pupil grant for qualifying districts would increase to approximately $50

    • CTE per pupil incentive eliminated and funds moved to the those career education planning districts (CEPDs) without local millage to support CTE, with at least half of the funding required to be spent on equipment

    • ISDs to receive a 1% increase in operating funds (Section 81)

    • Restores Section 102d data analytical tools funding

    • Increases funding to Adult Education Section 107 including adding hold harmless and moving pilot projects to ongoing statewide programs

    • MPSERS Sections 147a remains intact with an additional $5 million added specifically for ISD’s, which will be about 45% of the costs offset that districts and participating PSA currently receive

    • All other MPSERS allocations funded at or above current year amounts, with the exception of the current year 147c2 One Time MPSERS Retirement Incentive Payment, which is eliminated as expected

    • Many other changes, so if you are looking for specific sections, we recommend reviewing the Full Text or the Section by Section information linked below

The total cost of the Senate K-12 Appropriation Subcommittee’s proposal comes in at $96.6 million above the Governor’s plan and is mostly comprised of an increase in the general fund transfer by $90 million and adjustments in other line items. We have posted all of the documents on our webpage for the FY2018-19 School Aid Budget, including:

This is the next step in the process. The House has indicated it will release their version in a couple weeks. For now, it seems the level of foundation allowance increase we saw in the Governor’s plan is holding strong, but the May Revenue Consensus Estimating Conference (CREC) will shed more light on the additional funds needed to secure the higher foundation allowance.

We will continue to review and monitor the progression of the school aid budget legislation.

David and Bob

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