Summary: Executive Budget Recommendation

Summary: CONFERENCE REPORT

SCHOOL AID: SB 1069 (CR-1)

FY 2004-05

Analyst: Mary Ann Cleary

Laurie Cummings

	FY 2003-04 YTD (as of 2/12/04)					*Difference: Conference from FY 2003-04 YTD*
	FY 2003-04 YTD (as of 2/12/04)	Executive	Senate	House Floor	Conference	*Amount*	%
IDG/IDT	$0	$0	$0	$0	$0	$0	0.0
Federal	1,316,681,900	1,314,388,000	1,314,388,000	1,353,539,800	1,353,540,100	36,858,200	2.8
Local	0	0	0	0	0 0	0	0.0
Private	0	0	0	0	0	0	0.0
Restricted	10,731,587,100	11,033,722,200	11,033,722,200	11,038,650,000	11,008,700,000	277,112,900	2.6
GF/GP	327,700,000	131,800,000	138,600,000	137,907,700	165,200,000	(162,500,000)	(49.6)
Gross	$12,375,969,000	$12,479,910,200	$12,486,710,200	$12,530,097,500	$12,527,440,100	*151,474,100*	*1.2*
FTEs	0.0	0.0	0.0	0.0	0.0	0.0	0.0

NOTES:

1) FY 2003-04 YTD number does include the $131 million reduction for proration.

2) FY 2003-04 YTD number is reduced $50.7 million to reflect savings from additional local property tax audits and homestead exemption audits.

Overview

The School Aid budget makes appropriations to the state’s 554 local school districts, 191 public school academies, and 57 intermediate school districts for operations and certain categorical programs. It also appropriates funds to the Center for Education Performance, Department of Labor and Economic Growth, and other entities to implement certain grants and other programs related to K-12 education.

Summary of FY 2004-05 Major Budget Issues

Foundation Allowances

Per-pupil foundation allowances, which are used to support day-to-day school operations, were recommended to remain at the FY 2003-04 levels.

Revenue Sources

The Conference Report reduces the general fund contribution from $327.5 million to $165.2 million. The recommendation assumes a savings of $50.6 million from increased personal property tax audits and homestead exemptions audits and $14.8 million in additional lottery revenue and tobacco taxes.

Membership Blend

The membership blend, used to calculate districts’ foundation allowance payments, would change under the proposal. The pupil membership blend would change from 80% of the current fall pupil count plus 20% of the previous February count to 75% of the current fall pupil count plus 25% of the previous February count.

Retirement Rate

The payroll contribution rate that districts are required to pay for employee retirement would be 14.87%. This is 1.4% less than the actual level set by the retirement board, saving districts an estimated $138 million.

Funding for Intermediate School Districts (ISDs)

The ISD general operations funding are reduced by $14.0 million to $77.7 million.

Section 20J Allocations to Hold Harmless Districts

The Conference report maintains funding at the FY 2004 level.

Major Budget Changes from FY 2003-04:	FY 2003-04 YTD (as of 2/12/04)	Conference Change
*1. School Bond Redemption Fund* The Executive adds $12.8 million to cover the anticipated costs for school bond loans to school districts. The Senate concurs with the Executive. The House concurs with the Senate and makes a $100 item of difference. The Conference concurs with the Executive, Senate and House.	Gross GF/GP	$28,300,000 $28,300,000	$12,800,000 $12,800,000
*2. Proposal A Obligation Payment* The Executive reduces the appropriation by $100.3 million from current law to reflect changes in pupil estimates, taxable values, anticipated savings due to personal property tax audits, the reduction of $6.6 million in section 20j allocations and the change in the membership blend to a 50/50. The Senate does not concur with the Executive on the membership blend or section 20j allocation change. The House concurs with the Senate, makes adjustments for revised pupil estimates and reduces the estimated savings from personal property tax audits by $7 million. The Conference reduces the appropriation by $86.3 million to reflect changes in pupil estimates, taxable values, savings from property tax audits, and changes in the pupil blend to 75/25.	Gross Restricted	$6,765,300,000 6,765,300,000	($86,322,200) (86,322,200)
*3. Discretionary Payment* The Executive increases the appropriation by $28 million from current law to reflect changes in membership blends and the elimination of $6 million for declining enrollment districts. Also included was $1 million for consolidation of school districts. The Senate increases the appropriation by $33 million to maintain the 80/20 membership blend, retains funding for declining enrollment districts, and eliminates $15 million for Detroit. Does not include funding for consolidation grants. The House concurs with the Senate and adds $100 for a reform board district and for consolidation grants. The House also makes foundation adjustments to districts that lost a 1993 millage override or levied 1.9 debt mills to finance an operating deficit in 1993. The Conference increases the appropriation by $31.7 million to reflect changes in membership blends and taxable value estimates.	Gross Restricted	$2,872,000,000 2,872,000,000	$38,300,000 38,300,000
*4. Renaissance Zone Reimbursement* The Executive adds $6.2 million for the estimated costs associated with Renaissance Zones. This allocation is to reimburse school districts, ISDs and state education tax for property tax losses associated with the Zones. The Senate concurs with the Executive. The House concurs with the Senate and adds $137,200 for the refund of state education taxes paid by a bankrupt business and for interest payments from a Hitachi tax settlement. The Conference concurs with the Executive and Senate.	Gross Restricted	$29,960,000 29,960,000	$6,240,000 6,240,000
*5. At-Risk Program* The Executive recommends no change to the program. The Senate reduces funding by $9.9 million to $304.3 million. The House concurs with the Executive. The Conference concurs with the Executive and House.	Gross Restricted	$314,200,000 314,200,000	$0 0
*6. School Readiness Grants* The Executive recommends no change to this program. The Senate reduces funding in this program by $2 million to $70.8 million. The House concurs with the Senate and makes a $100 item of difference. The Conference concurs with the Executive.	Gross Restricted	$72,800,000 72,800,000	$0 0
*7. ISD 0-5 Parenting Grants* The Executive appropriates an additional $6.7 million for this program to help parents of children aged five and under ready their children to enter school. The additional funding for this program is from reduced appropriations to ISD general operations funding. The Senate maintains current law funding level at $3.3 million. The House transfers the $3.3 million to section 81 (ISD general operations), but maintains all other requirements of the section. Allows ISDs to use private or local funds to meet the 3.5% minimum spending requirement. The Conference concurs with the House.	Gross Restricted	$3,326,000 3,326,000	$0 0
*8. Vocational Education* The Executive recommends no change to this program. The Senate reduces funding by $2 million to $28 million. The House concurs with the Senate and makes a $100 item of difference. The Conference concurs with the Executive.	Gross Restricted	$30,000,000 30,000,000	$0 0
*9. ISD Learn to Earn Centers – Planning Grants* The Executive recommends a new program at $1 million for planning grants to ISDs for centers that will focus on career preparation activities for students who have dropped out of school. The Senate and House do not include this program. The Conference concurs with the Senate and House.	Gross Restricted	N/A N/A	$0 0
*10. ISD General Operations* The Executive reduces funding by $7.7 million from $91.7 million to $84 million. From this reduction, $6.7 million is transferred to the ISD 0-5 parenting grants and $1 million to the ISD Learn to Earn Centers. The Senate reduces funding to ISDs by $12.5 million to $79.2 million. The House reduces the general operations funding by $12 million and also transfers in $3.3 million from ISD 0-5 program and requires ISDs to run the program in section 32j in order to receive funding under this section. Allows $100,000 of the funds to be used to develop a model pilot program for consolidation of services between ISDs. The Conference reduces ISD operations by $14 million and concurs with the House to transfer in the funding for ISD 0-5 parenting grants at $3.3 million.	Gross Restricted	$91,702,100 91,702,100	($14,000,000) (14,000,000)
*11. Center for Education Performance and Information* The Executive reduces the appropriation by $3 million to match the actual expenditure level for FY 2004. The Senate concurs with the Executive funding level and added language requiring CEPI to provide a website similar to the former Standard & Poors site. The House concurs with the Executive. The Conference concurs with the Executive.	Gross Federal GF/GP	$6,857,600 2,357,600 4,500,000	($3,311,300) (311,300) (3,000,000)
*12. Freedom to Learn Grants* The Executive appropriates $5 million to continue to purchase wireless technology for 6^th grade pupils; this is a reduction of $17 million from the FY 2004 appropriation level. Maintains the federal funds at $17.3 million. The Senate concurs with the Executive but limited the maximum award a district can receive to 25% of the total available funds. The House concurs with the Senate funding level, makes $100 item of difference, and adds language to allow 6^th grade teachers to be eligible for a laptop grant. The Conference appropriates $3.7 million in school aid funds, maintains the federal appropriations, and concurs with the House on the language changes.	Gross Federal Restricted	$39,343,200 17,343,200 22,000,000	($18,300,000) 0 (18,300,000)

Major Budget Changes from FY 2003-04:

FY 2003-04 YTD (as of 2/12/04)

Conference

Change

1. School Bond Redemption Fund

The Executive adds $12.8 million to cover the anticipated costs for school bond loans to school districts. The Senate concurs with the Executive. The House concurs with the Senate and makes a $100 item of difference. The Conference concurs with the Executive, Senate and House.

Gross

GF/GP

$28,300,000

$28,300,000

$12,800,000

$12,800,000

2. Proposal A Obligation Payment

The Executive reduces the appropriation by $100.3 million from current law to reflect changes in pupil estimates, taxable values, anticipated savings due to personal property tax audits, the reduction of $6.6 million in section 20j allocations and the change in the membership blend to a 50/50. The Senate does not concur with the Executive on the membership blend or section 20j allocation change. The House concurs with the Senate, makes adjustments for revised pupil estimates and reduces the estimated savings from personal property tax audits by $7 million. The Conference reduces the appropriation by $86.3 million to reflect changes in pupil estimates, taxable values, savings from property tax audits, and changes in the pupil blend to 75/25.

Gross

Restricted

$6,765,300,000

6,765,300,000

($86,322,200)

(86,322,200)

3. Discretionary Payment

The Executive increases the appropriation by $28 million from current law to reflect changes in membership blends and the elimination of $6 million for declining enrollment districts. Also included was $1 million for consolidation of school districts. The Senate increases the appropriation by $33 million to maintain the 80/20 membership blend, retains funding for declining enrollment districts, and eliminates $15 million for Detroit. Does not include funding for consolidation grants. The House concurs with the Senate and adds $100 for a reform board district and for consolidation grants. The House also makes foundation adjustments to districts that lost a 1993 millage override or levied 1.9 debt mills to finance an operating deficit in 1993. The Conference increases the appropriation by $31.7 million to reflect changes in membership blends and taxable value estimates.

Gross

Restricted

$2,872,000,000

2,872,000,000

$38,300,000

38,300,000

4. Renaissance Zone Reimbursement

The Executive adds $6.2 million for the estimated costs associated with Renaissance Zones. This allocation is to reimburse school districts, ISDs and state education tax for property tax losses associated with the Zones. The Senate concurs with the Executive. The House concurs with the Senate and adds $137,200 for the refund of state education taxes paid by a bankrupt business and for interest payments from a Hitachi tax settlement. The Conference concurs with the Executive and Senate.

Gross

Restricted

$29,960,000

29,960,000

$6,240,000

6,240,000

5. At-Risk Program

The Executive recommends no change to the program. The Senate reduces funding by $9.9 million to $304.3 million. The House concurs with the Executive. The Conference concurs with the Executive and House.

Gross

Restricted

$314,200,000

314,200,000

6. School Readiness Grants

The Executive recommends no change to this program. The Senate reduces funding in this program by $2 million to $70.8 million. The House concurs with the Senate and makes a $100 item of difference. The Conference concurs with the Executive.

Gross

Restricted

$72,800,000

72,800,000

7. ISD 0-5 Parenting Grants

The Executive appropriates an additional $6.7 million for this program to help parents of children aged five and under ready their children to enter school. The additional funding for this program is from reduced appropriations to ISD general operations funding. The Senate maintains current law funding level at $3.3 million. The House transfers the $3.3 million to section 81 (ISD general operations), but maintains all other requirements of the section. Allows ISDs to use private or local funds to meet the 3.5% minimum spending requirement. The Conference concurs with the House.

Gross

Restricted

$3,326,000

3,326,000

8. Vocational Education

The Executive recommends no change to this program. The Senate reduces funding by $2 million to $28 million. The House concurs with the Senate and makes a $100 item of difference. The Conference concurs with the Executive.

Gross

Restricted

$30,000,000

30,000,000

9. ISD Learn to Earn Centers – Planning Grants

The Executive recommends a new program at $1 million for planning grants to ISDs for centers that will focus on career preparation activities for students who have dropped out of school. The Senate and House do not include this program. The Conference concurs with the Senate and House.

Gross

Restricted

N/A

10. ISD General Operations

The Executive reduces funding by $7.7 million from $91.7 million to $84 million. From this reduction, $6.7 million is transferred to the ISD 0-5 parenting grants and $1 million to the ISD Learn to Earn Centers. The Senate reduces funding to ISDs by $12.5 million to $79.2 million. The House reduces the general operations funding by $12 million and also transfers in $3.3 million from ISD 0-5 program and requires ISDs to run the program in section 32j in order to receive funding under this section. Allows $100,000 of the funds to be used to develop a model pilot program for consolidation of services between ISDs. The Conference reduces ISD operations by $14 million and concurs with the House to transfer in the funding for ISD 0-5 parenting grants at $3.3 million.

Gross

Restricted

$91,702,100

91,702,100

($14,000,000)

(14,000,000)

11. Center for Education Performance and Information

The Executive reduces the appropriation by $3 million to match the actual expenditure level for FY 2004. The Senate concurs with the Executive funding level and added language requiring CEPI to provide a website similar to the former Standard & Poors site. The House concurs with the Executive. The Conference concurs with the Executive.

Gross

Federal

GF/GP

$6,857,600

2,357,600

4,500,000

($3,311,300)

(311,300)

(3,000,000)

12. Freedom to Learn Grants

The Executive appropriates $5 million to continue to purchase wireless technology for 6^th grade pupils; this is a reduction of $17 million from the FY 2004 appropriation level. Maintains the federal funds at $17.3 million. The Senate concurs with the Executive but limited the maximum award a district can receive to 25% of the total available funds. The House concurs with the Senate funding level, makes $100 item of difference, and adds language to allow 6^th grade teachers to be eligible for a laptop grant. The Conference appropriates $3.7 million in school aid funds, maintains the federal appropriations, and concurs with the House on the language changes.

Gross

Federal

Restricted

$39,343,200

17,343,200

22,000,000

($18,300,000)

(18,300,000)

Major Boilerplate Changes from FY 2003-04:
*Sec. 6(4). Membership Blend* The Executive recommends changing the membership blend upon which foundation allowance payments are based from an “80/20” blend--a sum of 80% of the current fall pupil count plus 20% of the previous February’s count--to a “50/50” pupil membership blend, which is the sum of 50% of the current fall pupil count plus 50% of the previous February’s count. This change would result in an estimated $43 million cost savings to the state. The Senate and House retain current law. The Conference report creates a “75/25” pupil membership blend, resulting in a savings of $8 million.
*Sec. 11(1). Revenue Sources/Cost Savings* The Executive assumes $35.2 million in new revenue from increased tax collections and a liquor mark-up. The proposal also includes ongoing cost savings as a result of Homestead Exemption Audits of $26.8 million and Personal Property Tax Audits of $24.5 million. The Senate concurs with the Executive. The House assumes $35.5 million in new tax collection enforcement revenues and $42.75 million in additional casino revenues. The House includes the Homestead Exemption Audit estimate at $26.8 million and Personal Property Tax Audits at $17 million. The Conference assumes $50.3 million in new revenue from increased tax collections, lottery advertisement, and additional tobacco tax revenue. The report also includes ongoing cost savings as a result of Homestead Exemption Audits of $26.8 million and Personal Property Tax Audits of $24.5 million.
*Sec. 11(4). Proration Language* The Executive recommends adding sections 11j (School Bond Loan program), 26a (Renaissance Zone Reimbursement), 51a(12) (Special Education juvenile detention foundations) and 53a (Special Education court placed pupils) as protected sections from proration. The Senate concurs with the Executive and adds section 56 (special education millage equalization) as a protected section for proration. The House concurs with the Senate changes and exempts districts that are in receivership from any future proration. The Conference concurs with the House.
*Sec. 11(6). Intent Language* The Conference adds intent language to restore the 80/20 pupil membership blend and to restore ISD funding to FY 2004 appropriation levels if additional revenues are estimated to be available at the May 2005 Revenue Conference.
*Sec. 11b. General Fund Transfers to School Aid Stabilization Fund* The Executive recommends transferring $5 million from the General Fund to the School Aid Stabilization Fund for the Freedom to Learn Program under Sec. 98b. The Senate and House concur with the Executive. The Conference transfers $3.7 million to the Freedom to Learn Program.
*Sec. 20(1). Basic Foundation Allowance* The Executive retains per-pupil foundation allowances at the same level as FY 2003-04 prior to proration. The Senate and House concur with the Executive. The Conference concurs with the Executive, Senate and House.
*Sec. 20(20). Reform Board Allocation* The Senate eliminated the $15 million in funding for a district with a reform board. The House revised the amount to $100 and adds language to eliminate the payments 60 days after an election that causes a reform board to cease. The Conference maintains current law and includes funding of $15 million for a reform board district.
*Sec. 20(21). Millage Override Allocation* The House adds new language adjusting the foundation allowance for a district with a loss of millage of 4.38 mills in 1993. The Conference does not include this language.
*Sec. 20(22). Operating Millage Allocation* The House adds new language adjusting the foundation allowance of a district that levied 1.9 mills in 1993 to finance an operating deficit. The Conference does not include this language.
*Sec. 20J. Hold Harmless Districts* The Executive reduces section 20j allocation to hold harmless districts that have a per pupil foundation allowance over $9,000 by $74 per pupil, for a savings of $6.6 million. The Senate and House retain current law. The Conference concurs with the Senate and House.
*Sec. 20L. School District Consolidation* The Executive adds a new section that gives consolidating or annexed districts an additional $25 per pupil. No consolidated or annexed district could receive more than $500,000. The Senate does not include this section. The House concurs with the Executive language and appropriates $100. The Conference concurs with the Senate.
*Sec. 22D. Isolated School Districts* The House adds new language that would allocate funds to small, rural and Upper Peninsula or island districts to ensure they receive a minimum funding level. The total allocation is $1 million. The Conference concurs with the House to include it, but appropriates $750,000.
*Sec. 31a. At-Risk Program* The Conference adds new language to allow qualifying districts to use up to 10% of their funds for school security.
*Sec. 101. Days and Hours of Instruction* The Senate adds language allowing for an additional 30 hours exemption for “extenuating circumstances” that occur after April 1^st of the year. The House does not concur with this change. The Conference concurs with the Senate but adds additional language requiring the Superintendent of Public Instruction to approve any additional hours.
*Sec. 107. Adult Education Program Requirements and Payments* The Executive adds new requirements for adult education programs, to develop individual student plans and use research-based methods. Changes the payment calculation from one based 90% on the number of participants in a program and 10% on the progress of students in the program, to one based 80% on enrollment and 20% on progress. The Senate concurs on the payment change and did not include the new program requirements. The House concurs with the Executive on developing individual student plans and using research-based methods, but does not concur on the change in payment calculation. The Conference concurs Senate on not including the new program requirements and maintains funding on a 90/10 basis.
*Sec. 107b. Adult Learning Pilot Programs* The Executive authorizes the Department of Labor and Economic Growth to implement a pilot adult learning system in two Michigan Works! regions. Does not authorize a specific amount of funding for the pilots, but specifies that funding that would otherwise be allocated to adult education providers within the two Michigan Works! regions would instead be allocated to the pilot programs. The Senate does not include this section. The House concurs with the Executive on the language but only allows for one pilot program. The Conference concurs to allow two pilot projects which would start in FY 2006 and to establish an advisory committee to review and make funding requirements.
*Sec. 146. Health Benefits Feasibility Study* The Senate adds new language requiring a feasibility study to determine if there are cost savings to districts, ISDs, community colleges, and state universities for implementing a statewide purchasing pool for school employee health benefits or including these employees in the state employee group health plans. The House concurs with the Senate but replaces the Department of Education with the Office of Financial and Insurance Services as a participant in the study. The Conference does not include the study.
*Sec. 147. MPSERS Contribution Subsidy* The Executive proposes to reduce the estimated percentage of payroll that districts must allocate for public school employee retirement from 16.27% to 14.87%, saving districts an estimated $138 million. The Senate and House concur with the Executive. The Conference concurs with the Executive, Senate and House.

Major Boilerplate Changes from FY 2003-04:

Sec. 6(4). Membership Blend

The Executive recommends changing the membership blend upon which foundation allowance payments are based from an “80/20” blend--a sum of 80% of the current fall pupil count plus 20% of the previous February’s count--to a “50/50” pupil membership blend, which is the sum of 50% of the current fall pupil count plus 50% of the previous February’s count. This change would result in an estimated $43 million cost savings to the state. The Senate and House retain current law. The Conference report creates a “75/25” pupil membership blend, resulting in a savings of $8 million.

Sec. 11(1). Revenue Sources/Cost Savings

The Executive assumes $35.2 million in new revenue from increased tax collections and a liquor mark-up. The proposal also includes ongoing cost savings as a result of Homestead Exemption Audits of $26.8 million and Personal Property Tax Audits of $24.5 million. The Senate concurs with the Executive. The House assumes $35.5 million in new tax collection enforcement revenues and $42.75 million in additional casino revenues. The House includes the Homestead Exemption Audit estimate at $26.8 million and Personal Property Tax Audits at $17 million. The Conference assumes $50.3 million in new revenue from increased tax collections, lottery advertisement, and additional tobacco tax revenue. The report also includes ongoing cost savings as a result of Homestead Exemption Audits of $26.8 million and Personal Property Tax Audits of $24.5 million.

Sec. 11(4). Proration Language

The Executive recommends adding sections 11j (School Bond Loan program), 26a (Renaissance Zone Reimbursement), 51a(12) (Special Education juvenile detention foundations) and 53a (Special Education court placed pupils) as protected sections from proration. The Senate concurs with the Executive and adds section 56 (special education millage equalization) as a protected section for proration. The House concurs with the Senate changes and exempts districts that are in receivership from any future proration. The Conference concurs with the House.

Sec. 11(6). Intent Language

The Conference adds intent language to restore the 80/20 pupil membership blend and to restore ISD funding to FY 2004 appropriation levels if additional revenues are estimated to be available at the May 2005 Revenue Conference.

Sec. 11b. General Fund Transfers to School Aid Stabilization Fund

The Executive recommends transferring $5 million from the General Fund to the School Aid Stabilization Fund for the Freedom to Learn Program under Sec. 98b. The Senate and House concur with the Executive. The Conference transfers $3.7 million to the Freedom to Learn Program.

Sec. 20(1). Basic Foundation Allowance

The Executive retains per-pupil foundation allowances at the same level as FY 2003-04 prior to proration. The Senate and House concur with the Executive. The Conference concurs with the Executive, Senate and House.

Sec. 20(20). Reform Board Allocation

The Senate eliminated the $15 million in funding for a district with a reform board. The House revised the amount to $100 and adds language to eliminate the payments 60 days after an election that causes a reform board to cease. The Conference maintains current law and includes funding of $15 million for a reform board district.

Sec. 20(21). Millage Override Allocation

The House adds new language adjusting the foundation allowance for a district with a loss of millage of 4.38 mills in 1993. The Conference does not include this language.

Sec. 20(22). Operating Millage Allocation

The House adds new language adjusting the foundation allowance of a district that levied 1.9 mills in 1993 to finance an operating deficit. The Conference does not include this language.

Sec. 20J. Hold Harmless Districts

The Executive reduces section 20j allocation to hold harmless districts that have a per pupil foundation allowance over $9,000 by $74 per pupil, for a savings of $6.6 million. The Senate and House retain current law. The Conference concurs with the Senate and House.

Sec. 20L. School District Consolidation

The Executive adds a new section that gives consolidating or annexed districts an additional $25 per pupil. No consolidated or annexed district could receive more than $500,000. The Senate does not include this section. The House concurs with the Executive language and appropriates $100. The Conference concurs with the Senate.

Sec. 22D. Isolated School Districts

The House adds new language that would allocate funds to small, rural and Upper Peninsula or island districts to ensure they receive a minimum funding level. The total allocation is $1 million. The Conference concurs with the House to include it, but appropriates $750,000.

Sec. 31a. At-Risk Program

The Conference adds new language to allow qualifying districts to use up to 10% of their funds for school security.

Sec. 101. Days and Hours of Instruction

The Senate adds language allowing for an additional 30 hours exemption for “extenuating circumstances” that occur after April 1^st of the year. The House does not concur with this change. The Conference concurs with the Senate but adds additional language requiring the Superintendent of Public Instruction to approve any additional hours.

Sec. 107. Adult Education Program Requirements and Payments

The Executive adds new requirements for adult education programs, to develop individual student plans and use research-based methods. Changes the payment calculation from one based 90% on the number of participants in a program and 10% on the progress of students in the program, to one based 80% on enrollment and 20% on progress. The Senate concurs on the payment change and did not include the new program requirements. The House concurs with the Executive on developing individual student plans and using research-based methods, but does not concur on the change in payment calculation. The Conference concurs Senate on not including the new program requirements and maintains funding on a 90/10 basis.

Sec. 107b. Adult Learning Pilot Programs

The Executive authorizes the Department of Labor and Economic Growth to implement a pilot adult learning system in two Michigan Works! regions. Does not authorize a specific amount of funding for the pilots, but specifies that funding that would otherwise be allocated to adult education providers within the two Michigan Works! regions would instead be allocated to the pilot programs. The Senate does not include this section. The House concurs with the Executive on the language but only allows for one pilot program. The Conference concurs to allow two pilot projects which would start in FY 2006 and to establish an advisory committee to review and make funding requirements.

Sec. 146. Health Benefits Feasibility Study

The Senate adds new language requiring a feasibility study to determine if there are cost savings to districts, ISDs, community colleges, and state universities for implementing a statewide purchasing pool for school employee health benefits or including these employees in the state employee group health plans. The House concurs with the Senate but replaces the Department of Education with the Office of Financial and Insurance Services as a participant in the study. The Conference does not include the study.

Sec. 147. MPSERS Contribution Subsidy

The Executive proposes to reduce the estimated percentage of payroll that districts must allocate for public school employee retirement from 16.27% to 14.87%, saving districts an estimated $138 million. The Senate and House concur with the Executive. The Conference concurs with the Executive, Senate and House.