FY 2017-18 SCHOOL AID BUDGET H.B. 4235 (CR-1)*: CONFERENCE REPORT
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$14,164,329,600 |
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Items Included by the Senate and House |
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1. MPSERS UAAL Rate Cap Increase Due to Lower Assumed Rate of Return (AROR). House and Senate increased the MPSERS unfunded actuarial accrued liabilities rate cap costs by $90.9 million above what the costs otherwise would have been, due to lowering the AROR on investments in the school retirement system, from 8.0% to 7.5% over two years. |
90,884,000 |
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2. MPSERS Normal Cost Increase Due to Lower AROR. House and Senate used one-time revenue to hold schools harmless from the increase in normal costs due to the proposal to lower the AROR on investments in the school retirement system over two years. |
48,969,000 |
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3. Integrated Behavior and Learning Support (MiBLSi). House and Senate increased this from $1,125,000 to $1,600,000 to continue implementing task for recommendations. |
475,000 |
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4. Year-Round Schools/Balanced Calendar. Governor proposed doubling the funding for year-round schools to expand to balanced calendar, from $1.5 million to $3.0 million. House and Senate maintained funding at $1.5 million. |
0 |
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5. MPSERS Rate Cap Technical Cost Savings (w/o Change to AROR). In the absence of the proposed reduction in the AROR, there would have been savings in the categorical that pays the cost for the unfunded accrued liabilities above the rate cap of 20.96% of payroll. |
(112,900,000) |
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6. Federal Grants. House and Senate reduced Federal grant appropriation authority. |
(91,689,200) |
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7. Technical Adjustments. House and Senate included cost adjustments in numerous lines. |
(51,500,000) |
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8. Flint Water Emergency. House and Senate concurred with Governor to reduce funding from $12.6 million to $8.7 million. |
(3,900,000) |
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9. Youth ChalleNGe. House and Senate reduced funding from $1.6 million to $1.5 million. |
(110,000) |
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10. College Readiness Outreach. House and Senate reduced funding from $3.05 million to $3.0 million by eliminating a $50,000 earmark for outreach on dual enrollment programming. |
(50,000) |
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11. Cyber Schools' Foundation Allowance 20% Reduction. Governor reduced cyber schools' foundation allowances 20% ($16.0 million). House and Senate did not concur. |
0 |
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12. Economic Adjustments. Includes $69,400 Gross and $42,800 GF/GP for economic adjustments. |
69,400 |
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Conference Agreement on Items of Difference |
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13. Foundation Allowance. Governor increased the foundation allowance between $50 and $100 per pupil, using the "2x" formula, which cost $128.0 million. On top of that, Senate used $100.0 million from Sec. 147a (MPSERS cost offset) to increase by another $38-$76 per pupil, for total per-pupil increases ranging between $88 and $176. House provided $100 across-the-board, at a cost of $143.0 million. Conference used "2x" formula to provide increases ranging between $60 and $120 per pupil, at a cost of $153.0 million. |
153,000,000 |
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14. At Risk. Governor increased $150.0 million and included all districts in funding and broadened pupil eligibility. Senate increased by $100.0 million, concurred in pupil eligibility changes, used a different funding formula, and increased school-based health centers $500,000. House increased by $129.1 million, concurred in pupil eligibility changes, and provided 50% funding to hold harmless districts. Conference increased $120.0 million, concurred in pupil eligibility changes, provided 30% funding to hold harmless districts, and added $500,000 for school-based health centers. |
120,511,800 |
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15. MPSERS Reforms Reserve Fund. Conference deposited $200.0 million GF/GP and $295.0 million SAF into a MPSERS Reforms Reserve Fund, which is not an appropriation, but creates a fund with GF/GP and SAF deposited into it for future use. |
0 |
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16. Program Increases. Conference increased bus driver safety $400,000, adult education pilot projects $2.0 million, advanced placement testing fee support for low-income students $500,000, FIRST robotics $300,000 to include nonpublic schools, $500,000 to reimburse ISDs for monitoring special education at PSAs, math and science centers $549,300 to fill a Federal funds reduction, and 10 Cents a Meal by $125,000. Conference also increased funding for a kindergarten entry observation tool ($815,000), Michigan Education Corps ($1.5 million), and bilingual education using a Wida assessment ($4.8 million). |
11,489,300 |
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17. New Programs. Governor proposed a declining enrollment categorical, funding for educator evaluations, school drinking water testing, and high school per-pupil payments. Conference did not include these items. Instead, Conference funded the following new programs: information technology certifications ($1.0 million), civics education ($60,000), competency education grants ($500,000), CTE counselors ($1.0 million), career preparation platform ($1.0 million), value- added growth analytics system ($2.5 million), online mathematics program ($1.0 million), and digital literacy preparation ($250,000). |
7,310,000 |
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18. CTE Equipment Upgrades. Governor increased funding for equipment upgrades in career and technical education programs by $16.8 million, to $20.0 million total. Conference increased to $7.0 million and distributed to career education planning districts. |
3,800,000 |
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19. Partnership Model Districts and School Reform Office/District Supplemental Funding under CEOs. Governor maintained $5.0 million funding for the SRO and supplemental funding to districts with schools under the oversight of a CEO. Governor also proposed a new $3.0 million program to assist districts identified to partner with other organizations to coordinate resources and improve student achievement. Conference funded the partnership model line with a $100 placeholder, and removed SRO/School CEO funding. |
(4,999,900) |
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20. Intermediate District Early Literacy Coaches. Conference doubled the funding for early literacy coaches at intermediate districts due to higher-than-anticipated costs. |
3,000,000 |
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21. MPSERS Cost Offset. Senate eliminated this categorical funding and used it to increase foundation allowance payments by $100.0 million. Conference retained the categorical. |
0 |
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22. Technology Regional Data Hubs. Governor proposed $2.2 million for a new program to integrate local data systems based on common standards, to provide for actionable use of data by districts and intermediate districts through common reports and dashboards and for efficiently providing information for reporting. Conference funded at $1.2 million. |
1,200,000 |
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23. Comprehensive Science, Technology, Engineering, and Math (STEM). Governor increased funding for competitive STEM grants from $1.0 million to $3.0 million. Conference increased by $1,850,000. In addition, Conference added $1.7 million for the transition from math/science centers to MiSTEM Network Regions. |
3,585,000 |
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24. Cybersecurity Competitions. Governor proposed grants to improve computer science skills by participating in events hosted by Merit Network or the Air Force, with funding for coaches and registration and travel fees. Conference did not include. |
0 |
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25. Center for Educational Performance and Information (CEPI) and Michigan Virtual University. Governor increased GF/GP funding for CEPI by $4.0 million to backfill Federal funds that had been supporting the Center via a work project, and which have now been expended. Conference did not include the increase. Governor maintained MVU's funding at $7,387,500; Conference reduced by $887,500 to $6.5 million. |
(887,500) |
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26. Program Eliminations and Reductions. Conference eliminated gang prevention and intervention grants ($3.0 million), consolidation innovation grants ($3.0 million), student transition grants in dissolved districts ($1.9 million), competency-based transcript ($500,000), Marshall's cooperative education grant ($300,000), Van Buren ISD's partnership grant with its health department ($250,000), and Science Olympiad ($250,000). Conference reduced CTE dual enrollment (by $1.0 million), Van Andel ($100,000) and the existing online algebra tool ($400,000). |
(10,660,000) |
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27. Cap Funding for Shared-Time Programs. Governor capped the amount of funding available for pupils in shared-time programs at $60.0 million, a $55.0 million reduction from the estimated FY 2016-17 spending level of $115.0 million. Conference restored all but $2.0 million of the Governor's reduction; Conference capped shared-time FTEs at 0.75 per pupil. |
(2,000,000) |
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$165,596,900 |
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FY 2017-18 Conference Report Ongoing/One-Time Gross Appropriation............................. |
$14,329,926,500 |
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Amount Over/(Under) GF/GP Target: $0 |
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Boilerplate Changes from FY 2016-17 Year-to-Date: |
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Conference Agreement on Items of Difference |
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1. Shared-Time FTE Cap. Senate capped the amount of an FTE that may be claimed by a district under shared-time programs at 0.75 FTE. House did not include a cap. Conference concurred with Senate. (Sec. 6(4)(ii)) |
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2. School Reform Office. Governor broadened the sections for which a chief executive officer may operate in schools to include Sections 391(3), 507(6), 528(6), or 561(6) of the Revised School Code. Senate did not include these additional sections, but did include work project language allowing any FY 2016-17 unexpended funds to carry forward. House did not include. Conference repealed the section. (Sec. 21) |
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3. Great Start Readiness Program (GSRP). Conference included GSRP workgroup recommendations that change the source of data for estimating need in each intermediate district, that require a calculation of statewide unmet need, and that would direct any additional funds to ISDs whose percentage served was less than the statewide average. Governor removed language allowing ISDs to offer services to children in families whose income was at or below 300% of the Federal poverty level (FPL) if there was no waiting list for kids served at 250% of FPL; Conference did not concur in this change and retained current law. Conference included language providing that funding to each ISD is the lesser of the previous number of children served or capacity. (Sections 32d, 39) |
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4. At Risk. Governor broadened both the districts eligible for At Risk (to include all districts) and the pupils eligible (to include those who are "economically disadvantaged"). Economically disadvantaged would include students eligible for free or reduced-price meals, those whose families are receiving supplemental nutrition or TANF assistance, those who are homeless or migrant, and those who are in foster care. (Current law only counts students eligible for free meals.) In addition, Governor changed the payment calculation from 11.5% of a district's foundation allowance to 11.5% of the statewide average (with districts above the basic capped at the basic for this calculation). Also, Governor required districts to use the funds to address chronic absenteeism, ensuring that economically disadvantaged students do not score worse as a group than non-disadvantaged students on English language arts and math assessments, and ensuring that at least 65% of high school pupils take CTE, advanced placement, or international baccalaureate classes. Other language changes allow districts to use up to 5% for professional development on multi-tiered systems of supports, require MDE to calculate reports on the top 30%/bottom 30% of math and English language arts exams, and replace the formula triggered for mandatory spending in certain categories with a different process and metrics. Conference concurred in expanding the definition of 'at risk' to include 'economically disadvantaged' - this increases the number of eligible children statewide from roughly 595,000 to roughly 678,000. Conference concurred in the change of the payment calculation. Conference concurred to include those districts not currently receiving At Risk funding (e.g., hold harmless districts), but at 30% of what a currently-eligible district will receive. Conference did not include much of the Governor's proposed structural changes to the uses of the program, but did include language allowing districts to use up to 3% for professional development. (Sec. 31a) |
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5. Special Education - Enrolling Non-Resident Pupils. Senate included changes to existing subsections (14) and (15) that pertain to public school academies, including cyber schools, enrolling students from outside the intermediate district in which the PSA is located. Conference tweaked the language included in the Senate bill, and provided funding to MDE to reimburse ISDs for additional compliance requirements. (Sec. 51a) |
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6. CTE Equipment Upgrades. Governor increased funding and restructured the formulaic program to be a competitive grant program. Senate increased funding and retained formulaic distribution, although for a broader set of allowable uses, including training on new equipment and professional development for computer science and coding. Conference concurred with the Senate. (Sec. 61c) |
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7. Math and Science Education. Governor restructured funding for the 33 existing math and science centers, replacing them with a network of ten regional MiSTEM centers aligned with prosperity regions. Senate retained current law and current structure of math and science centers. Conference significantly restructured this section to provide a transition between the existing math and science center network to the new MiSTEM regions. (Sec. 99s) |
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8. Assessments. Conference included new language directing the Department of Education to issue an RFP for a statewide summative assessment for grades 3 to 7 in math and ELA, and also to issue an RFP for not less than three benchmark assessments. (Sec. 104c) |
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9. Adult Education. Senate and Conference delayed by one year the phase-in of the new funding formula. (Sec. 107) |
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10. MPSERS Reforms Reserve Fund. Conference established this Fund and deposited $200.0 million GF/GP and $295.0 million SAF into the Fund to pay for increased costs to pension systems associated with SB 401/HB 4647. (Sec. 147e) |
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11. Labor Day Waiver Hearing. Senate required a district seeking a waiver to begin school before Labor Day hold a public hearing in the district with the Michigan Department of Education. Conference concurred. (Sec. 160) |
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12. Legal Action against State. House included language establishing a penalty if a district or ISD uses State funding to pay for an expense related to a lawsuit against the State. Conference concurred. (Sec. 164g) |
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13. Collective Bargaining Agreement Penalty. House included language establishing a 5% penalty if a district or ISD enters into a collective bargaining agreement that is in violation of specific sections of law. Conference concurred. (Sec. 164h) |
Date Completed: 6-8-17 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.