HB4232: CONFERENCE REPORT (Date Completed: 9-18-19) - FY 2019-20 DEPARTMENT OF EDUCATION BUDGET

FY 2019-20 DEPARTMENT OF EDUCATION BUDGET H.B. 4232 (CR-1): CONFERENCE REPORT

			CHANGES FROM FY 2018-19 YEAR-TO-DATE
FULL-TIME EQUATED (FTE) CLASSIFIED POSITIONS/FUNDING SOURCE	FY 2018-19 YEAR-TO-DATE*	FY 2019-20 CONFERENCE	AMOUNT	PERCENT
FTE Positions..............................................................	614.5	614.5	0.0	0.0
GROSS..........................................................................	406,134,900	419,794,500	13,659,600	3.4
Less:
Interdepartmental Grants Received.........................	0	0	0	0.0
ADJUSTED GROSS....................................................	406,134,900	419,794,500	13,659,600	3.4
Less:
Federal Funds...........................................................	298,074,500	315,352,900	17,278,400	5.8
Local and Private.......................................................	7,888,600	7,929,600	41,000	0.5
TOTAL STATE SPENDING.........................................	100,171,800	96,512,000	(3,659,800)	(3.7)
Less:
Other State Restricted Funds..................................	8,668,200	9,300,000	631,800	7.3
GENERAL FUND/GENERAL PURPOSE...................	91,503,600	87,212,000	(4,291,600)	(4.7)
PAYMENTS TO LOCALS...........................................	14,567,700	14,517,700	(50,000)	(0.3)

*As of July 1, 2019.

	Gross	GF/GP
FY 2018-19 Year-to-Date Appropriation......................................................	$406,134,900	$91,503,600

Changes from FY 2018-19 Year-to-Date:
Items Included by the Senate and House
1. Child Development and Care External Support. The Governor/Senate/House/Conference increased IDG payments to LARA to account for economic adjustments.	323,200	0
2. Child Development and Care Matching Requirement. The Governor/Senate/House/Conference shifted Federal funds to GF/GP to meet Federal matching requirements.	0	599,400
3. Adolescent and School Health. The Governor/Senate/House/ Conference continued a $319,900 supplemental appropriation that replaced lost Federal funding to support HIV/STD education prevention programs in schools.	0	0
4. Supplemental Appropriation Removal. The Governor/Senate/House/ Conference removed a $5.0 million supplemental appropriation for E-rate enhancements to increase the connection speed for schools and libraries.	(5,000,000)	(5,000,000)
5. Renaissance Zone Reimbursement. The Governor/Senate/House/ Conference reduced Renaissance Zone Reimbursement to libraries to align with current projections.	(300,000)	(300,000)
6. Drinking Water Declaration of Emergency Placeholder. The Governor/Senate/House/Conference removed the placeholder.	(100)	0
7. Economic Adjustments. Includes $1,286,500 Gross and $409,000 GF/GP for total economic adjustments, of which an estimated decrease of $586,400 Gross and $187,100 GF/GP is for legacy retirement costs (pension and retiree health).	1,286,500	409,000
Conference Agreement on Items of Difference
8. Child Development and Care Public Assistance. The Governor increased appropriations to increase the child care provider reimbursement rate between $0.20 and $0.50 ($16.4 million) and increase the entry threshold to 140% of the Federal Poverty Level ($13.6 million). The funding would be for implementation on January 1^st. The Senate only included the increase to the child care provider reimbursement rate. The House included a $100 placeholder to increase the entry threshold to 135%. The Conference included $15.0 million to only increase the child care provider reimbursement rate between $0.20 and $0.30.	15,000,000	0
9. Office of Great Start Operations. The Governor increased appropriations $3.6 million Gross and Federal for administration and oversight of the Child Development and Care program to meet Federal requirements. The Senate increased $3.2 million Gross and Federal. The Conference increased $1.8 million Gross and Federal split between Operations and Contracted Services.	1,800,000	0
10. Information Technology. The Governor/Conference increased teacher certification fees to support increased IT charges from the DTMB. The Senate did not include. The House reduced 25% from the Governor's recommendation.	300,000	0
11. Low Incident Outreach Fund. The Conference increased $250,000 in Gross and State Restricted revenue.	250,000	0
12. Other. The Governor/Senate/Conference created the Office of Systems, Evaluation, and Technology, the Office of Financial Management, the Office of Strategic Planning and Implementation, the Office of Educator Excellence, and the Office of Educational Supports by reorganizing existing funds and FTEs throughout the Department.	0	0
13. Reserve Fund. The Conference reduced all line items 75% and moved the funds equally between three reserve funds.	0	0

Total Changes...............................................................................................	$13,659,600	($4,291,600)
FY 2019-20 Conference Report Appropriation..............................................	$419,794,500	$87,212,000
Amount Over/(Under) GF/GP Target:	$0	$0

Boilerplate Changes from FY 2018-19 Year-to-Date:

Items Included by the Senate and House

1. Deleted Sections. The Governor/Senate/House/Conference deleted several sections, which include: 221 (retention of sexual misconduct records), 234 (restrictions of Administrative Rules), 1005 (LARA funding requirements), and 1101 (Drinking Water Declaration of Emergency, CDC pilot program).

2. Technical Changes. The Governor/Senate/House/Conference made several technical modifications that include date changes, changes in Part 1 appropriations, legacy costs, and name changes. (Sec. 201, 203, 212, 214, 230, 501, 701, 804, 1004, and 1007)

Conference Agreement on Items of Difference

3. Governor Deleted and Conference Retained Sections. The Governor deleted and Conference retained a number of sections, which include: 222 (protects employees who testify to the Legislature), 223 (retention of all reports), 225 (School Aid grant award date requirement), 227 (responding to requests from the Legislature within 30 days and reporting on due dates), 229 (notification when entering into contracts above $1.0 million or when changes are made to Federal accountability plans), 230 (nonpublic school report), 302 (State Board travel expenditure cap), 325 (notification of grants received), 409 (Administrative hearing requirements), 602 (Adolescent and School Health funding), 803 (Legislative intent for the Library of Michigan), 1003 (ECIC report), 1010 (notification of Federal CDC changes), and 1011 (CDC biweekly block reimbursement implementation).

4. Contingency Fund Authorization. The Senate deleted the Department's contingency fund authorization language. The Conference reduced contingency fund authorize amounts by 50%. (Sec. 210)

5. Sexual Abuse Report Modification. The Governor modified the sexual abuse report requirement, by removing the requirement to issue the sexual abuse report to all schools, but required the collection of information on policies adopted by school districts, ISDs, and charter school academies. The Senate/Conference modified the section to only require schools, ISDs, and charter school academies that did not report adopting a policy or adopted a new policy since last year. (Sec. 231)

6. Association Report. The Conference included a new report that list all associations or consortiums that received allocations from the department in the previous fiscal year, the amount received, and the purpose. (Sec. 235)

7. Department Administrative Reserve Funds. The Conference included new language that restricts funds to only be transferred through the Legislative Transfer process and Legislative intent language on the conditions for requesting a Legislative Transfer. (Sec. 236, 237, 238)

8. Labor Day Achievement Study. The Conference included new language that requires a study on student outcome differences between schools that start the school year before and after Labor Day. (Sec. 239)

9. Low Incidence Outreach Fund. The Governor/House modified the language to allow the Department to spend funds in addition to those appropriated in Part 1. The Senate/Conference did not include. (Sec. 408)

10. Allowable Teaching Experience. The Governor/Senate deleted and Conference modified the section to only allow ¼ of the teaching experience requirement for certification to come from long term substitute teaching. (Sec. 502)

11. A-F Accountability System. The Senate included a new section that requires that the Superintendent of Public Instruction request a waiver and state accountability plan amendment to implement the A-F accountability system passed in Public Act 601 of 2018. The Conference did not include (Sec. 702)

12. Child Development and Care Reimbursement Rate Increase. The Governor/Senate increased the CDC reimbursement rate for providers. The increase includes a $0.20 increase to all provides serving children between the ages of 0-5, a $0.20 increase to all 0 to 2 star-rated providers, and a $0.30 increase to all 3 to 5 star-rated providers. The Conference increased the CDC reimbursement rate $0.30 for providers serving children between age 0 to 5 and $0.20 for all other providers. (Sec. 1002)

13. Child Development and Care Income Entry Level Increase. The Governor increased the income entry threshold for the CDC program from 130% to 140% of the FPL. The Senate/Conference maintain the current entry threshold at 130%. (sec. 1009)

Date Completed: 9-18-19 Fiscal Analyst: Cory Savino

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.