6 Differences In House, Senate, Gov’s K-12 Budget
May 23, 2023
Article courtesy MIRS News for SBAM’s Lansing Watchdog e-newsletter
The size of per pupil foundation allowances is among the larger differences in the Fiscal Year (FY) 2024 School Aid (K-12) budgets offered by the executive, House and Senate, but it’s by far not the only difference.
The House ($21.505 billion), governor ($20.891 billion) and Senate ($20.811 billion) are all proposing record funding for education, but the key difference revolves around how special student populations – at risk, English learners and special needs kids – receive their special pots of money from the state.
Below are the six line items flagged by MIRS.
1. The governor proposed $54.7 million more for schools with a high number of students from poor families, for a total of $812.2 million for these “at-risk students.” She proposed spending 11.5% more for these schools (roughly $1,105 for economically disadvantaged students).
The House recommended $1,391 more per student, which they accomplished by keeping at-risk funding the same percent for all districts, but increasing funding by $273.9 million for a total of $1 billion. The target allowance under the House recommendation is increased from 11.5% to 35%, with funding sufficient for prorated payments at 14.6%.
In the Senate, a $173 million increase for at-risk funding was recommended, along with the creation of a tiered model that gives higher funding to districts with higher concentrations of poverty. The Senate is rolling out $100 million to implement something called the “new opportunity index,” under which all districts would receive at least 11.5% of the foundation allowance for each at-risk pupil. However, districts with higher concentrations would receive a higher reimbursement, up to 15.3%.
Two lobbyists told MIRS they liked the Senate’s funding structure for at-risk students more, but they liked the dollar investment the House put into their K-12 budget better.
2. The executive recommended $248.7 million more for special education for a total spend of $2.2 billion.
The House increased that budget by $339.7 million more, with the same amount allocated for revised cost estimates and an increase of $136.7 million to reduce the amount of a special education pupil’s foundation allowance that counts toward special education costs to 0%.
The House’s recommendation also includes a one-time $34.2 million increase for a special education millage incentive, for a total recommendation of $2.3 billion.
The Senate increased the special education foundation amount from 75% to 100% of the per-pupil allowance, for $9,700 per pupil funded by a $499.5 million appropriation.
3. The executive recommendation for the per-pupil foundation allowance was at 5%, a $458 increase from the previous year, bringing the per-pupil allowance from $9,150 to $9,608. Funding would increase by $614 million.
The House last week passed 4% more, a $366 increase, bringing funding from $9,150 to $9,516 per student. That would be funded with an additional $488 million from the previous year.
The House also added a provision to assist schools with declining enrollment by allowing them to average pupil counts from FY 2022-23 and FY 2023-24, which would be funded with $71 million.
The Senate proposed the highest increase, at 6%, which would bring funding to $9,700 per student, with a total $10.633 billion appropriation.
3. The executive and the Senate want to cut state funding for cyber schools by 20%, for a $7,687 per-pupil allowance that would save a reported $42 million.
The House didn’t increase cyber school funding, but they didn’t cut it either, maintaining funding at $9,150, which would reportedly save $7.9 million.
4. The executive proposed a $90.8 million increase to the Great Start Readiness Program (GSRP), intended to increase access to school readiness preschool programs for four-year-old children in low-income families.
The increase includes the elimination of $83 million in Federal State Fiscal Recovery Fund (SFRF) dollars, along with an increase of $250,000 from the General Fund, for a total appropriation of $543.2 million toward Great Start.
The increase covers the increased per-pupil funding to $9,608 for full-day preschool programs, and from $4,575 to $4,80 for part-day programs.
Whitmer’s recommendation also increases the eligibility threshold from 250% to 300% of the federal poverty line, and ups the secondary threshold from 300% to 400% in cases where all eligible children have been served.
Transportation costs for pre-K students would be increased to $28 million, allowing for $500 per child, instead of the previously-allocated $300.
5. The House concurred with the aforementioned transportation cost increases, but tweaked the eligibility thresholds from the executive recommendation, setting them at 275% of the federal poverty line, though the House also increased the secondary threshold to 400%.
The House increased the overall budget for pre-K slightly less than the executive, with a $78 million increase for a total $530.4 million appropriation, which would cover per-pupil increases to $9,516 for full-day and $4,758 for part-day.
The Senate kept Great Start eligibility requirements the same as for the current year, but added an expanded option to allow pre-school program reimbursement at 120% of the foundation allowance per pupil if the program meets five days per week, 36 weeks per year, as opposed to the four-day, 30-week schedule required of regular GSRP programs.
The Senate also included language allowing districts to count pre-K students in the regular pupil count at 1.2 pupils, meaning they would get 120% of the foundation allowance. Additional funding for pre-K programs was recommended at $117 million.
An additional $77 million was set aside by the Senate for GSRP costs.
6. For Michigan public school employees in the retirement system (MPSERS), Whitmer recommended removing a one-time $1 billion School Aid Fund appropriation and $140.4 million from the MPSERS Retirement Obligation Reform Reserve Fund, replacing it with increased state support for K-12 MPSERS to the tune of $577.5 million.
The executive recommendation allocates a total of $2.4 billion, including $111.9 million to expand eligible recipients to intermediate school districts (ISD) and district libraries.
Another $363.7 million would be allocated toward cost adjustments, including a reduction in the assumed rate of return to 6% due to a dedicated gains policy.
The House concurred with the executive to remove the one-time appropriations and the allocation for cost adjustments, but increased state support by slightly more, at $686.5 million.
The total appropriation for MPSERS at $2.5 billion includes only $23.9 million in one-time School Aid funding to expand cost offsets to ISDs and district libraries for two years.
It also provides $97 million in one-time School Aid funding to reimburse districts for an estimated 1% of unfunded liability costs.
The Senate recommended $111.939 million to extend MPSERS costs currently received by districts to ISDs and district libraries.
The Senate also deposited $500 million into the MPSERS Obligation Reform Reserve Fund.
Other funding to highlight includes:
– A House-led effort to provide $40 million in one-time School Aid funding to forgive outstanding debt for distressed districts.
– The creation of the School Transportation Fund in the House, which would be funded with $450 million in School Aid Fund dollars. Of that funding, $150 million would be provided to districts based on a formula grouping them into quartiles based on riders per square mile. Funding would be distributed equal to the median transportation cost per ride for that quartile or the district’s actual transportation costs per general education student, whichever is less.
– Both branches concurred with the executive recommendation to provide $160 million for free school lunches and breakfasts for pre-K-12 students, but the House added a requirement that districts offer meals that meet dietary restrictions, including gluten free, vegetarian, vegan, kosher, halal and allergy-friendly meals. The Senate appropriated an additional $5 million to reimburse schools for added costs to provide special meals.
– The Senate included an increase for child and adolescent health centers, including $15.0 million for increased ongoing funding, $10.0 million for one-time IT costs and $10.0 million for one-time infrastructure investments at existing centers.
– The Senate doubled funding for bilingual education, for a total of $53,022,000. The House increased funding by 5%, in line with the executive recommendation.