Budget Finalized, High School Per Pupil Increase Resurfaces

Bob Kefgen's picture

The 2017-18 School Aid Budget is in the books and on its way to Governor Snyder for his signature. The major highlights of this year’s budget include a $25 per pupil payment for high school students, a foundation allowance increase of $60-120 per pupil (distributed using the 2X formula), and a significant increase and expansion of At Risk funding. The funding for high school students was absent in an earlier version of the budget negotiated between the House and Senate without the direct involvement of the Governor's office, but was added back in the final agreement.

The Highlights

Here is a rundown of the budget highlights of most interest to secondary Principals:

Foundation Allowance:
A foundation increase of $60-$120 per pupil using the 2X formula. This increases the minimum foundation allowance to $7,631 and the maximum foundation allowance to $8,289, shrinking the gap between the highest and lowest funded districts to $658 per pupil, the smallest it has ever been.

High School Per Pupil Increase:
An additional $25 per pupil for every student in grades 9-12. The money is allocated by formula to districts based on the number of high school students they have enrolled. There is no requirement that the additional money be spent at the high school level, nor are their any reporting requirements or strings tied to the money. It is simply an increased allocation for districts that offer grades 9-12 in recognition of the fact that high school students cost more to educate.

At-Risk Funding:
A $120 million increase in At Risk funding, an expansion in the pool of eligible pupils, and an expansion in eligible districts. With the increased funding, districts will now receive an additional $777 per pupil (up from an avg of $673/pupil) for every At Risk student. The the pool of eligible students now includes both free AND reduced lunch students (currently only those receiving free lunch are eligible), students in households receiving SNAP and TANF benefits as well as homeless, migrant and foster care students…this means 131,000 additional students now qualify for At Risk funding. The formula for calculating the per pupil allocation is now based on the statewide weighted average foundation allowance rather than each district’s allocation. Finally, the bill expands At​-​Risk to include hold harmless districts (which are currently ineligible to receive any funding), but only at 30% of the funding available to non-hold harmless districts.

MPSERS Offset:
Continues a $100 million allocation that offsets MPSERS costs for districts based on their percentage of the statewide payroll. While it is a rough approximation and varies by district, an easy way to contextualize this funding is that it equates to a little over a 1% reduction in the MPSERS rate paid by districts.

MPSERS Reform:
The agreement sets aside $55 million to pay the projected first- and second-year increase in costs to local districts of offering new school employees to a more robust 401​(​k​)​-style retirement option​. It also makes a one-time, additional payment of $200 million to pay down the unfunded liability in the MPSERS system.

The conference report calls for the state to put out an RFP for a new state assessment system in grades 3-7. By excluding grade 8, the budget language paves the way for the MDE to move forward with their current plan to begin using PSAT 8/9 as the state's 8th grade assessment. For the lower grades, the language calls for the MDE to issue requests for proposal for a two-component assessment system. That system would have the following components:

  • ​A new, shorter summative assessment with a total testing time for ELA and math of no more than 3 hours.
  • A new benchmark assessment system that would allow districts to choose one of a list of MDE-approved benchmark assessments for ELA and math.

Other Items of Note:
There are also a handful of smaller line items and boilerplate language changes that are of interest to Principals, though not every item will affect every district:

  • Michigan’s long-standing program that provides AP/IB test fee waivers for low-income students is now fully state funded. The loss of federal Title IV revenue was a serious blow to this program, but by replacing the lost dollars with School Aid Fund, schools now have guaranteed funding a full year in advance, a significant improvement over past years.
  • $9.6M is allocated for CTE equipment upgrades.
  • A change in the pupil account rules will cap the amount districts can collect for shared time pupils at 0.75 FTE.
  • Districts will now be able to count middle college pupils for more than 1.0 FTE to account for the fact that many of these students are attending school for more than the state mandated number of days and hours of instruction.
  • Next Steps and Resources

    Despite the generally positive picture, the budget was not without its usual complement of bumps and blemishes. The final budget retains and expands language that would divert a small amount of School Aid Fund revenue to non-public schools…an issue that is already the subject of a lawsuit. There is also contradictory language included around what districts must include in their collective bargaining agreements. As is so often the case, these issues are likely going to have to work themselves out in the courts.

    Fortunately, none of the outstanding problems are significant enough to impact the ability of districts to move forward with their core work of educating students. The budget now heads to Governor Snyder’s desk for signature, which is expected—without line-item vetoes—in the coming weeks.

    For those looking for more information—including a district-by-district breakdown—the best compendium of available resources is maintained and regularly updated by the Michigan School Business Officials and also includes all the relevant budget documents, bills, summaries, and policy and fiscal analyses.