Final Agreement Reached on K-12 Budget (UPDATED 13 June 2018)

Bob Kefgen's picture

UPDATE (13 June 2018): During the process of rolling all the major education-related budget bills (K-12, higher education, and community colleges) into a single omnibus bill (HB 5579), the Legislature made a few last tweaks to boilerplate language in the School Aid Fund budget before passing it and sending it to the Governor's desk for signature. Two in particular are of note: a cap on how quickly a district can grow its shared time programs and a prohibition on collecting foundation allowances for out-of-state students who also pay tuition. The article below has been updated to reflect these changes and links have been added so Principals can find the omnibus budget bill.

The final budget agreement for the 2018-19 school year was reported out of conference committee on Thursday afternoon. There were some surprises in the final language, but most of the major pieces of the budget came together as expected. Districts will receive a $120-240 per pupil increase on the 2X formula, the $25 per pupil high school student bonus stayed in the final version of the budget, the up to $50 per pupil incentive originally proposed by Governor Snyder back in February reappeared in the final version, and no changes were made to either shared time rules or cyber school foundation allowances.

Here is a more detailed breakdown of the major points:

Foundation Allowance

  • Schools will receive a foundation increase of $120-240 per pupil using the 2X formula, which (as everyone running for election this year is sure to point out) is the biggest increase foundation increase since 2002. The minimum foundation will be raised to $7,871 and the maximum foundation will jump to $8,409. For those keeping track, this will reduce the gap between minimum and maximum foundation districts to $538/pupil, the smallest it has ever been.
  • An additional $25 per pupil for students in 9-12 grade. This is a continuation of current year practice and recognizes the higher costs of high school. These dollars come without any additional strings attached, which is both good and bad from a secondary Principal perspective. On the downside, there is no requirement that the extra money be spent at the high school level, but on the upside, schools are not required to jump through any hoops to qualify for the money and there are no limits on how it can be spent…it is just like the foundation allowance.
  • A new $25 per pupil increase for CTE students. Like the additional money for high school students, the money comes with no strings attached. Any student who is enrolled in at least one CTE program qualifies for the additional funding.
  • An additional $25 per pupil for CTE students enrolled in certain programs, specifically those that "provide instruction in critical skills and high-demand career fields." This language is identical to what was in the Governor's original budget language, which means that approximately 72,000 of the 109,000 students currently enrolled in CTE fall into one of these categories. The budget identifies those categories by CIP code and the list is as follows:
    • Agriculture, Agriculture Operations, and Related Sciences
    • Natural Resources and Conservation
    • Communications Technologies/Technicians and Support Services
    • Computer and Information Sciences and Support Services
    • Engineering
    • Engineering Technologies and Engineering-Related Fields
    • Biological and Biomedical Sciences
    • Construction Trades
    • Mechanic and Repair Technologies/Technicians
    • Precision Production
    • Health Professions and Related Programs

Other Issues

  • Student Mental Health and Support Services
    Creates a new $30 million fund using School Aid dollars "to be used to support efforts to improve mental health and support services for K-12 pupils." The money is simply a set-aside and will need further legislative action to be spent, but it is a clear statement from the Legislature that they intend to spend money on student mental health.
  • At Risk
    The budget continues funding At Risk at the current year level of $499 million. While there was robust debate over the boilerplate in this section, the final bill is largely unchanged from current law, with a few significant changes: the amount of At Risk that can be spent on professional development has increased from 3% to 5% and the penalties that would have taken effect in 2018-19 have been delayed by a year, and the student performance metrics have been tweaked.
  • 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.
  • Cyber School Foundation Cut
    This proposal did not make it into the final agreement, so there will be no change from current law.
  • Shared Time Growth Cap
    New boilerplate added during the omnibus conference committee caps shared time at 10% growth if shared time membership already exceeds 5% of a district's non-shared time membership. If a district's shared time membership is less than 5% of a district's non-shared time membership, growth is capped at the greater of either 5% of non-shared time membership or 10 growth in shared time.
  • Out-of-State Tuition Students
    New boilerplate added during the omnibus conference committee provides that "if a district…charges tuition for a pupil that resided out of state during the immediately preceding school year" the district cannot collect a foundation allowance for that student. This language seems aimed specifically at districts that have programs that enroll large numbers of students from foreign countries and both charge them tuition and collect a foundation allowance for them from the state.
  • Partnership District Accountability
    The biggest surprise was controversial language that ties foundation allowance funding for districts that entered into Partnership Agreements with MDE to meeting specific academic performance targets. A version of this language was originally included in the Senate bill, but was not expected to make it into the final budget. Districts with Partnership Agreements will have to amend them under the new language, but without interpretation from MDE or the courts, it's not entirely clear what the implications of this new language are.

Resources

As you might expect with a state budget, there is plenty of detail available for those Principals who want it. The best compendium of available resources is maintained and regularly updated by the Michigan School Business Officials and includes all the relevant budget documents, bills, summaries, policy and fiscal analyses, and a district-by-district estimate of the financial impact of the budget.