House, Senate K-12 Budgets Depart from Gov's Proposal

Bob Kefgen's picture

The House and Senate K-12 budget subcommittees both reported their versions of the 2017-18 School Aid Fund budget this week. But where the Governor's budget proposed some significant new school funding ideas, both the House and Senate budgets are closer to the existing system. This means that things like the cap on shared time spending and the reduced foundation allowance for cyber schools are not included in either budget, but at the cost of line items like the $50 per pupil allotment for high school students and some of the increases to At Risk funding proposed in the Executive Recommendation.

Breaking it Down

Here is a brief breakdown of some (though certainly not all) of the major points of difference between the three budgets. Note that it's easy to get lost in the details of how each of these proposals would impact an individual district. Fortunately, there are district-by-district breakdowns of the total impact of each proposal (see the resources section at the end of this article).

Issue Governor House Senate
Foundation
  • $50-100/pupil increase using 2X formula.
  • Min/max foundation: $7,611/$8,279.
  • Gap between min/max: $668/pupil.
  • $100/pupil across the board increase (no 2X formula).
  • Min/max foundation: $7,611/$8,329.
  • Gap between min/max: $718/pupil.
  • $88-176/pupil increase using 2X formula.
  • Min/max foundation: $7,687/$8,317.
  • Gap between min/max: $630/pupil.
High School Foundation Increase Provides an additional $50 per pupil for students in grades 9-12 to recognize the higher cost of educating high school students. Does not include any additional funding for high school students. Does not include any additional funding for high school students.
Cyber School Foundation Cut Reduced the foundation allowance for cyber schools by 20%. Does not include a reduction for cyber schools. Does not include a reduction for cyber schools.
MPSERS Offset Continues a $100 million allocation that offsets MPSERS costs for districts based on their percentage of the statewide payroll. Continues a $100 million allocation that offsets MPSERS costs for districts based on their percentage of the statewide payroll. ELIMINATES the MPSERS offset payment. That funding is what the Senate uses to fund their proposed foundation allowance increase.
At Risk
  • Increases At Risk funding by $150 million.
  • Expands the pool of eligible students to include 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.
  • Makes hold harmless and out of formula districts eligible to receive funds.
  • Increases At Risk funding by $129.1 million.
  • Concurs with the Governor's proposal to expand the eligible student population.
  • Makes hold harmless and out of formula districts eligible, but caps the amount they will receive at 50% of the total per pupil allocation they would otherwise be eligible for.
  • Increases At Risk funding by $100 million.
  • Concurs with the Governor's proposal to expand the eligible student population, but also includes students eligible for free milk and allocates $54 million of the increase to pay for that cost (but only for those districts that are currently eligible to receive At Risk).
  • Allocates $41 million to create an equal per At Risk pupil allocation for all districts (including hold harmless and out of formula districts) equal to about $60 per At Risk pupil.
  • Allocates the remaining $5 million to districts with English learners based on their students WIDA scores.
Shared Time Caps total state spending on shared time pupils at $60 million (a cut of roughly $55 million). Retains current law with regard to shared time. Caps shared time pupils at .75 of an FTE (a cut of roughly $2 million).
Educator Evaluations Allocates $7 million to local districts and ISDs for continued educator evaluation training and implementation costs associated with the state's educator evaluation law (MCL 380.1249 and 380.1249b). Does not include any funding for training, but instead allocates $2.5 million to pay for a value added model (VAM) system that MDE would have to use for calculating student growth scores for teacher evaluation. Does not include any money for training. An allocation to provide for a value added model (VAM) was stripped out in an amendment offered by Senator Phil Pavlov (R-St. Clair) in conference committee.
CTE Equipment Includes $20 million for CTE equipment upgrades and capacity building activities through a competitive grant process. Provides $10 million for CTE equipment upgrades and capacity building activities through a competitive grant process, but gives priority to districts that lease equipment from private industry partners. Allocated $7.5 million for CTE equipment upgrades, capacity building activities, training on new equipment, and professional development for computer science and coding. Distributes the funding through a formula rather than competitive grants.

The Narrative

The differences between the three budgets promise to make for an interesting conference committee.

The Governor's proposal focused on differentiating funding to recognize the higher cost of educating some students, specifically high schoolers and At Risk students. He paid for this, in part, by capping shared time and (in another move to differentiate) cutting cyber school foundations…a proposal which would have a disproportionate impact on a few specific districts. By allocating a foundation increase on the 2X formula, he also continued to shrink the gap between the highest and lowest funded districts, but did so without taking away existing funding like the MPSERS offset, which would have created additional winners and losers.

The unifying theme of the Senate proposal seems to be closing the gap between those districts with the highest and lowest foundation. The move to eliminate the MPSERS offset in order to provide a bigger 2X foundation increase will disproportionately help those districts at the minimum foundation and hurt districts with larger foundations and those that have larger MPSERS payrolls. The Senate's version of At Risk expansion only extends a small portion of the overall funding to hold harmless and out of formula districts. And if that wasn't a clear enough signal of intention, the Senate proposal even renames the state maximum foundation to the "target" foundation.

The House proposal effectively carries forward the existing state of affairs for anther fiscal year. An across the board foundation increase gives a boost to every districts, but does nothing to close the gap between the state's highest and lowest foundation districts. The expansion of At Risk to hold harmless and out of formula districts at 50% of what other districts get is a step toward flattening out the impact of that line item, but still maintains a difference. By far the most controversial things the House did were continuing and expanding the Sec 152b non-public school reimbursement line item and signaling their intent to create a new transportation voucher program within the At Risk and Title I line items.

Next Steps and Resources

Now that these budgets are out of subcommittee, they go to the full House and Senate Appropriations Committees respectively, then to the House and Senate floors, before being referred to conference committee. That process will begin in earnest after the legislature returns from their spring break in mid-April. They are still on track to finalize budgets by the end of May or beginning of June, though if the May Consensus Revenue Estimating Conference projects any significant changes in the state's revenue, then all bets could be off.

For those Principals loking for more information—including a district-by-district breakdown of the effects of each budget so you can see how your district stacks up under the different proposals—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.