Will roadwork trump Michigan public school kids?

4 minute read

As Michigan school districts work towards submitting their initial 2019-20 budgets for approval at the end of the fiscal year, a battle looms between Michigan’s House and the Governor to compromise on the School Aid Fund (SAF) Budget. Michigan Business Managers are watching and waiting in anticipation to see what the final budget will include.

The state of Michigan already ranks as having one of the lower per pupil costs in the United States. With this final budget, some Michigan school districts worry that they may be getting less than what they budgeted for or anticipated. Part of the House proposal includes the removal of fuel sales tax revenues and a reduction of $325.6 million in revenue which may indicate a roads package deal. Will roads trump Michigan’s students?

Here are some highlights from the Governor and House proposals:

Foundation Allowance

Governor:

• $235.0 million to provide increases ranging from $120-$180 per pupil, using a 1.5x formula
• Minimum foundation allowance – increase from $7,871 to $8,051 (2.3%)
• State maximum guaranteed foundation – increase from $8,409 to $8,529 (1.4%)

House:

• $226.4 million to provide increases ranging from $90-$180 per pupil, using a 2x formula
• Minimum foundation allowance – increase from $7,871 to $8,051 (2.3%)
• State maximum guaranteed foundation – increase from $8,409 to $8,499 (1.1%)

At-Risk Programs

Governor: Rolls funding ($517 million) into Economically Disadvantaged section of the proposal for a combined total of $619 million

House: Funding will remain the same for 2019-20 at $517 million

Career & Technical Education (CTE)

Incentive Payments

Governor: Eliminates payments from $25 per pupil enrolled and an extra $25 for specific high need program

House: Increases payments from $25 per pupil enrolled and an extra $25 for specific high need program to $75 per pupil enrolled and an extra $75 for specific high need program

Equipment Upgrades

Governor: Eliminates $2.5 million for equipment grants to career education planning districts (where at least 50% of them are located in an ISD that doesn’t levy CTE millage)

House: Funding increases by an extra $24.3 million ($26.8 million total)

Funding of MPSERS (MI Public Schools Employees Retirement System)

Both the Governor and House agree to increase funding for the buy-down of the unfunded liability ($1,030,400,000).

Elimination of Categorical Funds

Both proposals reduce by $10.2 million by eliminating 15 categorical programs, including dropout recovery programs, dropout prevention grants, CTE counselors, dual enrollment incentive payments, school bus safety program, early learning collaborative partnership, digital learning preparation, and statewide evaluation tool.

Other Notables from the House Proposal:

• 1% increase for ISD Section 81 funding
• Data Analysis Tools funding stays the same at $1.5 million
• Funding for Section 64b dual-enrollment incentives is eliminated
• Elimination of the high school per pupil bonus (loss of $25 per pupil)

Will the SAF budget be finalized before the June 30 deadline? Time will tell. National Insurance Services will be monitoring the situation and will keep you informed of any pertinent changes. For questions and concerns, contact Jason Ruston, Employee Benefits Consultant.

Additional Resources

2019-20 School Aid Fund Budget Update (MSBO)

School Aid Fund 2019-20 Resources  - Updates are added as available. Checkout side-by-side comparison of the proposals and your estimated district impact.