Budget | Michigan Association of Superintendents & Administrators

2017-18 School Aid Budget

The 2017-18 budget process has finally wrapped up, and a number of big changes are on the way. MASA has reviewed the final education budget and provided you with the highlights below. While many of these items display final funding levels, some items that were eliminated from the final budget have also been included im the highlights for the sake of consistency. Additionally, click here to see a breakdown from the House Fiscal Agency on how the 2017-18 budget will impact your district.

Final Budget Highlights

Sec. 3 and 4 – Definitions
Deletes definitions and references throughout the budget to the Education Achievement Authority, as it will be dissolved at the end of the current fiscal year.

Sec. 6(4) – Pupil Membership Definitions
Blended pupil membership is 90% current year fall count and 10% prior year.

Sec. 6(4)(h) – Pupil Membership Definitions
Considers a pupil’s participation in Cyber School educational program as regular daily attendance and a participation in a virtual course regular daily attendance for a district of PSA student.

Sec. 6(4)(ii) – Pupil Membership Definitions – Shared Time
Revises the pupil membership definition to cap the maximum FTE for which a nonpublic school pupil may be counted in a shared-time program at 0.75 FTE.

Sec. 8b (3) – District Codes for Public School Academies
Provides that for a cyber PSA that does not provide instruction at a specific location, and is authorized by a non-statewide entity, the ISD of assignment shall be the ISD that would normally provide programs and services to the resident school district in which the administrative office of the cyber PSA is located. Also provides that the ISD required to provide programs and services remains the same for as long as the cyber PSA is operating.

Sec. 11S – Flint Emergency Declaration
Reduces funding by $1.4 million to Flint School District and Genesee ISD related to providing additional services for early childhood and supplemental school services, bringing the total to $8.7 million for FY 2017- 18. Funds would be allocated to expanded Great Start Readiness Program (GSRP) eligibility ($3.0 million), school nurses and social workers ($2.6 million) in Flint schools, ISD support to Flint residents that attend districts other than Flint ($2.5 million), and nutrition programs ($605,000).

Sec. 15(2) – State Aid Allocation Adjustment
Adds language that if the result of a membership audit affects payments, the department may waive all or a portion of the adjustment if the department determines the district would have significant hardship satisfying financial obligations, providing instruction to students or the district has already taken action to ensure circumstances will not recur.

Sec. 20(1) – Foundation Allowance Calculation (Including Sec. 22a Prop A Obligation and Sec. 22b Discretionary Payment)
The basic foundation allowance for 2017-18 will be $8,289, an increase of $60. The minimum foundation allowance for 2017-18 will be $7,631, an increase of $120. This increase uses the 2x Formula at a cost of $153.3 million.

Sec. 20(6) – Foundation Allowance Calculation
Language not included.

Sec. 20F – Categorical Offset Payments
Maintain current year funding levels which maintain a base that ensured a minimum net increase of $5 for all districts for FY 2013- 14 and a minimum net increase of $25 for all districts for FY 2015-16 after categorical reductions in those years reduced total district funding more than foundation allowance increases.

Sec. 21 – Supplemental Payments to Districts with Schools under SRO Oversight
Revises to eliminate funding.

Sec. 21H – Partnership Model Districts
Includes $6.0 million.

Sec. 21J – Academic Early Warning Model
Adds $500,000 for competitive grants to districts that provide an education model that allows the use of multiple and innovative methods to determine pupils’ achievement of grade-level competencies and Michigan merit curriculum credit.

Sec. 22D – Isolated District Funding
Maintains current $5 million appropriation.

Sec. 22M – Technology Regional Data Hubs
Appropriates $2.2 million for a competitive grant process to a network for upgrading data infrastructure, promoting data integration systems, promoting 100% district adoption of the Michigan data hub network, ensuring data security and privacy, providing actionable and consistent statewide reports and dashboards, creating a governance model to facilitate a sustainable model for the future, and evaluating future data initiatives.

Sec. 22N – High School Per Pupil Bonus
$11 million for 2017-18 for additional payments to districts for higher instructional costs of educating high school students. Payments equal to $25 per pupil for all Grade 9-12 students.

Sec. 23F – Shared Time Pupils
Funds shared-time instruction through the foundation allowance. However, caps the maximum FTE for which a nonpublic school pupil may be counted in a shared-time program at 0.75 FTE, reducing costs by $2.0 million.

Sec. 29 – Declining Enrollment Support
Language not included. Governor had asked for $7 million in additional payments to districts for declining enrollment assistance.

Sec. 31a – “At-Risk” Pupil Support
Increases by $120.0 million to a total of $499.0 million and concurs with formula revisions proposed by Executive (which expands the number of eligible students) but caps newly eligible Hold Harmless and Out-of-Formula districts at 30% funding. Fully funding the new formula would cost $575.0 million, but payments would be prorated. Currently, eligible districts would receive an estimated $777 per eligible pupil and newly eligible districts would receive an estimated $233 per pupil. Moves Senate funding for English language learners to Sec. 41.

Sec. 41 – Bilingual/English Language Learners
Conference replaces the current bilingual education grants with $6.0 million allocated to districts that use the WIDA Access and WIDA Alternative Access assessments to provide services to English Language learners. Allocates $620 per FTE with scores between 1.0 and 1.9 and $410 per FTE with scores between 2.0 and 2.9.

Sec. 51a(1,14-16) – Special Ed Funding
(1) Appropriates funding based on anticipated costs for 2017-18.
(14) A PSA that is not a cyber must enter into an agreement with the ISD in which it is located, and if it doesn’t, it may not charge either the ISD in which it is located nor the resident ISD.
(15) Eliminates the penalty and requires that a cyber school shall directly receive its share of federal special education funds from the ISD in which it is located, and if the ISD fails to do so, MDE may.
(16) Requires that the ISD in which a cyber school is located must ensure that the cyber school complies with state and federal special education rules and law. Allocates up to $500,000 in funds to reimburse the ISDs for the added costs of ensuring this compliance.

Sec. 61c – Career & Tech Ed Equipment Upgrade
Increases by $6.4 million to a total of $9.6 million and includes a $300,000 earmark to district mechatronic grants.

Sec. 64b – Dual Enrollment Incentive Payment to District
Maintains funding at $1.75 million for 2017-18.

Sec. 78 – Statewide School Drinking Water Quality Program
Language not included. Governor had initially proposed $4.5 million for the reimbursement of water testing and other approved items limited to $950 per school building for public and registered non-public schools.

Sec. 81 – ISD Operations Support
Maintains funding at $67.1 million

Sec. 95a – Educator Evaluations
Language not included. Governor initially called for $7 million for payment to districts and ISDs to support the implementation of local evaluation systems for teachers and administrators.

Sec. 99h – FIRST Robotics
Maintains funding at $2.5 million, and adds $300,000 GF/GP for competitive grants to nonpublic schools for FIRST Robotics or Science Olympiad programs.

Sec. 102d – Data Analytical Tools
Maintains current funding of $1.5 million for ISD reimbursement.

Sec. 147 – MPSERS Rates
MPSERS retirement rates. Basic/MIP with premium subsidy increased to 25.56% for FY2018, an increase .62 percentage points. For all rates, please see pg. 285-287 of the complete school budget bill.

Sec. 147a(1) – MPSERS Cost Offset
Maintains current funding of $100.0 million to offset a share of MPSERS costs.

Sec. 147a(2) – MPSERS Assumed Rate of Return
Reimburses districts, ISDs, and district libraries for the employer normal cost increases related to the AROR reduction from 8.0% to 7.5% at a cost of $48.9 million for FY 2017-18 and a total cost of $97.8 million in FY 2018-19, once fully phased-in over 2 years.

Sec. 147c(1) – MPSERS Unfunded Liability State Share
2-year phase-in to reduce the MPSERS AROR from 8.0% to 7.5% at a cost of $90.8 million FY 2017-18 and double that in FY 2018-19. The FY 2017-18 cost increase is offset by savings due to improved health care cost experience and higher rates of investment returns during the most recent 5-year actuarial smoothing period. Total costs for the State Share are reduced by $22.0 million to $960.8 million for FY 2017-18.

Sec. 147c(2) – One-Time Deposit
Appropriates $200.0 million to make additional payments toward reducing the amortization period of the 2010 early retirement incentive costs.

Sec. 147e – MPSERS Employer Defined Contribution Match
Appropriates $23.1 million from the MPSERS retirement obligation reform reserve fund to reimburse districts, ISDs, and community colleges for the costs of a higher hybrid plan normal cost and a larger employer contribution for the new Defined Contribution plan as proposed in Senate Bill 401 and House Bill 4647.

Sec. 152b – Reimbursement for Nonpublic School Mandates
Maintains current funding at $2.5 million.

Sec. 164g – Legal Action Against State
Adds language preventing the use of state funds for any expenses relating to legal action against the state.

Sec. 164h – Collective Bargaining Agreement Penalty
Establishes a penalty equal to 5% of total state aid if a district or ISD enters into a collective bargaining agreement that does any of the following: establishes racial and religious preferences for employees; automatically deducts union dues from employee compensation; is in conflict with any state or federal laws regarding district transparency; includes a method of compensation that does not comply with the requirements of section 1250 of the Revised School Code, MCL 380.1250.