4435: SENATE-PASSED (6-23-09) - FY 2009-10 COMMUNITY COLLEGES BUDGET

FY 2009-10 COMMUNITY COLLEGES BUDGET H.B. 4435 (S-1): SENATE-PASSED

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House Bill 4435 (S-1 as passed by the Senate)
Committee: Appropriations

FY 2008-09 Year-to-Date Gross Appropriation	$299,360,500
Changes from FY 2008-09 Year-to-Date:
1. Continuation Budget. The Governor maintained funding for the Community College Budget at the FY 2008-09 level.	0
2. North American Indian Tuition Waiver. Public Act 174 of 1976 requires a Michigan public community college or public university to waive tuition for any North American Indian who meets certain qualification requirements. The Act also requires the State to annually reimburse each institution for the total amount of tuition waived during the prior fiscal year. Until FY 1996-97, reimbursement was funded in the Higher Education Appropriation Budget Bill. In FY 1996-97, funding ($936,500) for the tuition waiver reimbursement was rolled into the line item appropriation of each university and community college based on a three-year payment average with 6% added for inflation. However, since that point in time, no specific appropriation adjustment has been made to the community college budget to fund the actual cost of the North American Indian Tuition Waiver. The House estimated that an additional $802,600 was needed to fully fund the actual cost of waivers in FY 2009-10. No additional funds were added by the House, but the $936,500 was redistributed to colleges based on a recent three-year average of tuition waivers granted. This redistribution resulted in increases for 12 colleges and decreases for 16 colleges. The Senate did not include the House changes. See attached table for details.	0
3. Federal Stimulus Funds. The House added $97 million in State Fiscal Stabilization funding to be distributed pursuant to the Performance Indicators Task Force Formula and used for workforce development, job creation, and worker retraining. The Senate did not include this item.	0
4. Renaissance Zone Reimbursements. The Governor and the House included funding for renaissance zone reimbursements pursuant to 1996 PA 376 at the FY 2008-09 level of $3,480,000. The Senate removed funding and the related boilerplate (Sec. 404). The following table lists community college estimated renaissance zone reimbursements for FY 2008-09. FY 2008-09 Estimated Renaissance Zone Reimbursements College Reimbursement College Reimbursement Alpena $4,956 Mid-Michigan $7,046 Bay de Noc 2,656 Monroe 1,068 Delta 180,481 Montcalm 290,180 Glen Oaks 4,309 Mott 177,376 Gogebic 7,015 Muskegon 58,640 Grand Rapids 558,919 Northwestern 19,703 Jackson 135,304 Oakland 29,382 Kalamazoo Valley 40,935 Southwestern 341 Kellogg 148,063 St. Clair 36,891 Lake Michigan 415,158 Wayne County 726,953 Lansing 23,944 West Shore 77,993 Macomb 187,997 Statewide Estimated Reimbursement $3,135,310	(3,480,000)
5. Comparison to Governor's Recommendation. The Senate is $3,480,000 below the Governor's recommendation for both Gross and GF/GP.
Total Changes	($3,480,000)
FY 2009-10 Senate-Passed Gross Appropriation	$295,880,500

FY 2009-10 COMMUNITY COLLEGES BUDGET BOILERPLATE HIGHLIGHTS

Changes from FY 2008-09 Year to Date:

1. Parity to Higher Education Budget. The Governor eliminated a section stating legislative intent that increases to State-supported 4-year universities will be accompanied by similar increases for State-supported community colleges. The House restored this section. The Senate concurred with the Governor.

2. Nursing Education Programs. The Governor modified current year language to reflect her proposal to financial aid for higher education (Michigan College Access Grants). The House and Senate did not concur with the Governor, restored current year language and added language encouraging programs that assist in placing students at all levels of nursing, recruiting and hiring more individuals with masters degrees in nursing as instructors. (Sec. 241)

3. Purchase of Foreign Automobiles Prohibition. Funds appropriated in Part 1 shall not be used for the purchase of foreign automobiles if competitively priced and of comparable quality automobiles made in the State of Michigan or elsewhere in the United States of America are available. The Governor modified the language by including leases along with purchases and replacing "foreign automobiles" with "vehicle assembled or manufactured outside of the United States." The House and Senate concurred with the Governor. (Sec. 247)

4. Tuition Restraint. The Governor included new language stating: "It is expected that a public university or community college receiving federal stimulus funds will not raise tuition and fees charged to Michigan residents for the remainder of 2008-2009 and for 2009-2010." The House changed that language by stating legislative intent that in-district tuition and fees will not be raised by more than the percentage increase in the US CPI plus 0.5 percent as a condition of receiving stimulus funds. The Senate did not include either version of the language.

5. District Consolidation. The House added new language stating that it was the intent of the Legislature to study the feasibility of legislation that would provide rules and guidelines for a path to consolidation of community college districts and the creation of inter-college agreements pursuant to Section 28 of article VII of the State Constitution of 1963. The Legislature also intends to study the feasibility of appropriating additional funds to districts that have a local property tax to provided incentives to enter into those agreements. The Senate replaced this section with language that encourages community colleges to achieve efficiencies through joint ventures, collaborations, adjusting the size and frequency of classes, web-based instruction, consolidation of services, and coordinating and sharing proposed capital outlay improvements. (Sec. 249)

6. Additional Funding. Provides that if additional funding becomes available for community college operations, that additional funding shall first be allocated to colleges that incurred the highest percentage reduction due to the elimination of renaissance zone reimbursements. As used in this section, percentage reduction means renaissance zone payment as a percentage of state funding for college operations. (Sec. 250)

7. Part-time Faculty. The House added language stating that It was the intent of the Legislature that the Michigan Community College Association, the Legislature, and other interested parties begin a discussion regarding part-time faculty pay, benefits, and job security. Specific attention should be paid to part-time faculty instructing at multiple institutions having the equivalent of a full-time academic workload. The Senate removed this section.

8. Federal Stimulus Funds. The House added language stating that the $97 million in State fiscal stabilization funding shall be distributed pursuant to the Performance Indicators Task Force Formula and used for workforce development, job creation, and worker retraining. Sets criteria and provides for report. The Senate removed this section.

9. Indian Tuition Waivers. The House added language encouraging colleges to consider whether the use of the term "Indian" as a descriptive term for Michigan tribal issues involving community colleges is appropriate. The Senate removed this subsection.

10. Community College Unrestricted Assets. The House added new language that requires community colleges with unrestricted assets equal to or more than 25.7% of overall annual operating revenue to prepare a report outlining the college's intended purpose for carrying the unrestricted assets. The Senate removed this section.

11. Other Changes. The Governor eliminated sections one-time sections related to the Michigan New Jobs Training Program, and a nursing workgroup study that has been completed. The House and Senate concurred with the Governor. The House and Senate restored the following language removed by the Governor; requires the At-risk categorical grant to be paid in full to colleges by November 1. (Sec. 211), a provision requiring community colleges to comply with current Joint Capital Outlay Subcommittee (Sec. 217), language encouraging community colleges to organize and participate in a legislative summit on a strategy for meeting the employment needs of the entire State (Sec. 224), intent language on payments in lieu of taxes (Sec. 242), performance task force indicators formula (Sec. 304), Perkins Act (Sec. 511), and a report on the impact of TIFAs and tax abatement programs (Sec. 513).

Date Completed: 6-23-09 Fiscal Analyst: Bill Bowerman Bill Analysis @ http://www.senate.michigan.gov/sfa This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations. hiccl_sp.doc