FY 2011-12 SCHOOL AID BUDGET H.B. 4325 (P.A. 62 of 2011): ENACTED


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FY 2010-11 Year-to-Date Gross Appropriation $13,134,236,200
 

8. FY 2011-12 One-Time Appropriations. Conference included four target agreement one-time funding items totaling $455.5 million. These include $154.0 million for a financial "best practices" categorical to pay $100 per pupil to eligible districts, and $155.0 million for payments to districts to partially offset MPSERS costs. Also, Conference included $133.0 million for a reserve for MPSERS retirement obligation reform. The fourth item was funding class size reduction grants at 68.5% of FY 2010-11 amounts, or $13.5 million.
Changes from FY 2010-11 Year-to-Date:
  Items Included by the Senate and House
1. Technical and Caseload Cost Adjustments. Senate and House both included technical cost adjustments in pupils, special education, and taxable value totaling $180.0 million in savings, and additional debt service cost of $88.4 million. Other adjustments affecting education costs at Department of Human Services facilities and Federal special education funding were included. Both budgets included the noncontinuation of $316.3 million in Federal Ed Jobs Funds. (399,065,600)
2. Bus Inspections. House and Senate included full funding for the Michigan State Police to continue conducting school bus inspections. 1,095,800
3. Categoricals. House and Senate eliminated declining enrollment grants, bilingual education, middle college grants, precollege engineering grants, agriculture education funding at SVSU, and Pontiac's crisis intervention. House and Senate also reduced intermediate school district operational funding by 5.0%, or $3.3 million. (29,573,900)
Conference Agreement on Items of Difference
4. Foundation Allowance. Conference concurred with Governor to reduce foundation allowances by $470 per pupil. This is a combination of rebasing the foundation allowance for the existing $170 per-pupil reduction in State aid, along with an additional $300 per-pupil reduction. (452,500,000)
5. Half Funding for Half-Day Kindergarten. Conference did not include the Senate's proposal to reduce funding for half-day kindergarten programs in FY 2011-12. However, Conference included language making this change for FY 2012-13. 0
6. District-Specific Adjustments. Conference reduced foundation allowance adjustments for Wayne-Westland, Gibraltar, Huron, and Garden City by 50.0%. The Governor had eliminated these adjustments in their entirety. Conference added language stating the adjustments would be eliminated in FY 2012-13. Conference also eliminated class size reduction adjustments on an ongoing basis but restored 68.5% as a one-time adjustment - see item 8. (24,000,000)
7. Other Categoricals. Conference concurred with House not to reduce Renaissance Zone or Court-Placed Pupils. A technical adjustment for PILT was concurred in, and ISD special education FICA payments were eliminated. Conference further reduced ECIC/ISD Collaboratives grants by $100,000 but increased Great Start Readiness grants by $6.0 million. Conference retained $700,000 in funding for MBT hold harmless grants and Section 6(4)(y) declining enrollment grants for small, rural districts. Conference retained isolated district funding at current-year levels. Conference changed the pupil membership formula from 75/25 to 90/10 (weighting on fall of current year plus spring of prior year). State Aid to Libraries was reduced $195,700 in this budget. (26,619,600)
 

Total Changes ($930,663,300)
  FY 2011-12 Enacted Gross Appropriation $12,203,572,900
FY 2011-12 SCHOOL AID BUDGET BOILERPLATE HIGHLIGHTS

Changes from FY 2010-11 Year to Date:
  Items Included by the Senate and House
1. Proration Language. Governor, House, and Senate proposed to change the proration formula to include the school aid support of community colleges and universities. In other words, if a shortfall in School Aid Fund occurred and proration was implemented, a reduction would be spread proportionally across K-12, community colleges, and universities in proportion to their share of the total SAF appropriation. (Sec. 296)
2. FY 2012-13 Earmark of Foundation Allowance Funding. Governor earmarked $300.0 million of foundation allowance funding that would be available only to those districts that charged their employees the same percentage of health care costs that State employees pay. If districts did not do so, their foundation allowance payment would be further reduced beyond the level enacted for FY 2011-12. (Sec. 22b(12)) Senate and House did not include.
3. ISD Operational Funding Guarantee. Governor, House, and Senate proposed to eliminate language protecting ISD operational funding from falling below certain levels paid in 1994-95. (Sec. 81(6))
4. MPSERS Retirement Contribution Rate. For employees hired before July 1, 2010, the MPSERS contribution rate is 24.46% of payroll in FY 2011-12 and 27.37% of payroll in FY 2012-13. For employees hired on or after July 1, 2010, the MPSERS contribution rate in FY 2011-12 is 23.23% of payroll and, in FY 2012-13, the rate is 26.14%. (Sec. 147)
Conference Agreement on Items of Difference
5. Pupil Count Day. Conference concurred with the Governor and Senate to change the pupil count day from the last Wednesday in September to the first Wednesday in October. House did not include this change. (Sec. 6)
6. Half-Day Kindergarten. Senate included a change in funding for kindergarten such that programs that operate half day would receive half funding, rather than current-law full funding. The Senate made this change effective for the upcoming school year, FY 2011-12. House included this change, but made it effective in FY 2012-13. Conference concurred with the House to make the change effective in FY 2012-13. (Sec. 6(4)(r))
7. Counting Certain Vocational Education Pupils in Membership. Senate included language allowing educating districts to count certain vocational education pupils in membership, without the approval of the district of residence. Conference did not include these definitions. (Sec. 6 (6)(p)(q) and (r))
8. FY 2012-13 Appropriations. Senate included language stating the intent of the Legislature to appropriate funding in FY 2012-13 at FY 2011-12 levels, adjusted for caseload and cost factors. House included actual FY 2012-13 appropriations, throughout the bill. Conference concurred with Senate. (Sec. 12)
9. Reporting of Health Care Bids. Senate included a new requirement that districts post the health care bids required under the Public Employees' Health Benefit Act to their web sites. Conference concurred. (Sec. 18)
10. Best Practices Incentive Grants. Senate included $200.0 million for FY 2011-12 for best practices incentive grants. House included the grant, but without an appropriation. Conference appropriated $154.0 million to provide $100 per-pupil one-time grants to districts meeting four of five criteria: providing a dashboard with indicators, obtaining competitive bids on non-instructional services, charging employees at least 10% of health costs, holding the policy for medical benefit plans (if directly employing staff), and continuing to implement consolidation plans. (Sec. 22f)
11. Dearborn and Baldwin At-Risk Earmarks. Conference concurred with Governor to remove Dearborn and Baldwin from the list of districts eligible for At-Risk funding. The funding tied to those two districts (totaling $5.0 million) will remain and be redistributed to remaining eligible grantees. (Sec. 31a)
12. Early Childhood Language. House included numerous changes to various sections of early childhood funding, including intent to consolidate funding into a block grant in FY 2012-13, changing fiduciary agents, maintaining the use of GSRP funds for Parents in Education programming, not including the definition of full-day GSRP programming, and other items. Conference concurred with House. (Sections 32b, 32d, 32j)
13. MPSERS Reserve for Retirement Obligation Reform. Conference included a new section allocating from the FY 2010-11 estimated year-end balance $133.0 million to the MPSERS reserve for retirement obligation reform. Conference included language stating the intent of the legislature to appoint a workgroup to examine potential reforms. (Sec. 147b)
14. Health Care Costs. Senate included language encouraging districts to review their health care costs and consider additional employee cost sharing. House did not include this language. Conference did not include. (Sec. 166f)

Date Completed: 6-22-11 Fiscal Analyst: Kathryn Summers
FY 2011-12 COMMUNITY COLLEGES BUDGET H.B. 4325 (P.A. 62 of 2011): ENACTED



FY 2010-11 Year-to-Date Gross Appropriation $295,880,500
 

Changes from FY 2010-11 Year-to-Date:
  Items Included by the Senate and House
1. At-Risk Student Success Program. The Governor maintained funding for the at-risk program at the FY 2010-11 level. The House, Senate, and Conference eliminated the $3,322,700 separate appropriation line item for at-risk payments and rolled the FY 2011-12 distribution into the operation line items of each community college. The At-Risk Student Success Program originated in FY 1989-90 and was designed to address the needs of students who test at a level that would indicate that they will not be successful in college without additional preparatory assistance. Of the amount appropriated, $1,120,000 is allocated for base grants of $40,000 to each community college and the balance is distributed proportionately based on each college's most recent three years total developmental/ preparatory contact hours. Table 1 lists the distribution to each college. 0
2. Funding Shift to School Aid Fund. The Governor, House, and Senate shifted $195,880,500 from the State General Fund to the School Aid Fund. 0
Conference Agreement on Items of Difference
3. Operations. The Governor maintained funding for community college operations at the FY 2010-11 level. The Senate reduced funding for community college operations by $10.0 million (3.4%). The reduction was allocated based on the Performance Indicators Task Force Formula that was developed pursuant to Section 242 of Public Act 154 of 2005, and Section 304 of Public Act 165 of 2010. The House reduced funding for community colleges by $43,883,700 (15.0%), applying the reductions across-the-board instead of using the Performance Indicators Task Force Formula. The Conference reduced funding by $12.0 million. Half of the reduction was across-the-board and half was based on the Performance Indicators Task Force Formula. Table 1 lists the impact on each college. (12,000,000)
 

Total Changes ($12,000,000)
  FY 2011-12 Enacted Gross Appropriation $283,880,500
FY 2011-12 COMMUNITY COLLEGES BOILERPLATE HIGHLIGHTS

Changes from FY 2010-11 Year to Date:
  Items Included by the Senate and House
1. Restored Sections. Compliance with the DMB Act, buy American intent language, depressed and deprived communities, equal opportunities, and efficiencies.
2. School Aid Fund Proration. Process to adjust appropriation if is revenue below appropriations. (Sec. 296)
Conference Agreement on Items of Difference
3. Internet Reports. Requires use of the Internet to fulfill reporting requirements unless otherwise specified. Governor and Senate deleted; House restored. Conference concurred with House. (Sec. 203)
4. JCOS Compliance. Governor deleted compliance with JCOS policy. Senate and Conference restored and included penalty of 1.0% appropriations reduction for each violation. House included different penalty. (Sec. 208)
5. Transparency. The House and Conference included language requiring colleges to develop on public accessible Internet site a comprehensive report categorizing all institutional general fund expenditures. (Sec. 209(1))
6. Collaboration with Four-Year Universities. Encourages community colleges to explore ways of increasing collaboration and cooperation with universities. Governor/House deleted; Senate/Conference restored. (Sec. 210)
7. Foreign Automobile Prohibition. Prohibits lease or purchase if competitively priced/comparable quality Michigan/USA automobiles available. Governor/House deleted; Senate/Conference included. (Sec. 227)
8. Communications with Legislators. Senate and Conference included language stating a college shall not take disciplinary action against an employee for communicating with member of the legislature or their staff. (Sec. 228)
9. Block Transfers. House and Conference included new language creating a committee to develop a process to improve the transferability of core college courses between colleges and universities. (Sec. 210A)
10. Reverse Transfer. House and Conference included language providing that colleges work with public universities to implement reverse transfer agreements (transfer university credits to college for an associate's degree). (Sec. 213)
11. Common Cut Score. House and Conference included language creating a committee to develop a common set of scores using the ACT assessment to determine placement in developmental courses, requires report. (Sec. 214)
12. FY 2011-12 Budget Report. House and Conference included language requiring report on FY 2011-12 budgeted revenue sources, and expenditures by November 15, 2011. (Sec. 209(2))
13. Statutory Mandates. House and Conference included legislative intent for a review of statutory mandates imposed on community colleges. Determine whether necessary and costs/benefit analysis. Provides for report. (Sec. 216)
14. Military Status. Conference included intent that colleges include in their admission application process a specific question as to the military/national guard/reserves/veteran status of an applicant (or the spouse or dependent thereof) in order to more quickly identify potential educational assistance available to that applicant. (Sec. 229)
15. Performance Indicators Task Force. Legislative intent that performance measures be reviewed and more fully implemented and that the performance indicators task force review and implement one or more measurable data items for the local strategic value indicator and one or more measurable data items for an administrative cost formula component. Governor and House deleted; Senate and Conference included. (Sec. 230)
16. Indian Tuition Waivers. States colleges shall use the criteria cited in 1976 PA 174, MCL 390.1251 to 390.1253, to determine eligibility for tuition waivers, and shall grant those waivers to individuals who meet the criteria and request tuition waivers. Governor and Senate included; House and Conference deleted. (Sec. 223)
17. Anticipated Appropriations for Fiscal Year 2012-13. The Governor and House included line-item appropriations for FY 2012-13. The Senate and Conference did not include line items and instead included boilerplate stating intent to provide appropriations for FY 2012-13 at the FY 2011-12 level except for changes in caseload and related costs, Federal fund match rates, economic factors, and available revenue. (Sec. 201A)

Date Completed: 6-22-11 Fiscal Analyst: Bill Bowerman


FY 2011-12 HIGHER EDUCATION BUDGET H.B. 4325 (P.A. 62 of 2011): ENACTED

FY 2010-11 Year-to-Date Gross Appropriation $1,578,278,500
 

8. FY 2011-12 One-Time Appropriations. Included: $500,000 for the EMU Autism Collaborative Center, $1.2 million for the MSU Facility for Rare Isotope Beams, and $200,000 for WMU economic development and commercialization.
Changes from FY 2010-11 Year-to-Date:
  Items Included by the Senate and House
1. Tuition Grants/State Competitive Scholarships. The Governor eliminated the $31,664,700 Tuition Grant Program and the $19,861,700 State Competitive Scholarship Program to fund a new Pathway to Higher Education Program. The House, Senate and Conference maintained the existing programs. 0
2. Cooperative Extension Service (CES) and Agriculture Experiment Station (AES). The Governor reduced the CES and the AES by 15.0% and rolled the programs into one line item. The House, Senate, and Conference concurred.   (9,289,900)
3. Tuition Incentive Program (TIP). The Governor, House, Senate, and Conference increased funding from $37.4 million to $43.8 million based on individuals eligible for funding and costs associated with the program. 6,400,000
4. Federal Funding Shifts. The Governor, House, Senate, and Conference shifted $93,826,400 in funding for financial aid programs to Temporary Assistance for Needy Families (TANF), offsetting a like amount in State General Fund and State Restricted sources of funding. This eliminates all General Fund support for financial aid except for $1.0 million appropriated for Children of Veterans and Officer's Survivor Tuition Programs. 0
Conference Agreement on Items of Difference
5. School Aid Funding Shift. The Governor shifted $699,719,500 from the State General Fund to the School Aid Fund (SAF) for support of university operation line items. The House concurred with the Governor. The Senate reduced SAF support to $200.0 million. The Conference included $200,019,500 in School Aid Fund revenue. 0
6. University Operations Reductions. The Governor reduced university operations funding by $213,110,200 (15.0%). The Senate concurred. The House included a 15.0% reduction, but applied 14.0% across-the-board and 1.0% based on a sliding scale formula with larger reductions for universities receiving a higher amount of State funding per student. The Conference concurred with the Governor and Senate. Table 1 lists reductions by institution. (213,110,200)
7. Tuition Restraint Incentive - Operations Reduction. The Governor and House reduced university operations by $83.0 million and appropriated that amount in a separate tuition restraint incentive line item for each university. Individual university incentive amounts are based on that university's average tuition/fee rate increase over the last five years, ranging from 5.1% to 9.8% of proposed FY 2011-12 appropriations. The incentive would be paid only if a university held its FY 2011-12 tuition/fee rate increase below the prior five-year statewide average of 7.1%. The Senate eliminated tuition restraint and restored funding to operation line items. The Conference concurred with the Governor and House. 0
 

Total Changes ($216,000,100)
  FY 2011-12 Enacted Gross Appropriation $1,362,278,400
FY 2011-12 HIGHER EDUCATION BUDGET BOILERPLATE HIGHLIGHTS

Changes from FY 2010-11 Year to Date:
  Items Included by the Senate and House
1. Restored Sections. Compliance with the DMB Act, use of Internet for reporting, buy American, depressed and deprived communities, the U of M Douglas Lake Biological Station, GI Education Enhancement Program (Conference included intent that universities include in admission application process a question regarding veteran or active military/national guard/reserve status, or the spouse or dependent thereof, in order to more quickly identify potential educational assistance available to that applicant), new degree programs, and various reporting requirements.
2. Deleted Sections. The Governor, House, and Senate deleted Tuition Tax Credit notification, intent regarding per-student floor funding, Macomb County Report, research technology report, and urban centers.
3. New Sections. Reports on efforts to accommodate religious beliefs of students enrolled in accredited counseling degree programs, and reports on stem cell research were added by the House and Senate. (Sec. 273 & 274) School Aid Fund revenue proration mechanism included by Governor, House, and Senate. (Sec. 296)
Conference Agreement on Items of Difference
4. Research University. Defines. House deleted. Senate modified to include "high" research. Conference included Senate change and also included "doctoral" research in the definition. (Sec. 237A)
5. Foreign Vehicle. Prohibits lease or purchase if competitively priced/comparable quality Michigan/USA automobiles available. Governor and House removed; Senate and Conference included. (Sec. 239A)
6. Budget Transparency. House and Conference added more detailed reporting. (Sec. 245)
7. Grant Programs. House and Conference adjusted maximum grant award to reflect current amounts. Governor and House adjusted TIP allocations; Conference revised quarterly allocation for all programs. (Sec. 251, 252 & 254)
  8. Tuition Restraint - Criteria. Included by Governor, House, and Conference; deleted by Senate. (Sec. 265)
9. Funding Formula. Beginning FY 2012-13, university funding shall be allocated by formula developed by the Budget Director. Senate deleted. House and Conference included formula - developed by the Legislature. (Sec. 266)
10. Purchases of Goods and Services. Requires public universities to coordinate purchases of goods and services whenever possible. Requires report. Governor and House deleted; Senate and Conference restored. (Sec. 270A)
11. Academic Program Accreditation. House and Conference section requiring report on direct expenditures for academic program accreditation. (Sec. 271)
12. Transfer Credit Reporting. House and Conference require universities to report regarding the number of transfer credits rejected for incoming students, reported both by academic area and prior institution. (Sec. 272)
13. Adult Co-resident Health Benefits-5.0% Penalty. House language would withhold 5.0% of amount appropriated to each university unless the university verifies that it is not providing fringe benefits for any adult co-resident of a university employee who is not married to that employee or a dependent of such an adult co-resident. Conference replaced with legislative intent that benefits not be provided, removes penalty, and requires report. (Sec. 274A)
14. Joint Capital Outlay Subcommittee (JCOS) Requirements. Senate and Conference included 1.0% penalty for each violation of JCOS requirements. House included different penalty. (Sec. 275A)
15. Community College Issues. The House revised current-year language to create a committee to improve transferability of core college courses between community colleges and universities on a statewide basis. Senate and Conference maintained current-year language. (Sec. 285) House and Conference included a new section stating intent that universities work with community colleges to implement transfer of credits from a university to a community college to enable award of credentials. (Sec. 286)
16. Anticipated Appropriations for FY 2012-13. Governor and House included line-item appropriations for FY 2012-13. Senate and Conference did not include line items, and instead included boilerplate stating intent to fund at the FY 2011-12 level, except for adjustments for economics, caseloads, Federal match rates, and available revenue. (Sec. 236A)
17. University Financial Aid. Intent that universities increase expenditures for financial aid by at least the same percentage as increases in tuition and fees. Senate included; Governor, House, and Conference deleted.

Date Completed: 6-22-11 Fiscal Analyst: Bill Bowerman hieducomn_en.docx