0949: CONFERENCE REPORT (Date Completed: 5-29-12) - FY 2012-13 COMMUNITY COLLEGES BUDGET

FY 2012-13 COMMUNITY COLLEGES BUDGET S.B. 949 (CR-1*): CONFERENCE REPORT

FY 2011-12 Year-to-Date Gross Appropriation.....................................................................

$283,880,500

Changes from FY 2011-12 Year-to-Date:
Items Included by the Senate and House
1. There are no Items of Agreement for appropriations line items.
Conference Agreement on Items of Difference
2. Performance Funding. Governor included an $8,516,400 (3.0%) GF/GP increase to community colleges allocated through a new formula based on the average number of completions of associate degrees and certificates below baccalaureate in critical skills areas (3-year average for FY 2008-09, FY 2009-10, and FY 2010-11). Critical skills areas include: science, technology, engineering, mathematics, and health fields. Senate did not concur with Governor’s proposed distribution. Senate continues using the Performance Indicators Taskforce recommendations to allocate additional funding. The local strategic value component was modified to allocate funds based on community colleges meeting certain best practice requirements. Senate allocations are based on the following: 50% proportionate to FY 2011-12 base; 10% contact hour equated students; 7.5% administrative costs; 17.5% weighted degrees; 15.0% local strategic value. House did not include formula distributions and instead allocated additional funds across-the-board and earmarked funding for MPSERS costs. Conference concurred with Senate distribution, but earmarked increase for MPSERS costs. Table 1 and Table 3 list details.	8,516,400
3. Michigan Public School Employees Retirement System (MPSERS) Health Costs. Governor and Senate included $1,733,600 from the School Aid Fund for the purpose of offsetting the increase in MPSERS retirement contributions attributable to the 0.25% increase in retiree health care costs. Distributions were to be based on the FY 2011-12 MPSERS payroll. House included the appropriation but allocated the funds across-the-board instead of basing distributions on MPSERS payroll. Conference concurred with House distribution. Table 2 shows the estimated difference between the distribution methods.	1,733,600
4. School Aid Fund. Senate shifted $96,516,400 from the State General Fund to the School Aid Fund, leaving no General Fund appropriation in the community college budget. House did not include the funding shift. Conference concurred with the House.	0
5. Renaissance Zone Reimbursements. Senate included a placeholder for Renaissance Zone tax reimbursements pursuant to Public Act 376 of 1996. The estimated cost of these reimbursements is $3.5 million. Leadership agreement included funding in the Department of Treasury budget.	0
6. Budget Format. House included all additional funding in a separate appropriation unit, total of $10,250,000 ($8,516,400 GF/GP the Governor recommended for performance funding, and $1,733,600 SAF that the Governor recommended to offset a portion of MPSERS costs). Conference included the $8,516,400 in college operations line items, and the $1,733,600 in a separate section.	0

Total Changes.....................................................................................................................	$10,250,000
FY 2012-13 Conference Report Ongoing/One-Time Gross Appropriation.............................	$294,130,500
Amount Over/(Under) GF/GP Target: $0

FY 2012-13 COMMUNITY COLLEGES BUDGET BOILERPLATE HIGHLIGHTS

Changes from FY 2011-12 Year-to-Date:

Items Included by the Senate and House

1. Performance Funding Calculations. Governor included new language basing allocations of new funding on the average number of completions of associate degrees and certificates in critical skills areas (3-year average for FY 2008-09, FY 2009-10, and FY 2010-11). Provides that community colleges shall report to the Center for Educational Performance and Information (CEPI) the number of students in the most recently completed academic year that transferred to a 4-year college or university and states that data will be used in the FY 2013-14 formula. Senate & House did not include this section. (Sec. 206(b))

2. State Building Authority Rent. Governor, Senate, & House included new language listing amounts paid by the State for previously constructed capital projects for each community college. (Sec. 229(a))

3. Restored Sections. Senate & House restored the following sections that were deleted by the Governor: Buy America intent (Sec. 204), report on budget revenue sources, expenditures and other data (Sec. 209(5)), encourages community colleges to achieve efficiencies (Sec. 212), prohibits purchase of foreign automobiles (Sec. 227), and prohibits disciplinary action against an employee for communicating with the Legislature (Sec. 228).

4. Deleted Sections. Governor, Senate & House removed a provision that creates committee to develop a common set of scores using the ACT assessment to determine placement in developmental courses at community colleges. (Sec. 214)

Conference Agreement on Items of Difference

5. Anticipated Appropriations Subsequent Fiscal Year. Governor replaced this section with line items for FY 2013-14. Senate & House did not include line items and restored this section. House changed Revenue Estimating Conference to May instead of January. Conference concurred with Senate. (Sec. 201(a))

6. Payment Distribution Schedule. Governor authorized withholding funds for failure to provide P-20 data. Budget Director shall determine compliance. Senate concurred with Governor and also added a notice requirement 10 days prior to withholding funds. House did not include notice requirement. Conference concurred with Senate. (Sec. 206)

7. Transparency. Governor eliminated language requiring community colleges post on the Internet a comprehensive report categorizing all institutional G/F expenditures by fiscal year (including a listing of all employee positions by position title, name, and annual salary) and report on budgeted revenue and expenditures. Senate revised by eliminating listing of names and salaries and added standard reporting on college website with additional information required including budget revisions, expenditures, employee costs, employee health care plans, links to collective bargaining agreements, enrollments, student retention, financial aid information, faculty to student ratios, graduation outcome rates, best practices, and also included penalty of withholding State aid payments for noncompliance. House restored section and added to the reporting requirements, including total number of full time faculty, total students enrolled, and the number of students receiving a degree in the most recent academic year. Conference modified Senate language by removing certain format requirements, modifying information requirements and linking certain data to existing information in the Activities Classification Structure. (Sec. 209)

8. P-20 Longitudinal Data System. Requires community colleges receiving funds under this act to cooperate with the State to comply with the provisions of the American Recovery and Reinvestment Act (ARRA) of 2009 requiring the establishment of a statewide P-20 Longitudinal Data System. Governor and Senate changed shall “cooperate” to shall “comply”. Removed reference to ARRA. House and Conference eliminated current year language and required colleges to provide their longitudinal data system data set for the preceding academic year to CEPI by June 30 of each year. (Sec. 219)

9. Student Academic Status. Governor, Senate, and Conference modified this language by requiring community colleges to cooperate with CEPI to design and implement a system to accomplish this work. (Sec. 224)

10. Restored Sections. Conference restored Depressed and Deprived intent (Sec. 205); compliance with JCOS use and finance requirements and penalty provisions (portion of Sec. 208); collaboration with four-year universities, local employers, and other community colleges (Sec. 210); intent that performance task force indicators be reviewed and more fully implemented for distribution of State funding in future years - Senate and Conference modified this section to reflect FY 2012-13 adjustments to the formula (Sec. 230); creates committee to develop a process to improve the transferability of core college courses between colleges and universities - House and Conference revised membership and added report (Sec. 210(a)); and review statutory mandates (Sec. 216).

11. Other Changes. Conference concurred with Governor and Senate by removing intent language for colleges to promote equal opportunity. (Sec. 211)

Date Completed: 5-29-12 Fiscal Analyst: Bill Bowerman

This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.