0949: SENATE-PASSED (Date Completed: 4-27-12) - FY 2012-13 COMMUNITY COLLEGES BUDGET

FY 2012-13 COMMUNITY COLLEGES BUDGET S.B. 949 (S-1): SENATE-PASSED

Senate Bill 949 (S-1 as passed by the Senate)

Committee: Appropriations

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

$283,880,500

Changes from FY 2011-12 Year-to-Date:
1. Performance Funding. Governor included a 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. The source of the data is the United States Department of Education Integrated Postsecondary Education Data System (IPEDS). The Senate did not concur with the Governor’s proposed distribution. The 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. The 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. See Table 1 for distributions.	8,516,400
2. Michigan Public School Employees Retirement System (MPSERS) Health Costs. Governor and Senate included funding from the School Aid Fund for the purpose of offsetting the increase in MPSERS retirement contributions owed by community colleges in FY 2012-13 attributable to the 0.25% increase in costs related to retiree health care. Table 2 provides an estimate of amounts that would be allocated to each community college, based on the FY 2010-11 community college MPSERS payroll, an inflationary adjustment, and the intended allocation methodology. Actual distributions will be based on the FY 2011-12 MPSERS payroll.	1,733,600
3. School Aid Fund. Senate shifts $96,516,400 from the State General Fund to the School Aid Fund, leaving no General Fund appropriation in the community college budget.	0
4. Renaissance Zone Reimbursements. Senate added a $100 placeholder for Renaissance Zone Tax reimbursements pursuant to Public Act 376 of 1996. The last appropriation to community colleges for these payments was in FY 2009-10. The FY 2011-12 cost, if payments were made, is estimated at $3.5 million.	100
5. Comparison to Governor's Recommendation. The Senate is at the Governors recommendation for Gross funding and $96,516,400 under the Governor for General Fund.

Total Changes.........................................................................................	$10,250,100
FY 2012-13 Senate-Passed Gross Appropriation...................................	$294,130,600

FY 2012-13 COMMUNITY COLLEGES BUDGET BOILERPLATE HIGHLIGHTS

Changes from FY 2011-12 Year to Date:

1. Performance Funding Calculations. The Governor included new language basing formula allocations of new funding 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). The source of the data is the United States Department of Education Integrated Postsecondary Education Data System (IPEDS). 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. The Senate did not include this section. (Sec. 206(b))

2. Anticipated Appropriations Subsequent Fiscal Year. Boilerplate stating intent of the Legislature to provide the same level of appropriations for the next fiscal year, except that the line items will be adjusted for changes in caseload and related costs, Federal fund match rates, economic factors, and available revenue. The Governor replaced this section with actual line items for FY 2013-14. The Senate does not include line items and restored this section. (Sec. 201(a))

3. Payment Distribution Schedule. Provides for the payment of funds to colleges in eleven equal monthly payments. Provides for accrual of July and August payments. Withholds payments if Activities Classification Structure (ACS) data are not submitted by November 1. The Governor extended reasons for withholding funds to providing P-20 data and provides that the State Budget Director shall determine compliance with this section. The Senate concurred with the Governor and also added a notice requirement 10 days prior to withholding funds. (Sec. 206)

4. 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. The Governor changed shall “cooperate” to shall “comply”. Removed reference to ARRA. The Senate concurred with the Governor. (Sec. 219)

5. Student Academic Status. Requires community colleges, upon request, to inform interested Michigan high schools of the aggregate academic status of its students for the prior academic year, in a manner prescribed by the Michigan Community College Association and in cooperation with the Michigan Association of Secondary School Principals. The Governor and Senate modified this language by requiring community colleges to cooperate with CEPI to design and implement a system to accomplish this work. (Sec. 224)

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

7. Restored Sections. The Senate restored the following sections that were deleted by the Governor: Buy America intent (Sec. 204), Depressed and Deprived intent (Sec. 205), compliance with JCOS use and finance requirements and penalty provisions (portion of Sec. 208), transparency and budget reporting requirements – this section was modified to reflect standard posting of information consistent with current local school districts requirements (also authorizes the State Budget Director to withhold State aid payments for noncompliance) (Sec. 209(1-4)), report on budget revenue sources, expenditures and other data - the Senate added to list of reporting requirements and specified location of information on college website(Sec. 209(5)), collaboration with four-year universities (Sec. 210), encourages community colleges to achieve efficiencies (Sec. 212), prohibits purchase of foreign automobiles (Sec. 227), prohibits disciplinary action against an employee for communicating with the Legislature (Sec. 228), and intent that performance task force indicators be reviewed and more fully implemented for distribution of State funding in future years – the Senate modified this section to reflect FY 2012-13 adjustments to the formula (Sec. 230).

8. Deleted Sections. The Governor and Senate removed: transferability of core college courses between colleges and universities (Sec. 210(a)), intent for colleges to promote equal opportunity (Sec. 211), creates committee to develop a common set of scores using the ACT assessment to determine placement in developmental courses at community colleges (Sec. 214), and review statutory mandates (Sec. 216).

Date Completed: 4-27-12 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.