FY 2013-14 COMMUNITY COLLEGES BUDGET S.B. 199 (S-1, Draft 1): SENATE SUBCOMMITTEE REC.
Senate Bill 199 (S-1, Draft 1 as reported) Throughout this document Senate means Subcommittee.
Committee: Appropriations
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$294,130,500 |
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1. Performance Funding. The Governor included a $5.8 million GF/GP (2.0%) increase for community college operations distributed through a modified version of the Performance Indicators Task Force Formula. The Governor removed $1,277,500 allocated to community colleges in FY 2012-13 based on local strategic value and reallocated those funds based on his proposed FY 2013-14 formula distribution. This would result in a total of $7,124,600 being distributed through the Governor's proposed formula. The Governor replaced the local strategic value component of the formula with a new allocation based on the number of skilled trades program students placed in a relevant job or apprenticeship, with extra weighting for placing a student-veteran. The Senate maintained FY 2012-13 base appropriations for community colleges and distributed the FY 2013-14 $5.8 million increase based on the current Performance Indicators Task Force Formula. Table 1 provides details by community college. |
5,847,100 |
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2. Michigan Public School Employees Retirement System (MPSERS) Rate Cap. The Governor included $31.4 million GF/GP to fund the difference between the employer's capped contribution rate for unfunded accrued liabilities (20.96%) and the actual unfunded actuarial accrued liability contribution rate. MPSERS reform legislation requires the State to pay the difference between these amounts. |
31,400,000 |
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3. MPSERS Retiree Health Care. In FY 2012-13 the Governor recommended a $1,733,600 appropriation from the School Aid Fund for the purpose of offsetting a portion of MPSERS retirement contributions attributable to retiree health care costs. Distributions were to be based on the FY 2011-12 MPSERS payroll. The FY 2012-13 enacted budget included the funding, but allocated funds to community colleges on an across-the-board basis. The Governor and Senate continue funding, but distribute the funds based on college MPSERS payroll. Table 2 delineates the estimated difference in allocation methods. |
0 |
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4. Virtual Learning Collaborative. The Virtual Learning Collaborative (VLC) provides access to courses offered by all Michigan public community colleges. In 2009 the Michigan Community College Association (MCCA) Board of Directors approved an affiliate membership for four-year institutions. To date, Lawrence Tech and Grand Valley State University have become members. The new State funding will be used for the development of course aggregator software, development of a "pathway to credential" tool that will identify courses toward a career path, develop analytics software that informs colleges of course demand for decision making of future offerings, and development of a repository of online courses and resources for use by faculty at member institutions. |
1,100,000 |
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5. Renaissance Zone Reimbursements. The Governor included $3.5 million GF/GP for Renaissance Zone tax reimbursements. This appropriation was included in the Department of Treasury budget in FY 2012-13 at the same level of funding. |
3,500,000 |
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6. Comparison to Governor's Recommendation. The Senate is $0 Gross and $0 GF/GP over/under the Governor. |
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$41,847,100 |
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FY 2013-14 Senate Appropriations Subcommittee Gross Recommendation........................ |
$335,977,600 |
FY 2013-14 COMMUNITY COLLEGES BUDGET BOILERPLATE HIGHLIGHTS
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Changes from FY 2012-13 Year-to-Date: |
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1. MPSERS Reimbursements. Provides that the appropriation for MPSERS Reimbursement shall be distributed based one each college's MPSERS payroll. See item #3 on previous page. (Sec. 201 (4)) |
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2. MPSERS Reform Costs. Provides that appropriation for MPSERS reform costs shall be used for payment of the difference between the unfunded actuarial accrued liability contribution rate calculated pursuant to the MPSERS Act and the statutory maximum employer rate of 20.96%. See item #2 on previous page. (Sec. 201 (5)) |
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3. Renaissance Zone Reimbursements. Provides for distribution pursuant to Public Act 376 of 1996. (Sec 201 (6)) |
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4. Virtual Learning Collaborative. Provides that funds appropriated for this one-time project be distributed to the Michigan Community College Association for the purposes of enhancing the Virtual Learning Collaborative. Requires report on use of funds upon request. (Sec. 201 (7)) |
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5. Transparency. Requires each community college to make available through links on its website homepage its annual operating budget, links to the most recent activities classification structure report, current collective bargaining agreements, health care plans, audits and financial reports, revenues and expenditures, and compliance with best practices. State Budget Director shall determine compliance and allows for withholding of State aid payments for noncompliance. The Governor added projected General Fund revenue, expenditures, and debt service obligations, removed posting of Board of Directors best practices compliance resolution, and replaced "shall" with "may" regarding the Budget Director determining compliance. The Senate included Governor's recommendation regarding posting projected expenditures and debt service obligations, but did not include other recommended changes. The Senate also added reporting of estimated costs incurred due to the Affordable Health Care Act. (Sec. 209) |
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6. Collaborations with Four-Year Universities. Encourages community colleges to increase collaboration with universities, local employers, and other community colleges. Governor and Senate added the goal of developing equivalency standards of core college courses and identifying equivalent courses offered by institutions. (Sec. 210) |
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7. Performance Indicators Task Force. The Governor modified this section by tying Local Strategic Value (best practices) to the receipt of all performance funding and using 15% of the formula previously allocated for Local Strategic Value to a new Skilled Trades Jobs Placement category. Funds resulting from a college's failure to qualify for performance funding would lapse to the General Fund. The Governor also removed intent language regarding use of the formula in future years and removed the earmark of funding increases for retirement costs. The Senate concurred with removal of language earmarking increases for retirement costs, but maintained the current formula distribution and did not include the Governor's other proposed changes. (Sec. 230) Performance Indicators Task Force Distribution • 50% proportionate to FY 2012-13 base • 10% contact hour equated students • 7.5% administrative costs • 17.5% weighted degrees • 15.0% local strategic value |
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8. Skilled Trades Jobs Placement. Requires a report by February 1, 2014, on the number of students that successfully completed a skilled trades program and obtained an apprenticeship or job in a field related to that skilled trades program, for fiscal year 2012-2013. The report shall also indicate the number of these students that are veterans of the United States armed forces. (Sec. 229b) |
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9. Restored Provisions. The Senate restored the following sections that were deleted by the Governor: Second-year appropriation intent language (Sec. 201a); buy American/buy Michigan intent language (Sec. 204); depressed and deprived communities compete for and perform college contracts (Sec. 205); prohibits use of appropriations for construction or maintenance of self-liquidating projects, requires compliance with JCOS use and finance requirements, and includes penalty for noncompliance – Senate modified based on enacted capital outlay reforms (Sec. 208); encourages community colleges to achieve efficiencies through collaborations (Sec. 212); prohibition on use of appropriations for purchase or lease of foreign automobiles (Sec. 227); and prohibition on disciplinary action against an employee for communicating with a member of the legislature or legislative staff. (Sec. 228) |
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10. Deleted Provisions. The Governor and Senate deleted: committee to develop a process to improve transferability of core college courses between colleges and universities (Sec. 210(a)); and intent regarding review by interested parties of statutory mandates. (Sec. 216) |
Date Completed: 4-9-13 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.