SCHOOL AID SUPPLEMENTAL                                                     H.B. 4295 (S-1, Draft 1):

                                                                                   SUMMARY OF SUBSTITUTE BILL

                                                                                                         IN COMMITTEE

 

 

 

 

 

 

 

House Bill 4295 (Substitute S-1, Draft 1)                                

Sponsor:  Representative Joe Haveman

House Committee:  Appropriations

Senate Committee:  Appropriations

 

Date Completed:  3-12-14

 

CONTENT

 

House Bill 4295 (S-1, Draft 1) is a fiscal year (FY) 2013-14 school aid supplemental bill that would make technical cost adjustments based on newer data and consensus estimates, and would appropriate funding for new programs and increases in existing programs. Overall, the Senate substitute would reduce Gross appropriations by $14.4 million, spend $42.9 million more than the Governor's recommended supplemental, and spend $32.0 million more than the House.

 

Specifically, the bill would make technical cost corrections in the areas identified in Table 1, based on newer data and estimates agreed to at the January 2014 Consensus Revenue Estimating Conference, which have been accounted for in estimates of year-end balances. In addition, the bill would appropriate funding for the new programs identified in Table 2.

 

Table 1:  Technical Cost Corrections

 

 

Appropriation Item

 

Fund Source

Amount Included by Governor

Amount Included by House

Amount Included by Senate

Foundation Allowances

SAF

GF/GP

  ($49,150,000)

      ($250,000)

  ($49,150,000)

      ($250,000)

  ($49,150,000)

      ($250,000)

Special Education

SAF

  ($60,600,000)

  ($60,600,000)

  ($60,600,000)

MPSERS Costs Dissolved Districts

SAF

     $2,200,000

     $2,200,000

     $2,200,000

Cash Flow Borrowing Costs

SAF

   ($1,500,000)

   ($1,500,000)

   ($1,500,000)

Totals by Fund Source

SAF

GF/GP

($109,050,000)

      ($250,000)

($109,050,000)

      ($250,000)

($105,150,000)

   ($4,150,000)

 

Table 2:  New or Increased Funding

 

 

Appropriation Item

 

Fund Source

Amount Included by Governor

Amount Included by House

Amount Included by Senate

RTTT Early Learning Challenge Grant

Federal

$51,737,500

$51,737,500

$51,737,500

Increase in At-Risk Funding

SAF

$0

$0

$30,000,000

Dissolved District Transition Grants

SAF

$0

$5,000,000

$5,000,000

Information Technology Certifications

GF/GP

$0

$3,900,000

$3,900,000

Year-Round School Grants

SAF

$0

$2,000,000

$2,000,000

Increase in Small Class Size Grants

SAF

$0

$0

$2,000,000

Health and Nutrition Education Software

GF/GP

$0

$100

$0

Advanced Placement Incentive Program

GF/GP

$250,000

$250,000

$250,000

Totals by Fund Source

Federal

SAF

GF/GP

$51,737,500

$0

$250,000

$51,737,500

$7,000,000

$4,150,100

$51,737,500

$39,000,000

$4,150,000

SAF = School Aid Fund

GF/GP = General Fund/General Purpose


The Federal Race to the Top Early Learning Challenge Grant was awarded to the State for the sole purpose of increasing the number of low-income and disadvantaged infants, toddlers, and preschoolers enrolled in high-quality early learning programs. Activities funded from the $51.7 million grant under proposed Section 32r would have to focus on six areas: 1) increasing access to programs; 2) increasing opportunities for licensed and unlicensed subsidized home care providers to improve the quality of their programs; 3) improving families' engagement in their children's early learning and development; 4) expanding efforts to identify and promote children's physical, social, and emotional health; 5) increasing professional development opportunities for early learning care providers; and, 6) developing an early learning data system to monitor and evaluate quality standards of individual programs. Funding for this program also was recommended by the Governor.

 

Increased funding of $30.0 million would be provided in the At-Risk categorical. Current funding of this categorical totals $309.0 million; the $30.0 million increase would represent a 9.7% increase overall, and would reduce the existing proration from an estimated $307 per free-lunch eligible pupil to $256 per free-lunch eligible pupil.

 

Increased funding of $5.0 million for dissolved district transition grants would be earmarked to provide reimbursement to eligible districts for costs incurred by the eligible district associated with the transfer of property from a dissolved school district to the eligible district. Allowable uses for the reimbursement would include maintenance, utilities, security, or insurance associated with, or the demolition of, buildings transferred from a dissolved district to an eligible district. Not more than $2.5 million could be reimbursed in total for property transferred from each dissolved district (Buena Vista and Inkster).

 

New funding of $3.9 million for information technology certifications would be appropriated under proposed Section 64d for a contract with a single provider to provide information technology education opportunities to high school, career academy, and community college students. Participating students would be allowed to achieve broad-based information technology (IT) certifications and college credit, with the program providing instruction on IT skills and competencies essential for the workplace, and made available through districts, intermediate districts, career academies, and community colleges. The Department would be required to ensure that the request for proposals was delivered to all community colleges, and, if the contract were not awarded to a community college or group of colleges, the Department would have to provide an interactive response to the proposal to the colleges.

 

Increased funding of $2.0 million would be provided to districts that received class size reduction grants. Beginning in FY 2011-12, these grants were reduced by 31.5%. The $2.0 million proposed in the supplemental would provide, for FY 2013-14, additional payments equal to roughly 17.6% of the adjustment eligible districts are currently receiving.

 

Proposed new funding of $2.0 million for year-round school grants would provide dollars to at-risk districts for implementing a year-round instructional program in at least one school building. Under the new language, the Department of Education would be instructed to select districts that are eligible in FY 2013-14 for the Community Eligibility Option for free and reduced price lunch and that have adopted a resolution that the district will implement for the first time a year-round instructional calendar beginning in FY 2014-15 in at least one school building, and commit to year-round schooling for at least three years. Districts would apply by April 1, 2014, and be notified by May 1, 2014, with grant priority given to districts with lower general fund balances as a percentage of revenue and districts that operate at least one school building identified as either a priority school or a focus school, and ensuring that funding would include both rural and urban districts. The amount of a grant to any one district could not exceed $750,000, and funding would be for necessary modifications to instructional facilities, modifications to current contracts, and other nonrecurring costs of preparing for the operation of a year-round instructional program.


 

New funding of $250,000 would be allocated to the Department of Education under proposed Section 94 for efforts to increase the number of low-income pupils who participate and succeed in Advanced Placement and International Baccalaureate programs, by covering all or part of the costs of the test fees, not to exceed $20 per test completed. Funding for this program also was recommended by the Governor.

 

Table 3 identifies the overall spending in House Bill 4295 (S-1, Draft 1), combining the technical cost adjustments and the funding recommendations for new items.

 

Table 3:  Gross Funding Changes Combining Technical Adjustments and New Items

 

 

Gross Changes

 

Fund Source

 

Amount Included by Governor

 

Amount Included by House

Amount Included by Senate

Total Appropriations

Gross

Federal

SAF

GF/GP

      ($57,312,500)

       $51,737,500

     ($109,050,000)

                     $0

      ($46,412,400)

       $51,737,500

     ($102,050,000)

         $3,900,100

      ($14,412,500)

       $51,737,500

      ($66,150,000)

                     $0

 

Boilerplate Changes

 

House Bill 4295 (S-1, Draft 1) proposes several changes to boilerplate in the School Aid Act. First, the bill would amend Section 21f to allow intermediate school districts (ISDs), in addition to local districts, to offer online courses. The bill would amend Section 22g to allow districts and ISDs to seek consolidation incentive grants for the consolidation of services, in addition to the consolidation of operations. The bill would amend Section 99h to allow unspent FIRST Robotics funding to be carried forward into FY 2014-15 as a work project. The bill would amend Section 101 to delay the increase in the days of instruction scheduled for FY 2014-15 (from 170 to 175) if a collective bargaining agreement were in place providing for fewer days of instruction. The increased days of instruction then would be implemented in the school year after that collective bargaining agreement expired. A similar delay in implementation is proposed for the upcoming change under which districts will no longer be able to count up to 38 hours of professional development as hours of instruction, beginning in FY 2014-15, if an existing collective bargaining agreement were in conflict with this change.

 

MCL 388.1611 et al.                                                                                                 

 

FISCAL IMPACT

 

The bill would decrease Gross spending by $14.4 million as proposed under Substitute S-1, Draft 1. However, this is a combination of an increase in Federal funds of $51.7 million, and a decrease in School Aid Fund spending of $66.2 million.  (Note that two items are proposed to be funded with GF/GP dollars because they are not provided to schools, but because the overall level of GF/GP funding in the bill is not increased, the cost for the two items, information technology certifications and grants for Advanced Placement testing costs, is ultimately borne by the School Aid Fund.) The bill as proposed would spend $42.9 million more than the supplemental recommended by the Governor, and would spend $32.0 million more than the supplemental as passed by the House.

 

                                                                                   Fiscal Analyst:  Kathryn Summers

 

 

 

 

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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.