FY 2016-17 COMMUNITY COLLEGES BUDGET S.B. 784 (S-1): SENATE APPROPRIATIONS REC.
Senate Bill 784 (S-1 as reported) Throughout this document Senate means Appropriations Committee.
Committee: Appropriations
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$387,825,600 |
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1. Performance Funding. Governor included a $7.5 million GF/GP (2.4%) increase for community college operations distributed through a modified version of the Performance Indicators Task Force Formula. Section 230a of Public Act 85 of 2015 created a Task Force to review, evaluate, discuss, and make recommendations regarding performance indicators established under the authority of Section 242 of Public Act 154 of 2005. The Task Force report was completed on January 15, 2016. Governor used the Task Force recommendations, but modified the performance metrics as shown in Table 1. Senate maintained overall 2.4% increase but allocated funds based on 2016 Performance Indicator Review Task Force recommendations and did not include Governor's modifications to the formula. Tables 2 provides a comparison of current year, the Governor's recommendation, and the Senate. Table 3 includes detail of Senate formula allocations by college. |
7,500,000 |
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2. Michigan Public School Employees Retirement System (MPSERS) Rate Cap. Governor and Senate included $3.7 million School Aid Fund (SAF) to continue funding the difference between the employer's capped contribution rate for unfunded accrued liabilities (20.96%) and the actual unfunded actuarial accrued liability contributions rate. MPSERS reform legislation requires the State to pay the difference between these amounts. The FY 2016-17 MPSERS appropriation totals $73.2 million. |
3,700,000 |
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3. Other Changes. Governor and Senate shifted $52.3 million SAF from college operations ($50.7 million) and renaissance zone reimbursements ($1.6 million) to the MPSERS appropriation to effectively fund the entire MPSERS appropriation from the SAF. The FY 2016-17 community college budget includes $138.6 million State General Fund and $260.4 SAF. |
0 |
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4. Comparison to Governor's Recommendation. Senate is $0 Gross and $0 GF/GP over/under the Governor. |
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$11,200,000 |
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FY 2016-17 Senate Appropriations Committee Gross Appropriation....................................... |
$399,025,600 |
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Boilerplate Changes from FY 2015-16 Year-to-Date: |
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1. 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, projected general fund revenue and expenditures and debt service obligations, estimated costs incurred due to Affordable Health Care Act (ACA), opportunities for earning college credit through dual enrollment and compliance with best practices. Includes certain format requirements consistent with K-12 reporting. Provides that the State Budget Director determines compliance and allows for withholding of State aid payments for noncompliance. Governor eliminated estimated costs of ACA, and the State Budget Director's authority to determine compliance and withhold funds for failure to comply with transparency site requirements. Senate restored provisions eliminated by the Governor. (Sec. 209) |
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2. Block Transfers (30 Credits). States legislative intent that the Michigan Association of Collegiate Registrars and Admission Officers implement agreements among the community colleges and universities concerning the transferability of college courses resulting from the recommendations of the committee created under former section 210a (Block Transfers/30 Credits). Requires implementation update report by March 1, 2016. Governor replaced this section with language requiring the Michigan Community College Association and the Michigan Association of State Universities to submit a progress report on implementation by March 1, 2017 that specifically includes a summary of implementation issues faced by the institutions and strategies being considered to remedy those issues, and an update on progress made on outstanding issues identified in the March 1, 2016 report. Senate included the Governor's changes and added a separate reporting requirement regarding improvements to articulation and credit transfer policies among and between all sectors of postsecondary education pursuant to requirements included in former section 210c (Block Transfers/60 credits). (Sec. 210b) |
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3. Block Transfer Study Committee (60 Credits). Governor deleted the section that created a study committee to develop a process to improve the transferability and applicability of associate of arts and associate of science degrees as a block of credits between community colleges and public universities on a statewide basis. The committee was charged with exploring standards for program articulation between institutions so that an associate of arts or associate of science degree earned at a community college is considered the equivalent of the first 60 credits of a baccalaureate degree, and those credits can be seamlessly transferred and applied to the program of study at the receiving university. A report from the committee was required by March 1, 2016. Senate concurred with the Governor, but added a requirement for a report updating progress made on this issue (Item #2 above). |
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4. Academic Program Partnerships. Senate added language that requires Michigan Community College Association, the Michigan Association of State Universities, and the Michigan Independent Colleges and Universities, on behalf of their member colleges and universities, to submit a comprehensive report detailing the number of academic program partnerships between public community colleges, public universities, and private colleges and universities. (Sec. 210e) |
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5. Performance Indicators Task Force. Delineates formula originally based on 2006 recommendations of the Performance Indicators Task Force. Lists metrics and sets criteria for Local Strategic Value component of the formula and requires certification of compliance by each college through a board of trustees' resolution. Governor updated this language based on the recommendations contained in the January 15, 2016 report of the Performance Indicators Review Task Force, with certain modifications. See Table 1 for details. The Governor's distribution is as follows: a. 30.0% Proportionate to Base b. 30.0% Weighted Contact Hours c. 20.0% Weighted Degrees d. 10.0% Completion Improvement e. 5.0% Administrative Costs f. 5.0% Local Strategic Value The Senate implemented Task Force recommendations without the Governor's modifications. Senate distribution is as follows: a. 30.0% Proportionate to Base b. 30.0% Weighted Contact Hours c. 30.0% Performance · 10.0% Completion Improvement · 10.0% Number of Completions · 10.0% Completion Rate d. 5.0% Administrative Costs e. 5.0% Local Strategic Value |
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6. Restored Provisions. Senate restored the following sections that were deleted by the Governor: Anticipated appropriations for subsequent fiscal year (Sec. 201a); prohibits use of appropriations for construction or maintenance of self-liquidating projects and requires compliance with Section 238 of the Management and Budget Act and Joint Capital Outlay Subcommittee use and finance requirements – includes penalty for noncompliance (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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7. Deleted Provisions. Governor and Senate eliminated the Block Transfer Study Committee (Sec. 210c), and the Performance Indicators Review Task Force (Sec. 230a). |
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8. Other Changes. Governor and Senate modified several sections based on the Center for Educational Performance and Information (CEPI) assuming responsibility for the community college Activities Classification Structure (Secs. 203, 206, 217, 222, 225, and 226). |
Table 1
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Performance Indicators Comparison Current Formula, Task Force Recommendation, and Governor's FY 2016-17 Recommendation |
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Metric |
Current Formula |
Task Force Recommendation1) |
Governor's Recommendation |
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System Sustainability/ Increase proportionate to base (across-the-board adjustment) |
50.0% |
30.0%
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30.0% |
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Contact Hours |
10.0% Contact hours not weighted. |
30.0%. Weighted (contact hours in health and technology 2x). |
30.0%. Weighted (contact hours in health and technology 2x). |
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Performance |
17.5% Weighted Degree/Certification Completion. |
30.0% as follows: · 10.0% Completion Improvement; · 10.0% Number of Completions; · 10.0% Completion Rate. |
30.0% as follows: · 20.0% Weighted Degree/Certification; · 10.0% Modified Completion Improvement. |
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Administrative Costs |
7.5% |
5.0% |
5.0% |
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Local Strategic Value |
15.0% |
5.0% |
5.0% |
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Total |
100.0% |
100.0% |
100.0% |
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Formula Methodology2) |
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Proportionate to Base |
65.0% |
51.0% |
35.0% |
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Metrics |
35.0% |
49.0% |
65.0% |
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1) Performance Indicators Review Task Force Findings and Recommendations, January 15, 2016, pursuant to Section 230a of Public Act 85 of 2015. 2) Across-the-board (proportionate to base) distributions for the current formula include: 50.0% System Sustainability and 15.0% Local Strategic Value. Across-the-board distributions for the MCCA proposal include 30.0% System Sustainability, 16.0% Hold Harmless (portion of performance funding), and 5.0% Local Strategic Value. Across-the-board distributions for Governor's recommendation include 30.0% System Sustainability and 5.0% Local Strategic Value. |
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Date Completed: 4-15-16 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.