On Wednesday, June 30, the Michigan Senate passed what appears to be the final version of the 2021-22 School Aid Fund budget (HB 4411). Just now, the House voted to concur in the Senate-passed bill, sending it to Governor Whitmer’s desk for signature. The bill contains a few key changes from the version that passed the House last week, but the biggest items remain largely unchanged. Most importantly, this budget – just like the version that passed the House last week – will completely close the gap between the minimum and maximum foundation allowance and set the new, universal foundation allowance at $8,700 per pupil. The Senate also adds money targeted at districts that operate on a balanced calendar and tags dollars for what amounts to a voucher program for reading tutors. A very few line-item vetoes are possible, so what gets signed into law could change slightly, but districts should be able to take the bulk of this bill to the bank.

2021-22 K-12 Budget

  • $683 million to fully fund an $8,700 per pupil foundation allowance for every school in the state. The Senate also provides additional money to ensure that every district in the state – including hold harmless districts – get at least $171 per pupil more this year than they did last year regardless of what their foundation allowance is.
  • A new $240 million line item to provide funding for districts with the greatest need to hire school psychologists, social workers, counselors, and nurses. The money would provide funding for staff hired under this section at 100% for the first year, 66% for the second year, 33% for the third year, and requires a recipient district to fully fund staff after three years of funding. District need is to be determined by the department based on student to staff ratios for the positions in question.
  • $135 million for a pair of programs aimed at supporting districts with a balanced calendar: $75.0 million in one-time federal dollars for HVAC (and other capital) improvements for districts operating balanced year-round calendars, and $60.0 million in state monety to provide a 3% foundation allowance increase for ongoing operational cost increases for districts operating a balanced calendar. Coming this late in the process, it seems likely that this is intended more as a reward for districts who have already adopted a balanced calendar rather than an incentive for new districts to move to a balanced calendar.
  • $11.5 million for benchmark assessments for the 2022-23 school year. Provides a payment of $12.50 per pupil in grades K-8 to each eligible district. Requires a recipient district to pledge to administer benchmark or local benchmark assessments to all pupils in grades K-8 within the first nine weeks of school and again by the last day of the 2022-23 school year. The language also adds some new boilerplate requiring districts to report some disaggregated benchmark assessment data to MDE and post that information on their district website.
  • Increases funding for school mental health programs (section 31n) by $12 million for a total of $48.9 million and adds language to allow districts to hire providers with less than a master's degree if certain conditions are met.
  • Increases funding for bilingual education by $12.2 million, effectively doubling the state's allocation for bilingual education to $25.2 million.
  • $30 million to increase the special education reimbursement rate to an estimated 3% of total approved special education costs (previously, this line item reimbursed 2% of costs, so this is an increase in that reimbursement rate of 1 percentage point).
  • $10 million for competitive school safety grants for public and nonpublic schools, districts, and ISDs to create a safer school environment through equipment and technology enhancements. Caps grants at $50,000 for a school and $250,000 for a district or ISD.
  • $155 million in federal funds for reading scholarships to be administered by Grand Valley State University. This amounts to a $1,000 per child "reading scholarship" voucher that parents could use for tutoring services, summer programming, or a number of other similar items. If anything in this budget is going to be vetoed, expect this program to be on the chopping block.
  • Increases funding for the Great Start Readiness Program by $168.5 million to increase the allocation per child from $7,250 to $8,700 for a full-day program—an amount equal to the proposed foundation allowance—and from $3,625 to $4,350 for a part- day program.

Next Steps

The 2021-22 budget now heads to Governor Whitmer for her signature. It is possible that Governor Whitmer could line-item veto some elements of the budget that passed the Legislature today, but since her staff has been at the table during negotiations, don't expect the festival of vetoes we saw two years ago. 

It will take the Governor's legal team and policy staff some time to work through a bill of this size (which they always do, with every bill before the Governor signs), but expect that process to move pretty quickly. In the meantime, final budget documents are linked below for members' review.

Summary of K-12 Budget Bill

Full Text of HB 4411 (S-1)