Comparing the House, Senate, and Governor's Budget Recs

The House, Senate, and Governor have now all put forward their budget recommendations for the 2022-23 school year. While there is lots of negotiation left to go and plenty of things can change, it is not too early to compare the three budget proposals and form some preliminary projections about what the final budget might look like.

To help Principals get their heads around where things stand, MASSP has created a side-by-side comparison of all three proposals with common spending items grouped thematically to make comparison easier (e.g. we've done a side-by-side comparison of the educator recruitment and retention proposals in all three budgets). Each budget also includes significant components that are unique to that budget and we've laid those out as well.

Big Ticket Items

Bottom line: Expect a foundation increase. A special education increase also seems likely and depending on what the Governor wants to prioritize in negotiations, maybe even an At Risk increase. Whether those increases are large enough to keep up with inflation and rising costs is another story.

Educator Recruitment and Retention

Bottom line: Expect a significant investment in educator recruitment and retention including some sort of funding to make student teaching more affordable. Scholarships for students who enroll in educator preparation programs and funding for grow-your-own educator programs also seems likely.

Student Mental Health and Wellness

Bottom line: There will be a pot of money spent on student mental health and wellness, likely with a focs on expanding existing programs rather than creating new programs. The other thing to note here is that spending on mental health supports is partially driven by an interest in increasing school safety rather than solely on improving student mental health and wellness, so expect that some of what gets funded will have a specific school safety bent.

School Safety

Bottom line: The Oxford shooting is driving a wave of investment in school safety. Districts will have discretion in spending some of that money, but another chunk will likely go into grant programs designed to push districts to hire vendors for certain services.

Other Proposals

The three budget proposals also include over $1 billion each in other funding that is unique to that budget. Especially for the Senate and House, these items will be key priorities in the upcoming budget negotiations.

Governor

The Governor spent more than either chamber in the areas already covered above, so she is most likely to trade away her unique proposals in order to secure funding for other priorities.

• $1 billion for school infrastructure funding grants spread over six years with a particular emphasis on providing funding for districts with low taxable value that would have trouble raising infrastructure funding through local property taxes.
• $50 million for before and after school and summer school programming.

Senate

The Senate spent the least of all three budgets and had the fewest new or expanded initiatives. That's largely because they saved those dollars up to go into two large scale proposals not seen in either other budget:

• $500M for a district consolidation grant program that would allow districts to retire part of their outstanding bond debt if they consolidate with another district that has a lower millage rate.
• Redirected $1.7 billion of School Aid Fund dollars to community colleges and higher education in order to free up a significant chunk of general fund dollars to pay for a tax cut. Reportedly, the Senate wants to permanently eliminate the sales tax on gasoline, which would carve a huge hole in both the School Aid Fund and the state's general fund.

House

The theme in the House is paying down pension debt and putting money in savings. This is unsurprising given that House Appropriations Chair Representative Thomas Albert worked as an investor for the State of Michigan retirement systems before being elected.

• $1.7 billion payment on the unfunded accrued actuarial liability (i.e. debt) in the MPSERS system. Like making an extra mortgage payment, this proposal would shorten the repayment period for the MPSERS debt and reduce the amount of interest the state has to pay, but would provide no help for schools in the short term.
• $674 million deposit into School Aid Stabilization Fund
• $475 million deposit into the MPSERS Retirement Obligation Reform Reserve Fund

The House also puts $56.2 million into a learning pods pilot program. While not quite a voucher program (it would be run through the state's ISDs), it is nevertheless a voucher-like approach to supplemental learning. The proposal would give parents access to funds to hire teachers to tutor their students individually or in small groups (i.e. learning pods) over the summer. MASSP is concerned about what impact this might have on districts' ability to staff their summer school programs.

Next Steps

The Governor, House, and Senate will likely start negotiations on final budgets within the next week or two. The Legislature has a significant interest in getting the budget done as quickly as possible since its members want to finish in time to campaign before the August primary election (especially since there are several seats up for grabs in the wake of the recent redistricting). With that in mind, MASSP still predicts that the budget will be wrapped up by mid- to late-June, though it is possible that negotiations could go poorly and things could drag on.