Despite not having an agreement with Governor Whitmer, the House and Senate are moving ahead on passing their own version of the 2019-20 budget. And unless things change, they look to be on track to put bills on the Governor's desk at the end of the month, leaving her with the option to either sign the budget or shut down state government.

Coming into the week, the message from the Capitol Building was that the budget would be completed without a roads deal and negotiations would continue separately.  But when the Legislature pushed to make a large, one-time general fund expenditure on roads part of the budget, negotiations broke down. The concern is that one-time spending on roads would remove some of the political pressure on Republicans to put forward a plan that doesn't involve raiding MPSERS. And it would take some of the pressure off of all the elected officials in Lansing who would rather avoid a tough vote to raise taxes.

Regardless of what path things take from here, its looks like there is a reasonable chance that the final K-12 budget will look a lot like the conference report that passed Thursday. So let's dig through the details:

  • A foundation allowance increase of $120-240 on the 2X formula. At a total cost of $304.0 million this increase would move the minimum foundation from $7,871 to $8,111 (a 3.0% increase) and the state maximum guaranteed foundation allowance would increase from $8,409 to $8,529 (a 1.4% increase). While this would shrink the gap between the minimum and maximum foundation to $418 per pupil, it would also mean that foundation payments to districts at the state maximum wouldn't even be keeping up with inflation this budget cycle.
  • A nod toward weighted foundation, but no more. In what seems to be a response to increasing pressure to differentiate foundation payments based on student need as proposed by the School Finance Research Collaborative, the Legislature's budget included a new section of boilerplate language that basically enumerates all the existing sections of law that provide some level of differentiated funding (e.g. At Risk, special education cost reimbursement, the CTE per pupil incentive, etc.). However, the budget falls far short of actually investing in a differentiated approach to school funding.
  • A one percent increase in the special education reimbursement rate. $30.2 million in School Aid Fund (SAF) went to increase reimbursements for districts’ and ISDs’ special education costs by approximately 1.0 percentage point. It's something, but seems lackluster compared to the 5% increase proposed by Governor Whitmer.
  • An increase in the CTE per pupil incentive to $50-100 per pupil. The Legislature proposes putting $5.0 million in one-time funds to increased per pupil incentive payments for CTE students from $25 per pupil and an additional $25 to $50 per pupil and an additional $50. As they have in the past, these payments would go to the student's local district even if the CTE program was being provided by the ISD.
  • Eliminates the $25 per pupil high school per pupil bonus. For several years now, districts have gotten a bonus for each 9th-12th grade student they enroll, though with no provision requiring they spend the money at the high school level. Under this budget, that would go away.
  • No change to cyber school foundation allowance. The Governor had proposed capping the foundation allowance for cyber schools at 80% of the state minimum foundation. Neither the House or Senate included in in their initial budget proposals, so it's unsurprising that it was left out of this version too.
  • School aid diversion reduced by $150 million, but still huge. The amount of School Aid Fund money diverted to the higher education budget would be $350 million instead of $500 million, so while this is a big number, it's still only a step. All told, this budget would still divert $764 million of School Aid Fund to higher education and community colleges.
  • Qualifying professional development could count as instructional hours AND days. Boilerplate language would allow up to 38 hours of qualifying professional development to count as instructional time. Professional development would have to meets the requirements of the law (e.g. is aligned to your SIP, is embedded throughout the school year) to qualify.

The Road Forward

A conference report goes to the full House and Senate for an up or down vote, meaning it cannot be amended. However, there is speculation that legislative leadership will move combine all budgets into an omnibus bill to try to make it more difficult for the Governor to exercise her power to veto and to line-item veto all or part of the proposal. That could lead to one more round of changes before the bill goes to Governor Whitmer's desk.

However, given the up and down path this year's budget has taken, anything is possible. Stay tuned and MASSP will keep you updated on things as they move forward.

Written by Bob Kefgen, MASSP Director of Government Relations