Negotiations on a school aid budget for FY2011 ground to a halt as House and Senate conferees split on what to do with the projected School Aid Fund surplus.

After months of uncertainty, closure appeared near on the school aid budget for the 2010-11 fiscal year. A deal in principle was reached among House and Senate members on the conference committee reconciling the differences in the two chambers’ versions of the budget bill, SB 1163. The Senate version, passed before the optimistic news from the May revenue estimation conference, had included further cuts of $118 per pupil plus larger transfers from the cash-strapped general fund.

The revenue conference projections, however, allowed lawmakers to consider making no cuts at all for fiscal 2011. The news was good enough, in fact, that the School Aid Fund might emerge with a surplus when all was said and done. And that is where the trouble began.

The State’s key financial agencies released their consensus revenue estimate today, updating their predictions for state tax revenue for both this fiscal year and next. The consensus estimate for School Aid revenue for this year (2009-10) is now $10.75 billion, up $292 million (2.8%) from the estimates made in January. The estimate for next year (2010-11) is now $10.83 billion, up $352 million (3.4%) from the January estimates. These new projections may limit school aid cuts for next year to the $118 per pupil passed by the Senate earlier this spring, or possibly reduce it even more.

One of the interesting things about doing local advocacy work is that it gives you a whole new perspective on how the public views school funding issues. It can also give you a detailed look at the fuzzy thinking of those who argue that our schools can’t, or shouldn’t, be given the resources to avoid major cuts to programs and personnel. As part of our “Project Washtenaw,” MIPFS volunteers have been engaging the communities in Washtenaw County about the crisis their public schools now face. One year, a failed county millage proposal, and a bundle of desperate budget cuts later, we’ve learned some important lessons about how school funding is often treated in the public discourse and how that might be changed for the better. We’d like to share them with you.

Working against a midnight deadline, the State House could not muster enough votes to pass a School Aid budget that would have handed districts a $218 per pupil cut three months into their fiscal years.

The school aid bill, HB 4447, emerged from a joint House-Senate conference committee last week including $482 million in cuts to K-12 funding, mostly in the form of a $218 per pupil funding cut. Part of the rationale for the deeper than expected cuts was to save some $180 million in Federal stimulus money to avoid deeper cuts next year – an election year.

Tell your lawmakers what you think! Check out our action alert on the school aid budget by clicking here.

Our lawmakers are once again at a crossroads, figuring out how to manage the tremendous decline in revenues for public services, including schools. Time is running out.

Constant readers will notice the shortage of news on the state K-12 education budget in recent months. There is a good reason: there hasn’t been any.

Rushing to get budget bills passed before adjourning for the July 4th recess, the state Senate on 24 June passed its version of the K-12 school aid budget bill. Senators made only minor changes to the amended bill reported from the Appropriations Committee and voted along party lines to approve a budget that includes some $413 million in cuts to schools, including a $110 per pupil cut to local school districts and the near-elimination of several early childhood and school-readiness programs. More….

After some floor dramatics last week, the state House succeeded in passing HB 4313, which expands what school districts can purchase with sinking funds. Opponents of the bill, mostly Republicans, argued to no avail that it would constitute an increase in property tax rates that required a super-majority vote in both houses. Other attempts to amend the bill at the last minute also failed. Even so, the legislation passed on a 74-35 vote, with eleven Republicans voting in favor while three Democrats voted against the bill. The bill now heads to the Senate, which allowed similar legislation to die at the end of last session.

This Friday (9 January), the state’s top economists will meet, as required by law, and project how much tax revenue Michigan will gather this fiscal year. That’s when we find out how bad things are. If, as most observers suspect, they estimate that revenues will be less than expected, the governor is required by law to propose spending cuts for the current year to bring the budget into balance – unless the Legislature can find a way to plug the hole. This process includes K-12 school funding; the vast majority of the money to operate Michigan’s schools comes from the state School Aid Fund and is supported by state-wide taxes. This is not the first time our schools have gone through this ringer, but maybe it should be the last?

No EO cuts for schools – yet – and sinking fund legislation moves.

Michigan’s school districts received two somewhat unexpected doses of good news this week, at a time when good news is pretty sparse.

The biggest news came on Wednesday, when state Budget Director Bob Emerson told a joint session of the House and Senate Appropriations committees that education funding would not be touched in Gov. Jennifer Granholm’s executive order detailing $134 million in budget cuts.

Legislators head towards budget compromise, but no new thinking in sight.

Most parts of the State budget for next fiscal year are in the final stages of negotiations, as House/Senate conference committees meet this week to hammer out versions acceptable to the Democratic House and the Republican Senate. The school aid budget bill (SB 1107), which supports K-12 education, is part of this process. The good news is that, despite the continued slide of Michigan’s economy, lawmakers will probably not have to cut school funding for the current year, which they avoided last year only after some creative accounting. The bad news is that revenues earmarked for schools will be even lower next year than projected in January, making any attempt to simply keep up with inflation impossible. State government’s main budget, the general fund, is in even worse shape, ruling out help from that direction as well.