MIPFS Newsbriefs

*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":http://legislature.mi.gov/doc.aspx?2010-SB-1163. The Senate version, passed before the "optimistic news from the May revenue estimation conference":http://www.miparentsforschools.org/node/127, 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.

For much of December, the Legislature was consumed with bills that lawmakers hoped would increase Michigan's chances to get a share of Federal "Race to the Top" funds. Money from this stimulus program would be awarded to states which came out on top in a competition which evaluated reform efforts, and Michigan might have qualified for as much as $400 million. In the end, Michigan was not chosen as one of the finalists for the first round of funding, but the changes to Michigan law enacted in late December are not voided as a result.

It has been a busy few months at both the state and local levels, and we at MIPFS have fallen behind in our reporting on state-wide issues. In an effort to remedy that, these status reports will give brief summaries of what has happened on the school funding front over the last few months. More detailed reports on each of these issues are coming in the next weeks. In these reports, we'll cover three areas: The school aid budget cuts for 2009-10, legislation that was part of Michigan's Race to the Top application, and school funding-related issues in the current 2010-11 budget debate.

*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":http://legislature.mi.gov/doc.aspx?2009-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. bq. Tell your lawmakers what you think! "Check out our action alert on the school aid budget by clicking here":http://capwiz.com/miparentsforschools/issues/alert/?alertid=14099486.

*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.

*The House Appropriations subcommittee on School Aid held hearings on next year's school aid budget, and made preliminary decisions about how to use Federal stimulus money.* Final decisions for this year await further news on what's happening to revenue collections for school aid. As reported from the subcommittee, the bill uses Federal stimulus (ARRA) money to restore virtually all the cuts recommended in the Governor's original budget, which had been formed before the stimulus bills were passed.

*The House version of the sinking fund bill was reported out by the Education committee yesterday, coming much closer to passage in the Democrat-controlled chamber.*

*State officials are saying that cuts to schools may be disallowed under the federal stimulus legislation.*

State Sen. Gretchen Whitmer (D-East Lansing) has once again introduced a bill that would broaden the use of sinking funds by school districts. "As we discussed in this article":http://www.miparentsforschools.org/node/95 and in a "legislative wrap-up below":http://www.miparentsforschools.org/node/106, sinking funds are property-tax supported funds earmarked for school capital projects.