A LEGISLATIVE INITIATIVE TO ESTABLISH MANDATORY SCHOOL FUNDING
LEVELS
The proposed law would:
Increase current funding by approximately $565 million and require State to provide annual funding increases equal to the rate of inflation for public schools, intermediate school districts, community colleges, and higher education (includes state universities and financial aid/grant programs).
Require State to fund any deficiencies from General Fund.
Base funding for school districts with a declining enrollment on three-year student enrollment average.
Reduce and cap retirement fund contribution paid by public schools, community colleges and state universities; shift remaining portion to state.
Reduce funding gap between school districts receiving basic per-pupil foundation allowance and those receiving maximum foundation allowance.
Should this proposed law be approved?
Yes
No
______________________________________________________
INITIATION OF LEGISLATION
An initiation of Legislation to amend 1979 PA 94, entitled "An
act to make appropriations to aid in the support of the public schools and the
intermediate school districts of the state; to make appropriations for certain
other purposes relating to education; to provide for the disbursement of the
appropriations; to supplement the school aid fund by the levy and collection of
certain taxes; to authorize the issuance of certain bonds and provide for the
security of those bonds; to prescribe the powers and duties of certain state
departments, the state board of education, and certain other boards and
officials; to create certain funds and provide for their expenditure; to
prescribe penalties; and to repeal acts and parts of acts." (MCL 388.1601 to
388.1772), by amending the title and section 11 (MCL 388.1611), the title as
amended by 2003 PA 158, and section 11 as amended by 2004 PA 351, and by adding
sections 12 and 147a.
Existing Michigan law is set forth below. Alterations to
existing provisions of law are set forth below in
BOLD AND UPPERCASE LETTERS
to indicate new language and strike through to indicate deleted language.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Title
An act to make appropriations to aid in the support of the
public schools and the intermediate school districts of the state; to make
appropriations for certain other purposes relating to education; to provide for
the disbursement of the appropriations; TO
ESTABLISH MINIMUM FUNDING FOR THE PUBLIC SCHOOLS, THE INTERMEDIATE SCHOOL
DISTRICTS, THE COMMUNITY COLLEGES, THE PUBLIC UNIVERSITIES, AND THE INDEPENDENT
NONPROFIT COLLEGES OR UNIVERSITIES OF THIS STATE;
to supplement the school aid fund by the levy and collection of certain taxes;
to authorize the issuance of certain bonds and provide for the security of those
bonds; to prescribe the powers and duties of certain state departments, the
state board of education, and certain other boards and officials; to create
certain funds and provide for their expenditure; to prescribe penalties; and to
repeal acts and parts of acts.
Sec. 11. (1) In addition to all other appropriations
under this act for that fiscal year, for the fiscal year ending September 30,
2004, there is appropriated to the state school aid fund from the unreserved
balance in the general fund an amount equal to any deficit balance that would
otherwise exist in the state school aid fund at bookclosing for the fiscal year
ending September 30, 2004. For the fiscal year ending September 30,
20052007,
there is appropriated for the public schools of this state and certain
other state purposes relating to education the sum of $10,909,200,000.00 from
the state school aid fund established by section 11 of article IX of the state
constitution of 1963 and the sum of $264,700,000.00 from the general fund
FROM THE STATE SCHOOL AID FUND THE
SUM NECESSARY TO FULFILL THE REQUIREMENTS OF THIS ACT, AND ANY DEFICIENCY IS
APPROPRIATED FROM THE GENERAL FUND. In
addition, available federal funds are appropriated for each of those
fiscal years THAT FISCAL YEAR.
(2) FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2007, THE TOTAL
AMOUNT APPROPRIATED UNDER THIS ACT FROM STATE FUNDS SHALL NOT BE LESS THAN THE
TOTAL AMOUNT APPROPRIATED UNDER THIS ACT FROM STATE FUNDS FOR THE 2004-2005
STATE FISCAL YEAR, ADJUSTED BY THE PERCENTAGE INCREASE IN THE GENERAL PRICE
LEVEL FROM THE 2004 CALENDAR YEAR TO THE 2006 CALENDAR YEAR. FOR EACH STATE
FISCAL YEAR AFTER THE FISCAL YEAR ENDING SEPTEMBER 30, 2007, THE TOTAL AMOUNT
APPROPRIATED UNDER THIS ACT FROM STATE FUNDS SHALL BE INCREASED FROM THE TOTAL
AMOUNT FOR THE IMMEDIATELY PRECEDING STATE FISCAL YEAR BY THE PERCENTAGE
INCREASE IN THE GENERAL PRICE LEVEL FOR THE CALENDAR YEAR ENDING IN THE
IMMEDIATELY PRECEDING STATE FISCAL YEAR. AS USED IN THIS SUBSECTION, "GENERAL
PRICE LEVEL" MEANS THE CONSUMER PRICE INDEX FOR THE UNITED STATES AS DEFINED AND
OFFICIALLY REPORTED BY THE UNITED STATES DEPARTMENT OF LABOR OR ITS SUCCESSOR
AGENCY.
(3)(2)
The appropriations under this section shall be allocated as provided in this
act. Money appropriated under this section from the general fund shall be
expended to fund the purposes of this act before the expenditure of money
appropriated under this section from the state school aid fund. If the
maximum amount appropriatedAMOUNT
AVAILABLE FOR APPROPRIATION under this
section from the state school aid fund for a fiscal year exceeds the amount
necessary to fully fund allocations under this act from the state school aid
fund, that excess amount shall not be expended in that state fiscal year and
shall not lapse to the general fund, but instead shall be deposited into the
school aid stabilization fund created in section 11a.
(3) If the maximum amount appropriated under this section from
the state school aid fund and the school aid stabilization fund for a fiscal
year exceeds the amount available for expenditure from the state school aid fund
for that fiscal year, payments under sections 11f, 11g, 11j, 22a, 26a, 31d,
51a(2), 51a(12), 51c, 53a, and 56 shall be made in full. In addition, for
districts beginning operations after 1994-95 that qualify for payments under
section 22b, payments under section 22b shall be made so that the qualifying
districts receive the lesser of an amount equal to the 1994-95 foundation
allowance of the district in which the district beginning operations after
1994-95 is located or $5,500.00. The amount of the payment to be made under
section 22b for these qualifying districts shall be as calculated under section
22a, with the balance of the payment under section 22b being subject to the
proration otherwise provided under this subsection and subsection (4). Subject
to subsection (5), if proration is necessary after 2002-2003, state payments
under each of the other sections of this act from all state funding sources
shall be prorated in the manner prescribed in subsection (4) as necessary to
reflect the amount available for expenditure from the state school aid fund for
the affected fiscal year. However, if the department of treasury determines that
proration will be required under this subsection, or if the department of
treasury determines that further proration is required under this subsection
after an initial proration has already been made for a fiscal year, the
department of treasury shall notify the state budget director, and the state
budget director shall notify the legislature at least 30 calendar days or 6
legislative session days, whichever is more, before the department reduces any
payments under this act because of the proration. During the 30calendar day or 6
legislative session day period after that notification by the state budget
director, the department shall not reduce any payments under this act because of
proration under this subsection. The legislature may prevent proration from
occurring by, within the 30 calendar day or 6 legislative session day period
after that notification by the state budget director, enacting legislation
appropriating additional funds from the general fund, countercyclical budget and
economic stabilization fund, state school aid fund balance, or another source to
fund the amount of the projected shortfall.
(4) Subject to subsection (5), if proration is necessary, the
department shall calculate the proration in district and intermediate district
payments that is required under subsection (3) as follows:
(a) The department shall calculate the percentage of total state
school aid allocated under this act for the affected fiscal year for each of the
following:
(i) Districts.
(ii) Intermediate districts.
(iii) Entities other than districts or intermediate districts.
(b) The department shall recover a percentage of the proration
amount required under subsection (3) that is equal to the percentage calculated
under subdivision (a)(i) for districts by reducing payments to districts. This
reduction shall be made by calculating an equal dollar amount per pupil as
necessary to recover this percentage of the proration amount and reducing each
district’s total state school aid from state sources, other than payments under
sections 11f, 11g, 11j, 22a, 26a, 31d, 51a(2), 51a(12), 51c, and 53a, by that
amount.
(c) The department shall recover a percentage of the proration
amount required under subsection (3) that is equal to the percentage calculated
under subdivision (a)(ii) for intermediate districts by reducing payments to
intermediate districts. This reduction shall be made by reducing the payments to
each intermediate district, other than payments under sections 11f, 11g, 26a,
51a(2), 51a(12), 53a, and 56, on an equal percentage basis.
(d) The department shall recover a percentage of the proration
amount required under subsection (3) that is equal to the percentage calculated
under subdivision (a)(iii) for entities other than districts and intermediate
districts by reducing payments to these entities. This reduction shall be made
by reducing the payments to each of these entities, other than payments under
sections 11j and 26a, on an equal percentage basis.
(5) Beginning in 2004-2005, if a district has an emergency
financial manager in place under the local government fiscal responsibility act,
1990 PA 72, MCL 141.1201 to 141.1291, payments to that district are not subject
to proration under this section.
(4) (6)
Except for the allocation under section 26a, any general fund allocations under
this act that are not expended by the end of the state fiscal year are
transferred to the state school aid fund. If it is determined at the May
2005 revenue estimating conference conducted under section 367b of the
management and budget act, 1984 PA 431, MCL 18.1367b, that there is additional
school aid fund revenue beyond that determined at the May 2004 revenue
estimating conference, then it is the intent of the legislature to enact
legislation to fund, to the extent that revenues are available, the same
programs in the same amount that were funded under section 81 in 2003 PA 236 and
the same pupil membership formula as in effect under 2003 PA 236.
SEC. 12. (1) FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2007, THE
AMOUNT OF THE BASIC FOUNDATION ALLOWANCE AS CALCULATED UNDER SECTION 20 AND THE
AMOUNTS ALLOCATED UNDER SECTIONS 22A, 22B, 31A, 51A, 51C, AND 81, RESPECTIVELY,
SHALL NOT BE LESS THAN THOSE AMOUNTS AS ORIGINALLY ENACTED FOR THE 2004-2005
STATE FISCAL YEAR BEFORE ANY PRORATION, ADJUSTED BY THE PERCENTAGE INCREASE IN
THE GENERAL PRICE LEVEL FROM THE 2004 CALENDAR YEAR TO THE 2006 CALENDAR YEAR.
FOR EACH STATE FISCAL YEAR AFTER THE FISCAL YEAR ENDING SEPTEMBER 30, 2007, THE
AMOUNT OF THE BASIC FOUNDATION ALLOWANCE AS CALCULATED UNDER SECTION 20 AND THE
AMOUNTS ALLOCATED UNDER SECTIONS 22A, 22B, 31A, 51A, 51C, AND 81, RESPECTIVELY,
SHALL BE INCREASED FROM THOSE AMOUNTS FOR THE IMMEDIATELY PRECEDING STATE FISCAL
YEAR BY THE PERCENTAGE INCREASE IN THE GENERAL PRICE LEVEL FOR THE CALENDAR YEAR
ENDING IN THE IMMEDIATELY PRECEDING STATE FISCAL YEAR.
(2) AS USED IN THIS SECTION, THE MEMBERSHIP FIGURE CALCULATED
UNDER SECTION 6 IS THE GREATER OF THE FOLLOWING:
(A) THE AVERAGE OF THE DISTRICT’S MEMBERSHIP FOR THE
3-FISCAL-YEAR PERIOD ENDING WITH THAT FISCAL YEAR, CALCULATED BY ADDING THE
DISTRICT’S ACTUAL MEMBERSHIP FOR EACH OF THOSE 3 FISCAL YEARS, AS OTHERWISE
CALCULATED UNDER SECTION 6, AND DIVIDING THE SUM OF THOSE 3 MEMBERSHIP FIGURES
BY 3.
(B) THE DISTRICT’S ACTUAL MEMBERSHIP FOR THAT FISCAL YEAR AS
OTHERWISE CALCULATED UNDER SECTION 6.
(3) CONTEMPORANEOUS WITH THE INCREASES IN THE BASIC FOUNDATION
ALLOWANCE PROVIDED FOR IN SUBSECTION (1), BEGINNING WITH THE FISCAL YEAR ENDING
SEPTEMBER 30, 2007, THE LEGISLATURE SHALL DECREASE TO $1,000 BY THE 2011-2012
FISCAL YEAR THE STATE FUNDING GAP BETWEEN THE BASIC FOUNDATION ALLOWANCE AND THE
MAXIMUM FOUNDATION ALLOWANCE.
(4) FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2007, THE GROSS
APPROPRIATION FOR ALL COMMUNITY COLLEGES SHALL NOT BE LESS THAN THE GROSS
APPROPRIATION FOR ALL COMMUNITY COLLEGES FOR THE 2004-2005 STATE FISCAL YEAR, AS
PROVIDED BY 2004 PA 358, ADJUSTED BY THE PERCENTAGE INCREASE IN THE GENERAL
PRICE LEVEL FROM THE 2004 CALENDAR YEAR TO THE 2006 CALENDAR YEAR. FOR EACH
STATE FISCAL YEAR AFTER THE FISCAL YEAR ENDING SEPTEMBER 30, 2007, THE GROSS
APPROPRIATION FOR ALL COMMUNITY COLLEGES SHALL BE INCREASED FROM THE GROSS
APPROPRIATION FOR ALL COMMUNITY COLLEGES FOR THE IMMEDIATELY PRECEDING STATE
FISCAL YEAR BY THE PERCENTAGE INCREASE IN THE GENERAL PRICE LEVEL FOR THE
CALENDAR YEAR ENDING IN THE IMMEDIATELY PRECEDING STATE FISCAL YEAR.
(5) IN THE FISCAL YEAR ENDING SEPTEMBER 30, 2007, THE GROSS
APPROPRIATION FOR HIGHER EDUCATION SHALL NOT BE LESS THAN THE SUM OF THE GROSS
APPROPRIATION FOR HIGHER EDUCATION FOR THE 2004-2005 STATE FISCAL YEAR, AS
PROVIDED BY 2004 PA 352, ADJUSTED BY THE PERCENTAGE INCREASE IN THE GENERAL
PRICE LEVEL FROM THE 2004 CALENDAR YEAR TO THE 2006 CALENDAR YEAR. FOR EACH
STATE FISCAL YEAR AFTER THE FISCAL YEAR ENDING SEPTEMBER 30, 2007, THE GROSS
APPROPRIATION FOR HIGHER EDUCATION SHALL BE INCREASED FROM THE GROSS
APPROPRIATION FOR HIGHER EDUCATION FOR THE IMMEDIATELY PRECEDING STATE FISCAL
YEAR BY THE PERCENTAGE INCREASE IN THE GENERAL PRICE LEVEL FOR THE CALENDAR YEAR
ENDING IN THE IMMEDIATELY PRECEDING STATE FISCAL YEAR.
(6) AS USED IN THIS SECTION:
(A) "COMMUNITY COLLEGE" MEANS A COMMUNITY COLLEGE ORGANIZED
UNDER THE COMMUNITY COLLEGE ACT OF 1966, 1966 PA 331, MCL 389.1 TO 389.195, OR
ESTABLISHED UNDER PART 25 OF THE REVISED SCHOOL CODE, MCL 380.1601 TO 380.1607.
(B) "GENERAL PRICE LEVEL" MEANS THE CONSUMER PRICE INDEX FOR THE
UNITED STATES AS DEFINED AND OFFICIALLY REPORTED BY THE UNITED STATES DEPARTMENT
OF LABOR OR ITS SUCCESSOR AGENCY.
SEC. 147A. (1) OF ALL OF THE TOTAL PERCENTAGE POINTS DETERMINED
AND ASSIGNED TO REPORTING UNITS PURSUANT TO THE PUBLIC SCHOOL EMPLOYEES
RETIREMENT ACT OF 1979, 1980 PA 300, MCL 38.1301 TO 38.1408, AND ALLOCATED TO
REPORTING UNITS UNDER SECTION 147 OR OTHERWISE OFFICIALLY COMMUNICATED TO
REPORTING UNITS, EACH REPORTING UNIT IS RESPONSIBLE FOR PAYING FROM ITS GENERAL
OPERATING FUNDS 80% OF THE TOTAL PERCENTAGE POINTS OR 14.87%, WHICHEVER IS LESS.
EACH REPORTING UNIT SHALL PAY THE REMAINING BALANCE OF THE TOTAL PERCENTAGE
POINTS TO THE PUBLIC SCHOOL EMPLOYEES’ RETIREMENT SYSTEM FROM FUNDS APPROPRIATED
TO THE REPORTING UNITS FOR THIS PURPOSE UNDER SUBSECTION (2).
(2) FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2007, IN ADDITION
TO THE GENERAL FUND MONEY APPROPRIATED UNDER SECTION 11, THERE IS APPROPRIATED
FROM THE GENERAL FUND TO THE REPORTING UNITS THE SUM NECESSARY FOR PAYING THE
REMAINING BALANCE OF THE TOTAL PERCENTAGE POINTS TO BE PAID BY THE REPORTING
UNITS AS DESCRIBED IN SUBSECTION (1).
(3) AS USED IN THIS SECTION, "REPORTING UNIT" MEANS THAT TERM AS DEFINED IN
SECTION 7 OF THE PUBLIC SCHOOL EMPLOYEES RETIREMENT ACT OF 1979, 1980 PA 300,
MCL 38.1307.
