Presentation on the Governors Recommended Budget for FY 2020 21 - - PowerPoint PPT Presentation

Presentation on the Governor’s Recommended Budget for FY 2020‐21

Kathryn Summers, Associate Director Senate Fiscal Agency www.senate.Michigan.gov/sfa February 2020

FY 20019‐20 Proposed K‐12 Supplemental

• The FY 2019‐20 supplemental includes technical cost adjustments for

the foundation allowance (totaling negative $3.0 million), $1.0 million in savings for Promise Zone costs for cash flow borrowing costs, $0.6 million for special education costs, and $10.0 million in additional Federal funds.

• The adjustments included in the supplemental are relatively technical

in nature and would increase spending by $6.6 million.

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Broad Overview of Governor’s FY 2020‐21 Budget

• Governor’s budget assumes passage of House Bill 4125, which was part of

the FY 2019‐20 budget agreement. This bill would result in an increase of $173.2 million for the School Aid Fund in FY 2019‐20 and $179.4 million in FY 2020‐21, continuing into future fiscal years. These funds (totaling $352.6 million) are assumed and used in the Governor’s budget recommendation.

• Overall increase proposed: $745.8 million
• Major increases: $150‐$225 per‐pupil increase via a 1.5x formula – cost of

$290 million; $206 million for MPSERS; $60 million for additional special education reimbursements; $60 million increase for At Risk

• Cyber reduction of $24 million (20%)
• GSRP per‐child increase ‐ $35.5 million; expanded preschool ‐ $42 million
• $40m for school infrastructure grants; $25m for teachers for supplies

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Overall K‐12 Funding

$12,981,736,200 $12,746,884,600 $12,912,055,600 $13,322,291,100 $13,673,960,100 $13,736,308,500 $14,053,904,600 $14,682,670,800 $14,811,203,800 $15,177,263,600 $15,923,137,100

$8,000,000,000 $9,000,000,000 $10,000,000,000 $11,000,000,000 $12,000,000,000 $13,000,000,000 $14,000,000,000 $15,000,000,000 $16,000,000,000 $17,000,000,000 2010‐11 2011‐12 2012‐13 2013‐14 2014‐15 2015‐16 2016‐17 2017‐18 2018‐19 2019‐20 YTD 2020‐21 Gov's Rec

Gross Funding: Includes Federal, State Restricted, and State GF/GP

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Proposed FY 2020‐21 Foundation Allowance

• Additional $290 million. The Governor is recommending an increase

ranging from $150 per pupil for districts with foundation allowances at or above the target foundation (currently $8,529), up to $225 per pupil for districts at the minimum foundation allowance. The proposal uses a "1.5x" formula. Under the proposal, the target would increase to $8,679 and the minimum to $8,336. The gap between the minimum and target would decline to $343 per pupil.

• In addition, the Governor is proposing a 20% reduction in the

foundation allowance of cyber schools (i.e., those public school academies that were issued a contract under the Revised School Code to operate as a school of excellence that is a cyber school); this proposal would save the State an estimated $24 million.

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Minimum and Target Foundation Allowances

$7,146 $6,846 $6,966 $7,076 $7,251 $7,391 $7,511 $7,631 $7,871 $8,111 $8,336 $8,489 $8,019 $8,019 $8,049 $8,099 $8,169 $8,229 $8,289 $8,409 $8,529 $8,679 $6,500 $7,000 $7,500 $8,000 $8,500 $9,000 2010‐11 2011‐12 2012‐13 2013‐14 2014‐15 2015‐16 2016‐17 2017‐18 2018‐19 2019‐20 YTD 2020‐21 Gov's Rec

Effective Minimum and Target Foundation Allowances

Minimum Target 6

Gap: $418 Gap: $373

Governor: FY 2020‐21 At Risk

• At Risk ‐ Additional $60 million. The Governor is proposing to increase

At Risk funding by $60 million, from $522 million to $582 million.

• In the current year, most districts receive roughly 9% of the

foundation allowance for each economically disadvantaged student. (Districts with per‐pupil funding above the target receive 30% of that amount.)

• Under the Governor’s proposal for FY 2020‐21, this percentage would

increase to roughly 10% (i.e., a weight of roughly 0.10), and districts with per‐pupil funding above the target would receive 50% of what districts below the target would receive.

• (Full funding of the section would provide a payment equal to 11.5%
• f the foundation allowance.)

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At Risk Funding

$317,695,500$317,695,500$317,695,500$317,695,500$317,695,500 $389,695,500 $389,695,500 $510,207,300$528,207,300 $535,150,000 $595,150,000 $0 $100,000,000 $200,000,000 $300,000,000 $400,000,000 $500,000,000 $600,000,000 $700,000,000 2010‐11 2011‐12 2012‐13 2013‐14 2014‐15 2015‐16 2016‐17 2017‐18 2018‐19 2019‐20 YTD 2020‐21 Gov's Rec

Includes Funding for Vision and Hearing Screen and Child and Adolescent Health Centers (Roughly $13.2 Million Annually)

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Proposed FY 2020‐21 Special Education

• Special Education ‐ Additional $60 million. The Governor is proposing

to allocate an additional $60 million (bringing the total to $120.2 million) for special education payments to districts. In the current year, $60.2 million is allocated to reimburse an estimated 2.1% of special education costs. The Governor’s proposal would increase the reimbursements to an estimated 4.2% of costs.

• This would continue to be in addition to the constitutionally‐required

payments allocated under Section 51a/51c.

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Special Education Funding: State Plus Federal

$1,346,487,100 $1,394,169,100 $1,391,569,100 $1,363,846,100 $1,345,946,100 $1,386,246,100 $1,372,946,100 $1,391,946,100 $1,414,696,100 $1,545,153,100 $1,660,053,100 $0 $200,000,000 $400,000,000 $600,000,000 $800,000,000 $1,000,000,000 $1,200,000,000 $1,400,000,000 $1,600,000,000 2010‐11 2011‐12 2012‐13 2013‐14 2014‐15 2015‐16 2016‐17 2017‐18 2018‐19 2019‐20 YTD 2020‐21 Gov's Rec State Ongoing Federal Gross Funding 10

Bilingual Education

• The Governor is proposing to increase Bilingual Education from $13

million to $18 million. The $5 million increase would be provided as an equal per‐pupil payment for every English language learner student (estimated at $50 per ELL pupil).

11 $1,200,000 $1,200,000 $1,200,000 $1,200,000 $6,000,000 $6,000,000 $13,000,000 $18,000,000 $0 $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 $16,000,000 $18,000,000 $20,000,000 FY 2013‐14 FY 2014‐15 FY 2015‐16 FY 2016‐17 FY 2017‐18 FY 2018‐19 FY 2019‐20 YTD FY 2020‐21 Gov's Rec Appropriations

Section 28 – Listing of Sections in the Act with Differentiated Funding or Weighted Allocations

Program FY 2019‐20 Allocation FY 2020‐21 Proposed Allocation

• Sec. 22d, rural and isolated districts

$7.0 million $7.0 million

• Sec. 31a, at risk

$522.0 million $582.0 million

• Sec. 41, bilingual education

$13.0 million $18.0 million

• Sec. 51c, special education – mandated

percentages $689.1 million $718.6 million

• Sec. 51f, special education – additional %

reimbursement $60.2 million $120.2 million

• Sec. 61a, CTE standard programs

$37.6 million $37.6 million

• Sec. 61d, CTE incentives

$5.0 million $5.0 million

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Proposed FY 2020‐21 GSRP and Preschool

• Great Start Readiness Program (GSRP) ‐ Additional $35.5 million. The

Governor is proposing to increase the full‐day payment from $7,250 per child to $8,336 per child (which is the same as the Governor’s proposed minimum foundation allowance for K‐12).

• The Governor also is proposing an expanded preschool program,

funded at $42 million. The program is targeted to those districts with at least 75% of their 3rd grade students not proficient in English Language Arts and with at least 75% of pupils determined to be economically disadvantaged. 26 districts are targeted with these parameters, with an estimated 5,000 four‐year‐olds that would be served in a universal preschool program meeting GSRP requirements.

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Great Start Readiness Program & Preschool

$89,700,000 $95,700,000 $109,575,000 $174,575,000 $239,575,000$243,900,000$243,900,000$243,900,000$244,900,000$249,950,000 $327,450,000 $0 $50,000,000 $100,000,000 $150,000,000 $200,000,000 $250,000,000 $300,000,000 $350,000,000 $400,000,000 2010‐11 2011‐12 2012‐13 2013‐14 2014‐15 2015‐16 2016‐17 2017‐18 2018‐19 2019‐20 YTD 2020‐21 Gov's Rec 14

Other Major Proposed Increases FY 2020‐21

• The Governor is proposing $40 million in one‐time capital infrastructure
• grants. Funds would be awarded on a competitive basis, with priority given

to districts that file deficit elimination plans, that are low‐achieving academically, or that are in partnership with Treasury via a Community Engagement Advisory Committee.

• The Governor is proposing $25 million in one‐time reimbursements to

teachers for supplies; estimated reimbursement of $250 per teacher.

• The Governor is proposing $5 million in one‐time professional

development grants.

• The Governor is proposing $5 million in one‐time consolidation incentive

grants.

• The Michigan Public School Employees' Retirement System (MPSERS)

payments are increasing $205.9 million.

• Standard special education cost increases are expected to total $39.9
• million. Federal grants are expected to increase $57.3 million.

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Other Items of Interest

• The Governor is proposing $1 million to reimburse districts that forgive

school meal debt. This is proposed as a one‐time grant.

• The Governor is proposing to restore funding to the Michigan Reading

Corps at $2 million; prior funding was $3 million in FY 2018‐19.

• The Governor is proposing to restore and increase funding for 10 Cents a

Meal, and to make the program statewide ‐ $1 million.

• The Governor is proposing to increase Literacy Essentials training by $3

million, and to increase ISD operations by 3%, or $2.1 million.

• The Governor does not continue for a second year school safety grants

($10 million) or summer school reading ($5 million).

• The Governor is proposing to discontinue funding for dropout recovery

programs ($750,000) and strict discipline academies ($1.6 million).

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MPSERS Funding Paid by the State for K‐12

$0 $155,000,000 $315,500,000 $505,500,000 $796,000,000 $992,900,000 $1,082,200,000 $1,332,170,000 $1,257,700,000 $1,345,540,000 $1,551,406,000 $0 $200,000,000 $400,000,000 $600,000,000 $800,000,000 $1,000,000,000 $1,200,000,000 $1,400,000,000 $1,600,000,000 2010‐11 2011‐12 2012‐13 2013‐14 2014‐15 2015‐16 2016‐17 2017‐18 2018‐19 2019‐20 YTD 2020‐21 Gov's Rec

School Aid Fund Paid for MPSERS Costs in K‐12 Budget Only (Excludes Community Colleges, Higher Education, and Libraries)

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Other Proposed Changes

• The Governor is proposing a three‐year pupil membership blend for

districts that have established a Community Engagement Advisory

• Committee. (Currently only affects Benton Harbor.)
• The Governor is proposing that ISDs and districts receiving school

mental health grants have three years to spend those funds.

• The Governor is proposing to correct how Section 147a(2) funds are

distributed to districts. This is a ‘hold‐harmless’ MPSERS payment and should be distributed to districts based on eligible payroll (which would include Basic, MIP, and those in the first hybrid pension plan, Pension Plus); it is currently incorrectly being distributed based on all payroll.

• The Governor is proposing to extend seat‐time waivers from 1 year to

3 years.

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Links to Budget Documents on SFA Website

• Main SFA K‐12 Page:

http://www.senate.michigan.gov/sfa/Departments/DPk12_web.html

• Most Recent Estimated District Impact:

http://www.senate.michigan.gov/sfa/Departments/DataCharts/DCk1 2_DistrictImpact.pdf

• Most Recent Decision Document:

http://www.senate.michigan.gov/sfa/Departments/DecisionDoc/DDk 12_web.pdf

• Most Recent Highlight Sheet:

http://www.senate.michigan.gov/sfa/Departments/HighlightSheet/HI k12_web.pdf

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