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. 2
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 3
Overall K ‐ 12 Funding Gross Funding: Includes Federal, State Restricted, and State GF/GP $17,000,000,000 $15,923,137,100 $15,177,263,600 $16,000,000,000 $14,682,670,800 $14,811,203,800 $15,000,000,000 $13,736,308,500 $13,673,960,100 $12,912,055,600 $14,053,904,600 $14,000,000,000 $13,322,291,100 $12,746,884,600 $12,981,736,200 $13,000,000,000 $12,000,000,000 $11,000,000,000 $10,000,000,000 $9,000,000,000 $8,000,000,000 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 4
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. 5
Minimum and Target Foundation Allowances Effective Minimum and Target Foundation Allowances Gap: Gap: $9,000 $418 $373 $8,679 $8,529 $8,489 $8,500 $8,409 $8,336 $8,289 $8,229 $8,169 $8,111 $8,099 $8,049 $8,019 $8,019 $8,000 $7,871 $7,631 $7,511 $7,500 $7,391 $7,251 $7,146 $7,076 $6,966 $7,000 $6,846 $6,500 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 Minimum Target 6
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% of the foundation allowance.) 7
At Risk Funding Includes Funding for Vision and Hearing Screen and Child and Adolescent Health Centers (Roughly $13.2 Million Annually) $700,000,000 $595,150,000 $600,000,000 $535,150,000 $500,000,000 $510,207,300$528,207,300 $400,000,000 $389,695,500 $389,695,500 $300,000,000 $317,695,500$317,695,500$317,695,500$317,695,500$317,695,500 $200,000,000 $100,000,000 $0 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 8
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. 9
Special Education Funding: State Plus Federal $1,660,053,100 $1,545,153,100 $1,600,000,000 $1,386,246,100 $1,394,169,100 $1,391,946,100 $1,363,846,100 $1,414,696,100 $1,391,569,100 $1,372,946,100 $1,346,487,100 $1,345,946,100 $1,400,000,000 $1,200,000,000 $1,000,000,000 $800,000,000 $600,000,000 $400,000,000 $200,000,000 $0 2010 ‐ 11 2011 ‐ 12 2012 ‐ 13 2013 ‐ 14 2014 ‐ 15 2015 ‐ 16 2016 ‐ 17 2017 ‐ 18 2018 ‐ 19 2019 ‐ 20 YTD 2020 ‐ 21 State Ongoing Federal Gross Funding Gov's Rec 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). $20,000,000 $18,000,000 $18,000,000 $16,000,000 $13,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $6,000,000 $6,000,000 $4,000,000 $1,200,000 $1,200,000 $1,200,000 $1,200,000 $2,000,000 $0 FY 2013 ‐ 14 FY 2014 ‐ 15 FY 2015 ‐ 16 FY 2016 ‐ 17 FY 2017 ‐ 18 FY 2018 ‐ 19 FY 2019 ‐ 20 FY 2020 ‐ 21 YTD Gov's Rec Appropriations 11
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 $689.1 million $718.6 million percentages Sec. 51f, special education – additional % $60.2 million $120.2 million reimbursement Sec. 61a, CTE standard programs $37.6 million $37.6 million Sec. 61d, CTE incentives $5.0 million $5.0 million 12
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 3 rd 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. 13
Great Start Readiness Program & Preschool $400,000,000 $350,000,000 $327,450,000 $300,000,000 $239,575,000$243,900,000$243,900,000$243,900,000$244,900,000$249,950,000 $250,000,000 $200,000,000 $174,575,000 $150,000,000 $109,575,000 $89,700,000 $95,700,000 $100,000,000 $50,000,000 $0 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. 15
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