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Learn Sites > School Finance Blog
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School Finance has had many challenges the last few years. I am excited to be able to keep our community up to date on the changes that occur throughout the year. The news from the State has not been good. Cuts to schools are expected this fiscal year and if the economy does not improve in the State of Michigan - bigger cuts are expected for next year. Stay tuned! |
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1/12/2010
Courtesy of Michigan School Business Officials:
The State held its Revenue Consensus Estimating Conference (CREC) on Monday, January 11, 2009 and the three parties (House Fiscal Agency, Senate Fiscal Agency and Michigan Department of Treasury) agreed on state revenue estimates for this fiscal year and next.
The Good News: The parties confirmed that there are enough revenues estimated so that no proration of districts’ foundation allowances will be necessary for 2009-10. The $165 cut to the foundation and the vetoes of Sec. 20j funding and other categoricals will stand. The balance sheet for the School Aid Fund (SAF) is projected to end the 2009-10 year with a $53.7 million balance, which will be available for 2010-11.
The Bad News: The SAF revenue estimate for 2010-11 includes the $53.7 million balance carry forward and the remaining $184.1 million in ARRA federal stabilization funds, but still falls short of estimated baseline expenditures by $423 million or $268 per pupil.
The Governor now has the challenge of preparing a balanced 2010-11 School Aid Budget based on these numbers and present the budget to the Legislature no later than February 12, 2010. The really bad news is the General Fund/General Purpose (GF/GP) budget is also showing a shortfall – the shortfall is over a billion dollars. This does not bode well for getting additional SAF support from GF/GP coffers.
One Interesting But Sobering Statistic: The economists that presented today stated that Michigan was 20th among states for Per Capita Income as late as 2001. By 2008, Michigan had fallen to 37th place and at the end of 2009, is our Great Lake State is estimated to fall to 40th place among states for Per Capital Income. 11/18/2009
The Legislature is on a two week recess. As the November 21st deadline approaches, it appears that the Governor's proration of $127/pupil will go into effect.
This will be a total of $292/pupil or $900K reduction to revenues this year. 11/6/2009
On Thursday, the House passed a K-12 supplemental bill reducing the governor's proration from $127 per student to $10 by tapping $184 million in federal stimulus funds set aside to cover the budget hole in 2010-11.
The supplemental in HB 4860 would do nothing to address the $165 per-pupil cut included in the K-12 budget approved by the Legislature.
This must now be approved by the Senate. I will update as information is received. 10/22/2009
Governor Granholm has started the clock on the process to issue a mid-year proration to schools. The legislature has 30 days in which to act to fill the gap in the School Aid Fund and prevent the proration. If they fail to do so, schools will see a $127 per pupil proration. ($380,000 for TK) This is in addition to the $165 foundation allowance reduction and other categorical cuts in the budget. ($490,000 for TK)
The legislature has the ability to restore ALL cuts beyond those taken in the conference report. By fulfilling their promise to students and raising the $100 million in new revenue on which they balanced their budget in combination with using available stimulus, schools can be spared from these draconian cuts.
In addition, lawmakers need to use this time to fix the structural funding problems that continue to plague schools and provide students with the level of education that can only come with a stable and predictable school funding source.
We need to contact our lawmakers NOW!
Education Community Implores Legislators to Balance the K-12 Budget
When the Legislature passed this year’s K-12 budget last week, the House and the Senate okayed a $165 per pupil cut to the state’s school districts, a deep cut that will reduce services that children need to succeed. But the School Aid Act that was passed included $100 million in new revenues in order to balance the budget. The Legislature has not come to an agreement on those revenues, and without further action, the cut to the state’s school districts will skyrocket .
On Wednesday, the state’s Treasury Department sent a memo to Gov. Granholm indicating that the projected shortfall in the School Aid Fund (SAF) is much larger than was earlier predicted.
State Treasurer Bob Klein now estimates the budget shortfall will be approximately $264 million for Fiscal Year 2009-10 if the School Aid budget is enacted in its current form, which could result in a total cut of more than $300 per pupil this year.
This would be $400,000 more than noted previously. A total of $900,000 for Thornapple Kellogg less in revenues for this year. The additional cut may happen as early as next month.
The education advocates are calling on legislators to enact revenue measures immediately in order to fund the budget they have already passed. Most are also urging both chambers to address the state’s structural deficit, which has caused a continuous cycle of budget gaps year after year. 10/20/2009
Thornapple Kellogg has already started the fiscal year on July 1st. The State of Michigan began its fiscal year on October 1st (3 months after TK). We had been waiting for a final School Aid budget. The Governor finally signed this late yesterday which includes $165 less per student. This reduction in revenues is approximately $500,000 less than expected for this school year. |
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