Gains for Low-Income and Early Learners in 2016 School Aid/Education Budgets

 

The final 2016 budgets for School Aid and the Department of Education include some important new investments in child care safety and quality, a new initiative to improve reading by 3rd grade, an increase in funding for school districts with high numbers of low-income children at risk of school failure, and a much needed expansion in funding for adult education.

School Aid Budget

The governor’s 2016 School Aid budget totaled $13.96 billion, an increase of approximately 2% over current-year spending. The governor recommended that in 2016, School Aid revenues would again be used to fund universities ($205 million) and community colleges ($256.7 million).

Approximately $2 of every $3 in the School Aid budget is used for the per-pupil foundation allowance, which is the bedrock of school operations. Other major expenditures include special education (10%), programs for children at-risk of educational failure (2%), and early childhood education programs (2%).

Each year the Michigan Legislature determines the level of per-pupil payments schools districts will receive. After reductions in the per-pupil payments of $470 between 2009 and 2012, school districts receiving the minimum payment this year still are receiving $65 less per pupil than they were in school year 2010-11, and those at the maximum payment level are receiving $390 less per pupil.

One goal of the school financing reforms adopted in 1994 in Michigan was to close the funding gap, and this year the gap between districts receiving the maximum and minimum payments was reduced to $848 per pupil.

Third Grade Reading Initiative

The governor recommended a new third-grade reading initiative with total funding of $48.6 million ($25 million state funds). The governor’s initiative recognizes the importance of investments in the earliest years to ensure reading by third grade—a key predictor of school success. The data are discouraging. Currently, almost one of every three Michigan fourth-graders does not reach proficiency on state reading tests.

To improve reading by third grade, the governor recommended expansions in child care eligibility and rates, along with funds to increase the number of child care licensing consultants (see child care section below). The governor’s initiative also includes:

  • An expansion of ome visits to at-risk families to encourage early literacy activities and identify children with disabilities and developmental delays, with funds going to Intermediate School Districts ($5 million).
  • New funds for parent education pilot programs targeting families with children under age 4. The programs would be open to families regardless of income, on a sliding fee scale ($1 million).
  • Funding for teacher professional development and to test new elementary teachers on reading instruction capabilities prior to receiving their teacher certification ($1.45 million).
  • Funds to train teachers and administrators in the use of literacy diagnostic tools ($1.45 million).
  • Funding for additional instruction time for students who need extra assistance with reading, including assistance before, during and after school, as well as summer school programs ($10 million).
  • New literacy coaches for K-3 teachers, coordinated through Intermediate School Districts ($3 million).
  • Funds to implement kindergarten entry assessments ($2.6 million).
  • A new oversight commission outside of state government to monitor progress toward improving third-grade reading proficiency. The governor’s proposal was based on a model in Kentucky where the commission has business and philanthropic support and leadership.
  • Funding for a best practices clearinghouse on early literacy within the Department of Education ($500,000)
    • House: The House rejected the governor’s third-grade reading initiative (with the exception of several child care changes addressed below).
    • Senate: The Senate included most of the provisions of the governor’s third-grade reading initiative with the exception of funding for teacher certification tests and a research clearinghouse. The Senate included an additional $10 million for instructional time for children who are behind in reading, bringing total spending for instruction to $20 million.
    • Final Budget: The Legislature included $31.5 million for the third-grade reading initiative, along with the child care enhancements recommended by the governor (described below). The Legislature agreed with the governor on his recommended initiative with the following major changes:
      • The Legislature increased funding for additional instructional time for students needing help with reading from the governor’s recommendation of $10 million to $17.5 million.
      • The Legislature included $1 million for the Michigan Education Corps.
      • The Legislature rejected funding for the best practices clearinghouse.
      • The Legislature provided $2.5 million for an expansion of home visits to encourage early literacy activities and identify children with disabilities and developmental delays, with funds going to Intermediate School Districts—down from the governor’s recommendation of $5 million.

Per-Pupil Funding

For 2016, the governor recommended: (1) a $75 perpupil increase for all districts, bringing the minimum payment to $7,326 and the maximum to $8,174; (2) a 60% cut in funding for implementing best practices, from $75 million to $30 million; (3) a change in the criteria for qualifying for best practices funds, including a focus on school district fiscal stability, as well as early reading and kindergarten entry assessments; and (4) the elimination of funding for performance grants ($51 million). Although the governor proposed an across-the-board increase of $75 per pupil, for some districts that would be offset by the loss of funding from best practices or performance grants. Some districts could lose per-pupil funding if they are currently receiving both best practices and performance grants.

  • House: The House budget eliminated or reduced funding for a range of programs that are not part of the per-pupil formula—but are often intended to address the specific needs of low-income students and struggling districts—rolling those funds into the per-pupil allotment. Among the programs eliminated were best practices and performance grants to schools.

The House also relied on a formula that has been used in recent years to close school funding gaps by providing districts with the lowest funding with twice as much in increases as those at the top. Under the House budget, districts would receive increases ranging from $137 to $274 per pupil plus an equity payment of up to $25 per pupil for districts at the minimum level. This would increase the minimum per-pupil payment to $7,550, and the maximum to $8,236. How districts fare overall would depend on the dollars lost through cuts to other state programs that are not part of the per-pupil allotment.

  • Senate: The Senate also used the formula that provides twice as much to districts with the lowest funding, with increases ranging from $50 to $100 per pupil. Under the Senate proposal, the minimum state per-pupil payment would be $7,351, and the maximum $8,149. The Senate agrees with the governor’s proposal to reduce funding for best practices grants from $75 million to $30 million, and eliminates performance grants.
  • Final Budget: The Legislature recommended: (1) per-pupil increases ranging from $70 to $140, based on a formula that provides districts with the lowest funding increases that are two times greater than those at the top, and raising the minimum foundation allowance to $7,391 and the maximum to $8,169; (2) the elimination of funding ($75 million) for best practices grants to districts; (3) the elimination of district performance grants ($51.1 million); and (4) an increase in funding needed to ensure that all districts get a per-pupil increase of at least $25—after the loss of any best practices and performance grants ($12 million expansion).

At Risk Programs

For 2016, the governor recommended an additional $100 million for the At Risk program, bringing total funding to $409 million. Michigan provides funds to school districts for a range of instructional and noninstructional services for at-risk students based on the number of children qualifying for free school meals. This year, budget language was adopted to focus those dollars on: (1) improving third-grade reading proficiency; and (2) graduating students who are career and college ready. Funding for at-risk students has not been increased in more than a decade, remaining at $309 million.

  • House: The House rejected the governor’s proposed increase and added budget language requiring districts to use current funding to implement a school-wide, multi-tiered system of supports, instruction and intervention—a model already adopted in some areas of the state.
  • Senate: The Senate approved a $98 million increase for At Risk programs, requiring that 50% of the increase be used by districts to improve reading by the end of third grade.
  • Final Budget: The Legislature included an increase of $70 million for the At Risk program, bringing total funding to $379 million. Legislators agreed to include the Senate definitions for children who are at risk and eligible for services, as well as House language requiring the use of the multi-tiered system of supports, instruction and intervention model at least in grades K-3.

Adolescent Health Centers

The governor recommended continuation of current-year funding for adolescent health centers ($3.6 million).

  • House: The House agreed with the governor.
  • Senate: The Senate increased funding by $2 million to a total of $5.6 million, with funds to be used to expand mobile teams to provide nursing and behavioral health services in underserved schools.
  • Final Budget: The Legislature adopted the Senate recommendation, increasing funding for child and adolescent health centers by $2 million to a total of $5.6 million, with funds used to allow three existing centers to act as hubs with mobile teams serving satellite schools.

Early Childhood Education and Care

The governor recommended continuation funding for the Great Start Readiness program ($239.6 million). The per-pupil allocation for a half-day slot would remain at $3,625. Over the past two years, Gov. Snyder and the Legislature approved a $130 million increase in funding for the Great Start Readiness preschool program for low-income and at-risk 4-year-olds.

  • House: The House agreed with the governor.
  • Senate: The Senate agreed with the governor on funding, and added language allowing districts that are having difficulty filling preschool classes for fouryear-olds to also enroll 3-year-olds.
  • Final Budget: The Legislature included continuation funding of $239.6 million for the Great Start Readiness preschool program, and deleted Senate language that would have allowed some districts to serve 3year-olds.

Funding for School Districts in Fiscal Distress

The governor proposed a $75 million increase in funding for school districts facing academic and fiscal problems. A new distressed district emergency grant fund was established this year with a state investment of $4 million.

  • House: The House rejected the $75 million increase, and eliminated the programs, including current-year funding of $4 million.
  • Senate: The Senate increased total funding from the current level of $4 million to $8.9 million.
  • Final Budget: The Legislature agreed with the House and eliminated all funding for grants to school districts facing academic and fiscal problems.

Adult Education

The governor recommended continuation funding of $22 million for adult education. Michigan has cut state funding for adult education drastically in the past 20 years from $185 million in 1996 to $22 million this year. The state is currently in the process of changing how it allocates those funds statewide, focusing on the percentage of people in a region who are not high school graduates or lack basic English proficiency.

  • House: The House eliminated all funding for adult education, but included a placeholder in the budget indicating openness to additional discussions in the conference committee.
  • Senate: The Senate increased funding for adult education by $7 million to a total of $29 million.
  • Final Budget: The Legislature included an increase of $3 million for adult education, for total funding of $25 million.

Career/Technical Education and College Readiness

For 2016, the governor recommended: (1) continued funding of $26.6 million for reimbursements to local districts and vocational/technical centers; (2) an expansion of career and technical education through early/middle college programs in the 10 prosperity regions ($17.8 million); (3) continuation funding ($1.75 million) for grants to encourage dual enrollments; and (4) expanded funding ($1.6 million) for the Michigan College Access Network to assist students in making college and career decisions, bringing total funding to $3.6 million.

  • House: The House increased funding for career and technical education reimbursements to schools and centers by $16 million over current-year spending, rejected the governor’s new investment in early/middle college programs through the prosperity regions, eliminated funding for dual enrollment incentive grants, and maintained current-year funding ($2 million) for the Michigan College Access Network.
  • Senate: The Senate increased funding for career and technical education reimbursements by $12.4 million over current year, and agreed with the governor on the early/middle college programs, dual enrollment incentive grants and the Michigan College Access Network.
  • Final Budget: The Legislature increased funding for career and technical education reimbursements by $10 million, provided $10 million for an expansion of career and technical education through early/middle college programs in the 10 prosperity regions and sub-regions (down from the governor’s recommendation of $17.8 million), maintained current-year funding for dual enrollment incentive grants, and agreed with the governor and Senate on expanded funding for the Michigan College Access Network.

Bilingual Education

The governor includes continuation funding of $1.2 million for bilingual education grants.

  • House: The House eliminates bilingual education grants.
  • Senate: The Senate agrees with the governor.
  • Final Budget: The Legislature agreed with the governor and the Senate and provided continuation funding of $1.2 million for bilingual education.

Department of Education Budget

The budget for the Michigan Department of Education grew significantly in 2012 with the launching of the Office of Great Start and the transfer of the state’s subsidized child care program from the Department of Human Services. Two of every $3 spent by the department is from federal sources, with the Child Development and Care program accounting for $110 million (38%) of the total $287 million budget.

Overall funding for child care, as well as the number of families served by the child care program, fell steeply in recent years, in part because of changes in state policy and reimbursement rates that fall far below market rates.

Child Care Services

The governor’s budget addressed problems faced by working low-income families trying to find safe, reliable and high-quality child care by providing funds to increase rates slightly, and by allowing families to remain eligible for child care even if their incomes rise in some circumstances. Included in the governor’s budget were:

  • A new policy that would allow families to remain eligible for child care for up to one year, even if their incomes rise. The goal is to provide greater work and child care stability ($16 million, including funding for current-year implementation).
  • A new policy allowing families that are eligible for care under Michigan’s current low-income guidelines (121% of poverty) to remain eligible until household income exceeds 250% of poverty ($1.5 million).
  • A rate increase for higher quality child care providers. This year, small rate increases were given to providers who received three, four or five stars on the state’s quality rating system—Great Start to Quality. For 2016, the governor proposes to also provide increases for providers earning two stars. In April, more than three of every four providers were not eligible for higher rates because they had not received higher ratings.
    • The House and Senate both agreed with the governor on these child care improvements, and included them in legislation that makes them effective during the current budget year.
    • Final Budget: The Legislature approved the expansions in child care eligibility and payments for the 2016 budget year.

Child Care Safety and Oversight

The governor recommended $5.7 million in federal funding for a 50% expansion in the number of child care licensing inspectors needed to ensure basic health and safety in child care settings. This expansion would reduce the number of child care facilities/homes that inspectors are responsible for from approximately 150 to 98—the national average. Michigan has come under federal scrutiny for its failure to ensure compliance with child care licensing rules, and recent federal law changes require states to do both pre-licensure and annual inspections.

  • House: The House rejected the proposed expansion of child care inspectors.
  • Senate: The Senate agreed with the governor.
  • Final Budget: The Legislature agreed with the governor and the Senate and increased funding by $5.7 million to expand child care licensing staff. Funds will be transferred to the Department of Licensing and Regulatory Affairs, where the program now will be administered.