House Subcommittee Approves FY 2014 Budget for K-12 School Aid

 Full report in PDF

On March 19, the House Appropriations Subcommittee on K-12 School approved its version of the Fiscal Year 2014 budget.

Included in the budget was $50 million in new money for an expansion of the Great Start Readiness preschool program, no across-the-board increase in the per-pupil allowance received by public schools and academies, a one-time equity payment of up to $34 per pupil for districts with foundation allowances below $7,000, and additional funding for school districts that can meet certain performance requirements in reading and math.

The Subcommittee also added new and controversial language related to Right to Work legislation passed last year in the lame duck session. The language limits access to some state funding and grants if districts enter into employee contract extensions or renewals between Dec. 10, 2012 and March 28, 2013 under certain conditions, unless they can realize 10% savings.

In addition, the budget language withholds funds from districts that approve contracts that only contain agreements requiring individuals, as a condition of employment, to become or remain members of a labor organization; pay any dues, fees or assessments to a labor organization; or pay to any third party or charitable organization dues or fees required of members or employees represented by a labor organization. Similar language was added to the higher education budget passed out of subcommittee.

The House Subcommittee’s budget includes the same total funding for K-12 School Aid–$13.24 billion or an increase of 2.2% over current year funding. Included in the House Subcommittee budget are the following:

PER-PUPIL FOUNDATION ALLOWANCE AND SPECIAL GRANTS

Equity payments:

  • Governor: The governor recommended a total of $24 million for equity payments to further close the foundation funding gap between districts by raising the per-pupil payment for the lowest-funded districts receiving the minimum grant from $6,966 to $7,000 per-pupil—an increase of $34 per pupil. The governor did not recommend an across-the-board increase in per-pupil allocations, so districts that are not eligible for equity grants would not receive increases, and may in fact face cuts because of changes in payments contingent on best practices (see below).
  • House Subcommittee: The Subcommittee adopted the governor’s recommendation, appropriating $24 million for equity grants.

Best practices grants:

  • Governor: The governor reduced funding for “best practices” grants from $80 million in the current year to $25 million, a nearly 70% decrease, with the award amount falling from $52 per pupil to $16. Grants are available for school districts that meet seven of eight best practices defined by the Legislature, including participation in schools of choice, student academic growth, online learning opportunities, employee healthcare benefit practices and competitive bids for non-instructional services, the availability of a dashboard for parents to help evaluate performance, and the inclusion of physical and health education in the curriculum.
  • House Subcommittee: The Subcommittee removed funding for best practices grants, leaving a $100 “placeholder” in the budget, indicating its intention to reserve the issue for further discussion in a joint House/Senate conference committee later in the budget process.

District performance funding:

  • Governor: The governor included continuation funding of $30 million for districts meeting specified performance standards in reading and math. Districts can receive a total of $100 per pupil in additional funding, with $30 for student academic growth in math for third through eighth grades, $30 for growth in reading for third through eighth grades, and $40 for growth in all high school tested subjects.
  • House Subcommittee: The Subcommittee increased district performance funding by $16.4 million, for total funding of $46.4 million, to reflect the actual costs of fully funding all eligible districts.

Competitive “student-centric” grants:

  • Governor: The governor included $8 million in new funding for competitive grants to districts that work to align instruction with individual student learning styles and paces, and that advance students based on their mastery of the material. These funds are related to the new Education Achievement Authority, which is currently operating in 15 Detroit schools, and is being debated by the Legislature for expansion to the lowest performing 5% of all Michigan schools.
  • House Subcommittee: The Subcommittee reduced funding by $1 million to a total of $7 million.

AT-RISK PROGRAMS

  • Governor: The governor included continuation funding of $309 million for students at risk of academic failure. These dollars can be used flexibly by local school districts for a range of services, including tutoring, mentoring, reading programs, class size reductions, credit recovery programs, alternative and adult education, K-3 early interventions and early childhood programs, and medical and counseling services.

The governor also included continuation funding for Child and Adolescent Health Centers ($3.6 million), and hearing and vision screenings ($5.2 million).

  • House Subcommittee: The Subcommittee agreed with the governor and provided continuation funding for at-risk programs, as well as Child and Adolescent Health Centers and hearing and vision screenings.

EARLY CHILDHOOD PROGRAMS

Great Start Readiness Program:

  • Governor: The governor increased funding for the Great Start Readiness Program by $65 million, from $109.3 million in the current year to $174.3 million in Fiscal Year 2014. This increase would open up approximately 16,000 new half-day slots for four-year-olds living in families with incomes below 300% of poverty. In addition, the governor made the following changes to GSRP:

o Increased the payment for a half-day preschool slot from $3,400 to $3,625.

o Eliminated the current competitive GSRP program that provides funds to private sector providers, and instead required Intermediate School Districts to ensure that at least 20% of their slots were contracted to public or nonprofit community-based organizations, as well as for-profit businesses.

o Required ISDs to ensure that at least 90% of the children served were from families with incomes of 300% of poverty or less (up from 75%).

o Requires GSRP providers to participate in the state’s quality improvement program—Great Start to Quality—with a quality rating of at least three out of five stars.

  • House Subcommittee: The Subcommittee endorsed an expansion of the GSRP, but included only $50 million in new funding–$15 million below the governor’s recommendation. This increase would create approximately 11,800 new GSRP half-day slots. In addition, the Subcommittee:

o Accepted the governor’s recommendation to raise the payment for a half-day slot to $3,625.

o Added budget language ensuring that ISDs that can demonstrate that they are unable to contract out at least 20% of their slots to private sector providers are able to keep their full GSRP allocation.

o Lowered the income eligibility cap for the GSRP program from 300% of poverty to 250% of poverty. ISDs would be required to ensure that at least 80% (down from the governor’s recommended 90%) of children served are from families with incomes below 250% of poverty.

o Agreed with the governor’s recommendation that all providers have quality ratings of at least three out of five stars through Great Start to Quality.

o Added language to allow parents to choose among any of the providers in their or other ISDs, as long as the programs have the capacity to serve them.

Early childhood block grant:

  • Governor: The governor recommends continuation funding of $10.9 million for the early childhood block grant to ISDs for parent education and support, allocating to each ISD 100% of its current allocation. Block grant funds are used in part to convene local Great Start Collaboratives and Parent Coalitions.
  • House Subcommittee: The Subcommittee also provided continuation funding for the early childhood block grant, but included language requiring the Office of Great Start to determine a new distribution formula for the funds to ensure more equitable funding statewide.

ADULT EDUCATION

  • Governor: The governor maintained funding for adult education at $22 million. State funding for adult education fell from $80 million in 2001 to $22 million in the current fiscal year. At the same time, deep cuts were made in federal funding, making adult education less accessible for many.
  • House Subcommittee: The Subcommittee agreed with the governor’s recommendation for continuation funding at $22 million, and added budget language indicating legislative intent to begin allocating adult education funds on a competitive basis beginning in Fiscal Year 2015.