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First look at the school aid budget, now with more stimulus!

*The House Appropriations subcommittee on School Aid held hearings on next year's school aid budget, and made preliminary decisions about how to use Federal stimulus money.* Final decisions for this year await further news on what's happening to revenue collections for school aid. As reported from the subcommittee, the bill uses Federal stimulus (ARRA) money to restore virtually all the cuts recommended in the Governor's original budget, which had been formed before the stimulus bills were passed. *For the current year, FY09* * The committee agreed with the Governor's supplementals, adjusting spending downward by about $90 million to account for known changes in taxable values and pupil count. * Remaining known gap (per January revenue estimate) is covered by increasing the transfer from the General Fund to $85 million from $40.8 million. * $24.5 million of ARRA money is earmarked for an education technology project for online learning. *For next year, FY10* * Direct payments to districts (obligation and discretionary payments) are reduced by a net $269 million, of which $237.5 million is an adjustment for pupil count and taxable value. ** Almost $220 million in ARRA money is appropriated to balance a $251 million cut in the state contribution to foundation allowances, so that foundation allowance payments are not cut. ** Foundation allowances remain the same for FY10 as in FY09 ** Kindergarten funding changes, which would have required districts to have full-day kindergarten by FY11, are delayed for two years. ** Cuts to Section 20j funding are removed. (Funding under this section affects higher-spending, "hold harmless" districts which otherwise would have had their foundation allowances cut in previous years if an annual increase exceeded inflation.) ** A number of earmarked grants to districts are retained (which were deleted in executive budget) ** The remainder is presumably savings due to pupil reductions. * Total state-source appropriations for FY10 is $11.35 billion, just a hair above FY06 levels. ** The House version is only $50 million below the executive budget, which was developed without including ARRA funding. So it would seem that, at this point, the House is only lowering the state contribution by $50 million more than revenue estimates would have required. The Federal ARRA act requires that states "maintain effort" on education funding from state funds at least at 2006 levels. Not yet reflected in the bill is an idea floated by Rep. Alma Wheeler Smith (D-Salem Twp.) at the Willow Run Summit last week: that one way of interpreting the requirement that the state maintain its effort as of 2006 is to say that each district should get at least what it got in 2006, providing cushion for districts with declining enrollment. (Rep. Smith sits on the Appropriations Committee, but not the Education subcommittee.) The bill now goes before the full Appropriations committee, which can but need not make any changes before bringing the budget bill to the floor. To see the HFA's summary of HB4447 (H-1) as reported out by subcommittee, follow this link: http://www.legislature.mi.gov/documents/2009-2010/billanalysis/House/pdf...
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