Additional funding to schools in FY11 comes with strings

In a Thursday, May 19 news conference, Gov. Rick Snyder and Republican legislative leadership announced they had hashed out a deal on the Fiscal Year (FY) 2011-12 state budget, including a reduced per-pupil funding cut for public schools — but provided that districts meet certain financial benchmarks.

While final votes on the state’s spending plan still have to take place — Snyder and legislative leadership have called for the budget to be signed into law by Tuesday, May 31 — lawmakers called the spring completion of the budget a monumental achievement, particularly given the Michigan budget fights that have become as synonymous with the fall as the start of the World Series.

“The budget we are working toward is a solid building block for Michigan’s future,” Snyder stated in a press release. “Coupled with the recent tax overhaul, this fiscally-disciplined, structurally-balanced budget will let investors and job providers know that Michigan’s house is in order. Restoring this fiscal integrity creates an economic environment that leads to more jobs for Michigan workers. While healthy discussion will continue in the coming days, there’s no doubt that the culture change in Lansing is providing Michigan families with the responsive government they expect and deserve.”

According to officials, included in the tentative budget deal is an additional $310 million for K-12 education, with $150 million of that to be distributed on a per-pupil basis to districts meeting specified financial best practice measures as laid out in the education budget for the fiscal year, which begins Oct. 1. The other $160 million will be used to off-set local school districts’ unfunded retirement costs through the Michigan Public School Employees Retirement System.

Effectively, according to state officials, this means the per-pupil funding cut districts will experience under the budget amounts to less than, on average, $100 per-pupil.

But don’t tell that to state Sen. Gretchen Whitmer, the Senate Minority Leader who said that a budget deal she reached with Senate Majority Leader Randy Richardville (R-Monroe) to use some of the money that will be tied to financial best practices would go to schools with no strings attached.

“However, this week everyone seems to have amnesia,” she said. “It only takes one of the seven Republicans who voted against the K-12 budget to stand up for their school kids, their constituents, and their property owners and stop these cuts from happening.”

“Today’s budget announcement is backpedaling on a huge mistake: a mistake that will still cost our children dearly,” said state Rep. Lisa Brown (D-West Bloomfield, Commerce, Wolverine Lake). “I’ve said from Day No. 1 that any cut to our children’s education is unacceptable, and forging ahead with these cuts when there is a nearly $800 million surplus in the state’s School Aid Fund is reckless and irresponsible. I will keep fighting to restore all the funding to K-12 education.”

Janet Roberts, director of community relations and fund development for Huron Valley Schools, said that while stressing that the additional revenue is appreciated, “certainly what has been done is not enough to solve the problem.”

Roberts said the district has questions about whether — since they’ve privatized some non-instructional services, but not all of them — they will be eligible for any of the additional funding. All told, she said, the district is still facing a $10 million deficit for the roughly $90 million Huron Valley FY 2011-12 budget, which begins July 1.

Other concerns she expressed included the fact that money is still available in the School Aid Fund, that it “violates the intent of Proposal A,” and it “transfers money to higher education, which has the ability to increase tuition,” whereas public K-12 schools cannot.

“It still puts us in jeopardy,” she said. “A lot of the media that I’m seeing says it’s only $100 (per pupil). That doesn’t include the $170 (per pupil) that was carried over from last year.”

Additionally, state employee concessions are being taken down a notch from $180 million to $145 million under the tentative agreement.

An additional $15 million will be used for Snyder’s new Economic Vitality Incentive grants, which are intended to replace the statutory revenue sharing program and instead base state-to-local dollars on municipalities’ willingness to implement cost-savings measures and best practices. Another $15 million will be used for county revenue sharing.

Another $25 million will be used for the Michigan film tax credits.

According to Snyder’s office, the $1.5 billion deficit expected for FY 2011-12 is now eliminated, and the FY 2012-13 budget is in balance — something his staff called a “significant achievement.”

The state’s next fiscal year begins Oct. 1 and ends Sept. 30, 2012, and lawmakers are again at work in conference committee this week to iron out the wrinkles in the proposed spending plans for various state agencies.