Tuesday marked the beginning of key legislative movement in the State Legislature on both distribution of much-needed federal COVID relief funding and the annual education budgets for the 2021-22 school year.

Relief Funding

The House passed HB 4421, which appropriated the remaining ESSER 2 ($841 million from December) and all the ESSER 3 ($3.3 billion from this spring’s American Rescue Plan) funds without any tie bars to bills that restrict the powers of the governor. Ending political games with such tie bars is a positive development and puts more than $4 billion in funding closer to the schools and students that need it.

The bill also contains a new formula for distribution of ESSER 3 equalization funding, which is designed to deliver more funds to districts getting lower amounts of relief under the Title 1-based formula (bringing them up to a minimum of $1,093 per pupil).  However, to get that extra funding, the districts would be subject to a pro-ration formula based on the amount of weekly in-person learning being delivered, on average from April 12 to June 4.  If a district was offering at least 25 hours per week, they would get 100% of the equalization funds; but if they were below that level, the amount would be prorated: over 20 hours per week would get 75%, over 15 hours 50%, and over 10 hours 25%. (Note this ONLY applies to the equalization funding, not the vast majority of the ESSER 3 funding that is distributed based on the Title 1 formula – see this district-by-district breakdown of the available funds.

MEA continues to disagree with legislative language that ties distribution of funds to in-person learning – forcing districts to choose between health and money is bad public policy. But the distribution of billions more in much-needed federal relief funds without strings attached is absolutely a positive step by the State House.

HB 4421 now heads to the State Senate, which has yet to consider any appropriation of education funding from the American Rescue Plan passed by Congress this spring. Visit www.MiSchoolRelief.com to look up how much money is on the line for your district and then contact your State Senator to urge immediate action on this issue.

2021-22 School Aid Budgets

The full Senate also has not yet acted on education budgets for the 2021-22 school year. SB 83, which is on the floor awaiting a vote, includes a per pupil increase of $125 to $250, with districts that receive less funding receiving bigger increases. However, an anticipated – and confusing – amendment from Senate Republicans is expected related to in-person and virtual requirements for next year.  The language provided to MEA lobbyists appears to require in-person education next year (barring an emergency order), but mandates that virtual options be available and that the “teacher of record” must teach students in both virtual and in-person students in the second semester. We are reviewing the eight-page amendment and working to determine its impact (both intended and actual).

On the House side, the full chamber passed HB 4407 on Tuesday, which would provide between $50 and $100 more per student but actually spends $570 million more than the Senate proposal on a variety of programs, like summer school, pandemic recovery programs, rural bussing, before- and after-school programs and year-round schooling. For a comparison of the House and Senate K-12 budgets and the Governor’s proposals from February, check out this primer from MEA published last week.

2021-22 Higher Education Budgets

The House voted to send the community college budget (HB 4401) to the Senate today. The House increases community college operations funding by $17.0 million, a 5.2% increase, but makes major changes in how higher education would be funded.  The new formula creates winners and losers, with some institutions getting a 10.6% increase and others getting a cut of 14.1%.

The House proposed their new formula be phased in over three years, with one-third of 2021-22 funds allocated based on a 3-year enrollment average and two-thirds based on 2020-21 appropriation levels.  Increases for this year would be capped at 10% for individual community colleges, with amounts over the cap redistributed to institutions below the cap. The formula would flip to two-thirds enrollment-based funding next year, with all funding based on enrollment for 2023-24. There is a provision in the bill that holds harmless Mott Community College and Lansing Community College this year, which both stand to lose funds in this budget year.  To see how your community college fares under this proposal, see this House Fiscal analysis.

HB 4401 also includes new language that restricts community colleges from requiring COVID-19 vaccination as a prerequisite for enrollment or attending in-person instruction.  Similar language is expected to be added to HB 4400 for universities when that bill is taken up later this week.  The House has proposed a similar enrollment-based funding for universities in that bill, but does not include hold harmless provisions for the University of Michigan-Ann Arbor or Wayne State University, which both lose funding in the bill.  This House Fiscal analysis of HB 4400 outlines the impact on universities.

The Senate and Governor would need to agree with the House’s new formulas for them to take effect. Senate Bills 93 and 94, also passed on Tuesday, do not include the concept, instead agreeing with Gov. Whitmer’s budget recommendation for across-the-board 2% increases for university and community college operations. Given the lack of research about the long-term impacts of these new funding formulas and the negative impacts on some institutions for this year, MEA believes this funding approach needs more study and should not be adopted this budget year.

For both the PreK-12 and Higher Education budgets, changes are still likely as we await final revenue figures at the May 21 Consensus Revenue Estimating Conference.  Stay tuned for more updates from MEA.