UPDATED May 23

Countering historic budget proposals from Gov. Gretchen Whitmer, the state House and Senate have approved separate school spending recommendations for the 2022-23 school year.

Gov. Gretchen Whitmer had proposed an $18.4 billion education budget that invests heavily in student wellness and educator recruitment and retention.

The Senate passed a $17.9 billion school aid budget on a 20-15 vote, without any support from Democrats.

The House passed its own $20 billion school aid budget. The vote was 65-38 with most Republicans in favor and most Democrats opposed.

Now, a legislative conference committee will meet beginning the week of May 23 to reconcile these very different spending plans into a final budget for 2022-23.

NOTE: Remember these all remain proposals at this time. Following the Consensus Revenue Estimating Conference on May 20, negotiations are expected to resolve differences in the budgets. Final action on the budget is expected by the Legislature’s summer break.

Consensus Revenue Estimating Conference (May 23 update)

The Consensus Revenue Estimating Conference (CREC) was held Friday, May 20. The CREC officials revised the revenue estimates up from the January CREC with a $1.26 billion increase in the School Aid Fund for the current 2021-22 fiscal year, which ends Sept. 30. In the January 2022 estimates, there was a $3.6 billion surplus in the School Aid Fund — so, with Friday’s additional $1.26 billion, there is a $4.8 billion surplus of unspent school dollars for this year.

For the upcoming 2022-23 fiscal year, officials revised revenues up an additional $948.7 million in the School Aid Fund. The House, Senate, and Governor’s office are expected to begin negotiations this week to finalize the 2022-23 School Aid Budget.

PK-12 School Aid Budget Overview

On May 5, the House passed HB 5795 (the School Aid budget), to the House floor, while the Senate approved their own version, (SB 832), on May 4.

In the beginning of February, the Governor recommended a $18.4 billion plan for PK-12 schools for the coming year. Whitmer’s recommended budget includes a $435 increase to the school foundation allowance, which would bring per-student funding to $9,135.

The Governor’s budget recommendation prioritizes Michigan students and would help them thrive in an educational environment. It allocates funds to be used for the mental health and wellbeing of students, and would also target staffing shortages through retention bonuses for current educators and financial assistance for aspiring educators.

In contrast, the Senate’s School Aid Budget calls for about $17.9 billion in total spending for the School Aid budget, with a $450 increase in the foundation allowance, bringing it to $9,150 per pupil. The Senate also included $50 per student for programs to address student learning loss.

The Senate’s proposal strips away many of the Governor’s new investments for education, such as student mental health assistance and funding for educator attraction and retention. In addition, the Senate proposal shifts nearly $1 billion from the School Aid Fund to community colleges and universities, while at the same time reducing the amount dedicated to colleges and universities from the state’s General Fund.

Meanwhile, the House is proposing $20 billion for the School Aid Budget. However, House leaders only want to increase the foundation allowance by $300, which would bring the per-student allowance to $9,000.

Instead, the House proposes putting an extra $2.9 billion of state and federal COVID money into savings and paying down long-term debt, as opposed to investing the additional funds on student mental health and addressing the educator shortage. The Michigan Public School Employees Retirement System (MPSERS) would receive $1.7 billion under the House proposal.

In addition to paying down debt in MPSERS — which is around 60% funded, but still has $33.7 billion in unfunded liability — the House proposal places $674 million into a School Aid Stabilization Fund and an additional $425 million into a MPSERS retirement reserve fund.

The House is also proposing $56.2 million for intermediate school districts to develop a “learning pods” pilot program. This voucher program would award up to two “tokens” worth $500 each, which recipients could spend on private summer tutoring programs.

The House also wrote into its budget proposal a provision banning transgender athletes from competing in sports, as well as a requirement for school districts to create disciplinary policies for school officials or staff who provide information about abortion referrals.

Here is a comparison of some of the other proposed funding:

Educator Recruitment and Retention

The Governor is proposing a $2.3 billion recruitment and retention effort for K-12 teachers and other staff members. Starting in the fall, all full-time K-12 public employees would receive a $2,000 retention bonus, and an additional $2,000 in 2023. Teachers and other certified staff (such as counselors, social workers and nurses) would also qualify for an additional $3,000 in 2024 and $4,000 in 2025.

Furthermore, Whitmer’s proposal would create a $100 million allocation for a $10,000-a-year scholarship for future educators and educators in graduate programs. The budget proposal also includes $150 million for stipends for student teachers and another $150 million for “grow your own” programs for districts to recruit and train prospective educators from the ranks of paraprofessionals and other support staff.

Also included in the Governor’s proposal is $50 million for programs to provide coaching and cohort support to new teachers through at least the first three years of a teacher’s service, as well as grants for mentor stipends and other mentoring expenses. Additionally, the Governor is proposing $75 million for regional programs to help attract, retain and mentor educators.

The Senate proposal limits educator attracting and retention to just $25 million for the MI Student Teacher Scholarship Program and $5 million for bus driver recruitment, training and retention.

The House budget proposal would provide $71 million to institutions of higher education for a scholarship program for eligible students enrolled in educator preparation programs. It would cap scholarships at the lesser of $4,125 per semester or the cost of tuition and fees.

The House proposal also provides $214 million to districts and ISDs for “grow your own” programs. Local school districts and ISDs would receive funding from a $150 million pot for wages, daycare, health care, housing, and other costs associated with student teaching. The assistance would be capped at $23,000 for student teachers in select cities and $16,000 for student teachers in all other cities. Lastly, the House proposal would grant $50 million to districts for the purpose of implementing “Troops to Teachers,” a six-month mentorship training program for veterans.

Mental Health

The Governor’s proposed budget would include funding for new and existing programs geared toward student mental health. Whitmer’s proposal includes $150 million to expand the TRAILS mental health program statewide, as well as $25 million to help districts purchase mental health screening tools. This funding also gives school employees access to professional development and same-day consultations via telehealth with behavioral health clinicians, to help them respond to complex student mental health needs. Also included in the Governor’s proposal is $50 million for ISDs to hire mental health professionals and $11 million to open an estimated 40 school-based health clinics.

The Senate proposes $10 million to expand TRAILS and $15 million to open more school-based health clinics, as well as $15 million for the Student Mental Health Apprenticeship Retention and Training (SMART) program.

The House did include $44.3 million in funding for school-based health clinics.

Increased Staffing for Student Support

The Governor’s 2022-23 proposal includes $120 million in one-time funding for districts and ISDs to increase the number of school psychologists, social workers, counselors and nurses, as well as $240 million in the current budget year. For staff hired under this section, the Governor’s proposal would provide 100% of funding for the first year, 66% for the second year and 33% for the third year. After three years, recipient districts would be required to fully fund the positions.

The Senate and the House budgets do not include funding to increase student support.

Special Education

The Governor’s budget proposal would increase funding for special education by $150 million.

The Senate did not include any increases.

The House’s proposal would increase funding by $210 million.

At-Risk Schools and Students

The Governor’s budget would increase funding for at-risk students by $222.0 million.

Neither the Senate nor the House are proposing any increases.

Isolated District Funding

The Governor’s budget includes an increase of $421,000 in the allocations for small, isolated districts — districts that are greater than 250 square miles and have fewer than 10 students per square mile.

The Senate budget does not include this increase.

The House concurs with the Governor.

Rural Transportation (new)

The House is proposing $50 million for transportation costs for rural districts through the following formula: $250 per student for districts with fewer than 10 students per square mile; $200 per student for districts with 10-14 students per square mile; and $150 per student for districts with 15-19 students per square mile.

Before- and After-School Programs

The Governor proposes $50 million in new funding for before- and after-school programs.

The Senate did not include this funding.

The House concurs with the Governor.

School Infrastructure

The Governor proposes $171 million for school infrastructure.

Neither the Senate nor House budgets include this infrastructure funding.

Adolescent Health Services

The Governor proposes an increase of $11 million for adolescent health care services.

The Senate proposes no increase.

The House proposes an increase of $14.3 million.

ISD Mental Health and Support Services

The Governor is proposing an increase of $50 million to ISDs for mental health and support services for general education pupils.

The Senate did not include this increase. The House did include a $40.0 million increase in this.

Student Safety

The Governor proposes increasing funding for school safety grants by $51 million.

The Senate proposal maintains the current $10 million funding for school safety grants.

The House proposal includes a $227.5 million increase and adds firearms detection software as an allowable use of funding.

Teach for America

The Governor’s budget would eliminate the $1 million in annual funding currently provided to Teach for America, which hosts a summer training institute in Detroit to recruit teachers into a master teacher fellowship.

The Senate proposal keeps the $1 million funding level.

The House proposes increasing funding to $20 million.

Oxford Response

The Governor is proposing $6 million for Oxford Community Schools to help the district recover from the tragic shooting in December that claimed four lives. The funds would be used for personnel and additional student supports.

The Senate adopted a Sen. Rosemary Bayer (D-Keego Harbor) amendment that would allocate $6.0 million that may be used for personnel and additional student supports, including psychologist, family liaisons, mental health staff, school security, additional learning time, and the physical restoration of the school building.

The House proposes $6.8 million to the district. This would include $3.5 million over two fiscal years for a psychologist, family school liaison, mental health director, school resource officer, safety and security assessments, public relations consulting, private security, summer school, insurance copays, and legal services; $2.3 million for one-time costs, including physical repairs, a third-party review, a mass notification system, and security cameras; and $1 million with no specified requirements.

The Governor proposes waiving the 75% attendance requirement under Sec. 101(3)(d) for Oxford Community Schools and to count the days/hours the district closed in response to an act of violence as pupil instruction under Sec. 101. The Senate and the House did not include this in their proposals.

The Governor also wants results from summative assessments administered during the 2021-22 school year to not be used for retention decisions or educator evaluations for the district. The Senate did not include this in its proposal, while the House did.

Separate from the budget, the Senate unanimously passed Senate Bills 940 and 941 to address current school year needs for Oxford — those bills are awaiting action in the House.

University and Community College Budgets

The Governor is proposing a 5% increase for universities’ and community colleges’ ongoing operations, plus an additional 5% in one-time operation funds.

The Governor is also continuing her commitment to college affordability by including in her budget $55 million for the Michigan Reconnect program, which provide free community college to eligible adults without a college degree. Further, she proposes increasing the Michigan Competitive Award from $1,000 to $1,200 and the Tuition Grant Award from $2,800 to $2,900. The House continued the $55 million for Michigan Reconnect and added $148.5 million for a Michigan Reconnect expansion.

The Senate finalized its higher education and community college budget recommendations by passing SB 842 and SB 843 on May 4.

The Senate proposes a 5% one-time performance funding increase and a 5% ongoing operations increase for higher education and a 5.5% one-time performance funding increase and a  5.5% ongoing operations increase for community colleges, both using money from the School Aid Fund. The Senate’s new funding formula has three equally weighted components: a FY 2020-21 student headcount, FY 2020-21 all degrees conferred, and an across the-board amount.

The Senate proposal increases the Michigan Competitive Award from $1,000 to $1,500 and increases the Tuition Grant Award from $2,800 to $3,000. It also adds $361 million for a new scholarship grant program that would provide 2022 Michigan high school graduates with a grant of up to $3,000 per year for community colleges or tribal colleges, and up to $6,000 per year for students in public universities or independent colleges.

In addition, the Senate’s proposal includes using $581.2 million in School Aid Fund dollars to pay off the outstanding unfunded actuarial accrued retirement liabilities of the seven universities that are members of the Michigan Public School Employees Retirement System: Central Michigan, Eastern Michigan, Ferris State, Lake Superior State, Northern Michigan, Michigan Tech, and Western Michigan.

The Senate proposal also includes $131,300 for each university, for a total of $1,969,500, to develop a student retention program, as well as $33,300 for each university, for a total of $499,500, that may be used to establish a pregnant and parenting student services program. This was a priority of Michigan Right to Life.

The House’s recommended budgets for universities (HB 5785) includes an increase of 3.2% for university operations, a one-time payment of $200 million to MPSERS, and almost $180 million in additional funding for mental health services in Michigan’s 15 state universities.

For community colleges (HB 5779), the House proposes a 6.8% increase for operational funding. The House also agreed with the Governor’s recommendation of $55 million for Reconnect Michigan

In addition, the House proposal adds $10 million from the federal Coronavirus State Fiscal Recovery Fund for the creation of the Community College Academic Catch-up program, which would be administered by the Michigan Community College Association. Community colleges would apply for grant funding to support various summer educational programs for students entering college for the 2022-23 academic year.

Finally, the House proposes adding $500,000 from the School Aid Fund for pregnant and parenting student services.

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MEA will continue analyzing and monitoring the budget situation and providing updates as they are available. If you have any questions, email MEA lobbyist Andy Neumann at aneumann@mea.org.