Under a new state budget adopted by the Legislature on Wednesday, education funding avoided major cuts that had been expected due to the national economic downturn related to the coronavirus pandemic.

In a statement Wednesday night, Gov. Gretchen Whitmer said she would sign the budget, which passed with bipartisan majorities in both chambers.

“When we started the budget process in early February, nobody had an idea of how challenging the coming months would be, no knowledge of the devasting impacts that COVID-19 would have, including the impact to our state budget,” Whitmer said. “But Michigan is strong, and by working collaboratively with our partners in the Legislature we now have a budget I will soon be signing, a budget that funds shared priorities that will move Michigan forward.”

Back in May, the consensus revenue estimating conference predicted the school aid budget would be $1.1 billion short for this year (ending September 30^th) and $1.3 billion short for the coming year.

Fortunately, revenue did not fall as much as was estimated thanks in part to taxes paid on the extended unemployment insurance benefits from the federal government and sales tax from people still making online purchases.

As a result, the K-12 school aid budget and foundation allowance will remain at current levels. The minimum foundation allowance is $8,111 and the state maximum guaranteed foundation allowance is $8,529 – the same as last year.

Community College and Higher Education funding will remain at the same levels as last year.

The overall School Aid Fund (SAF) budget for K-12 for FY 2021 will top out at $15.5 billion.

There is a one-time K-12 Per-Pupil Increase that is not part of the foundation allowance of $95.0 million for payments to districts on an equal per pupil basis. This works out to about $65 per student. These payments are based on a 50 – 50 blend of student count of this year and last year.

There is also $66.0 million appropriated for districts with increased enrollment. While traditional schools with increased enrollment will qualify for these funds as well, this is a significant benefit for cyber schools that saw a significant increase in their student population, but would only get a 25% increase in their student count this year (because of the 75-25 blend set up by the Return to Learn package this summer).

There is an increase of $5.6 million for total of $36.9 million for the allocation for behavioral health providers in schools.

Special Education will see increases of $55.3 million in the SAF and $15.0 million in federal dollars to reflect revised cost estimates for special education. Total estimated special education expenditures for FY 2020-21 are $1.5 billion.

Other spending increases in the budget include $195 million in additional costs for the teacher retirement system and $5 million for teacher retention incentives.

A couple boilerplate changes worth noting are a provision to expand the definition of “two-way interaction” for student count and attendance to allow another district employee (besides the pupil’s teacher) who has responsibility for the student’s learning, grade progression, or academic progress to participate in the interaction. It removes a provision requiring interaction to be initiated by the teacher.

The other boilerplate worth mentioning is a Schools of Choice issue. It revises the deadline for districts to accept applications for nonresident enrollment, so long as the application was received by the end of the first week of school.

Hazard Pay for Teachers and Support Staff

Teachers and support staff should receive their hazard pay from the state this fall. Teacher’s hazard pay was part of the supplemental bills (SB 373 and HB 5265) that passed this summer. These bills allocated $500 for each teacher for a total of $53 million for hazard pay.

This week, the Legislature passed a Department of Treasury budget that included $20 million for hazard pay for School Support Staff. These are payments to school support staff – $250 for full-timers – to recognize the additional time spent outside of normal working hours, hazardous conditions, and additional costs staff have incurred. Part-time employees will receive a pro-rated amount.

As final details are worked out on timelines and process for payments to school employees, MEA will be communicating that with members.