FY 2024-25: SCHOOL AID
Summary: As Passed by the Senate
Senate Bill 751 (S-1) as Amended
Analysts: Jacqueline Mullen and Noel Benson
Difference: Senate
FY 2023-24 From FY 2023-24
Enacted FY 2024-25 FY 2024-25 FY 2024-25 FY 2024-25 Enacted
as of 2/7/24 Executive House Senate Conference Amount %
IDG/IDT $0 $0 $0 $0 $0 --
Federal 2,200,793,500 2,272,793,500 2,286,093,500 2,272,793,500 72,000,000 3.3
Local 0 0 0 0 0 --
Private 0 0 0 0 0 --
Restricted 19,170,957,800 18,285,630,200 18,173,830,100 17,992,823,200 (1,178,134,600) (6.1)
GF/GP 87,900,000 51,550,000 97,975,800 59,750,000 (28,150,000) (32.0)
Gross $21,459,651,300 $20,609,973,700 $20,557,899,400 $20,325,366,700 ($1,134,284,600) (5.3)
Note: Appropriation figures for FY 2024-25 include all proposed appropriation amounts, including amounts designated as "one-
time."
Overview
The School Aid budget makes appropriations to the state's 537 local school districts, 285 public school academies (PSAs),
and 56 intermediate school districts (ISDs) for operations and certain categorical programs. It also appropriates funds to
the Michigan Department of Education (MDE), Michigan Department of Lifelong Education, Advancement, and Potential
(MiLEAP), Center for Educational Performance and Information (CEPI), and other entities to implement certain grants
and other programs related to K-12 education.
FY 2023-24 FY 2024-25
Enacted Senate
Major Budget Changes from FY 2023-24 Enacted Appropriations (as of 2/7/24) Change
1. Foundation Allowances (Secs. 22a & 22b) Gross $10,514,200,000 $397,000,000
Executive increases by $316.0 million Gross ($69,400 GF/GP) to Restricted 10,514,163,600 396,930,600
provide a $241 (2.5%) per-pupil increase in the foundation allowance, GF/GP $36,400 $69,400
from $9,608 to $9,849.
House increases by $280.0 million Gross ($69,400 GF/GP) to provide a
$217 (2.25%) per-pupil increase in the foundation allowance, from
$9,608 to $9,825.
Senate increases by $397.0 million Gross ($69,400 GF/GP) to provide
a $302 (3.1%) per-pupil increase in the foundation allowance, from
$9,608 to $9,910.
2. Foundations: Cyber Schools Reduction (Secs. 22a & 22b) Gross NA ($26,000,000)
Executive reduces cyber school foundation allowances to 80% of the Restricted NA ($26,000,000)
proposed foundation allowance, or $7,879 per pupil, for an estimated GF/GP NA $0
savings of $27.0 million SAF.
House does not include. Maintains cyber school foundation allowances
at $9,150.
Senate reduces cyber school foundation allowances to 80% of the
proposed foundation allowance, or $7,928 per pupil, for an estimated
savings of $26.0 million SAF.
3. Foundations: Cost Adjustments (Secs. 22a & 22b) Gross NA ($245,200,000)
Executive reduces by $245.2 million SAF to reflect updated consensus Restricted NA (245,200,000)
cost estimates for pupil membership counts and taxable values. GF/GP NA $0
House concurs with Executive.
Senate concurs with Executive.
House Fiscal Agency 1 6/11/2024
FY 2023-24 FY 2024-25
Enacted Senate
Major Budget Changes from FY 2023-24 Enacted Appropriations (as of 2/7/24) Change
4. Michigan Public School Employees' Retirement System Gross $2,474,389,000 ($853,150,000)
(MPSERS) (Secs. 147a, 147c, 147e, & 147f) Restricted 2,473,789,000 (852,950,000)
Executive reduces state support for K-12 MPSERS costs by $758.9 GF/GP $600,000 ($200,000)
million Gross, including a reduction of $200,000 GF/GP. Revises as
follows:
Reduces by $631.7 million SAF the other post-employment benefits
(OPEB) contribution for unfunded actuarial accrued liability (UAAL)
by removing the requirement that the contribution must be at least
equal to the contribution in the prior year (the OPEB system is
expected to be fully funded in the next valuation, which would satisfy
the statutory condition authorizing the removal of the UAAL
contribution floor).
Revises $11.9 million one-time SAF to ongoing for including ISDs
and district libraries in the cost offset (Sec. 147a(3)).
Provides $94.3 million ongoing SAF to effectively lower the 20.96%
UAAL contribution cap for districts, ISDs, and district libraries to an
estimated 20.00% (Sec. 147a(4)). (Sec. 147f provided $48.5 million
one-time SAF to effectively lower the cap for districts and ISDs to an
estimated 20.46% in FY 2023-24; this one-time funding is removed).
Provides $84.1 million one-time MPSERS Retirement Obligation
Reform Reserve Fund for a statutorily required reduction of 50 basis
points in the payroll growth assumption, from 0.75% to 0.25% (this
continues the accelerated reduction of the payroll growth
assumption). Removes $215.8 million one-time MPSERS
Retirement Obligation Reform Reserve Fund appropriated in FY
2023-24 to accelerate the reduction to 0.75% and shifts associated
costs to SAF.
Reduces by $41.3 million Gross (including a reduction of $200,000
GF/GP) for other cost adjustments.
House reduces state support for K-12 MPSERS costs by $510.7 million
Gross, including a reduction of $600,000 GF/GP. Revises as follows:
Concurs with Executive to reduce by $631.7 million SAF the OPEB
contribution for UAAL.
Concurs with Executive to revise $11.9 million one-time SAF to
ongoing for the ISD and district library cost offset (restructures to
Sec. 147a(2)).
Provides $290.8 million ongoing SAF to effectively lower the 20.96%
UAAL contribution cap to an estimated 18.00%. Provides intent that
this appropriation continue to be increased in future fiscal years until
the effective cap reaches 0.00% (restructures to Sec. 147a(3)).
Concurs with Executive to provide $84.1 million one-time MPSERS
Retirement Obligation Reform Reserve Fund to reduce the payroll
growth assumption to 0.25%. Concurs with Executive to remove
$215.8 million one-time MPSERS Retirement Obligation Reform
Reserve Fund.
Provides $51.6 million SAF for districts to reimburse employees for
a portion of their 3% contribution associated with the healthcare
premium subsidy benefit. Provides intent that this appropriation
continue to be increased in future fiscal years until the 3%
contribution is fully reimbursed (new Sec. 147g).
Reduces by $41.3 million Gross (including a reduction of $600,000
GF/GP) for other cost adjustments.
Senate reduces state support for K-12 MPSERS costs by $853.2 million
Gross, including a reduction of $200,000 GF/GP. Revises as follows:
Concurs with Executive to reduce by $631.7 million SAF the OPEB
contribution for UAAL.
Concurs with Executive to revise $11.9 million one-time SAF to
ongoing for the ISD and district library cost offset (Sec. 147a(3)).
[continued on next page]
House Fiscal Agency 2 6/11/2024
FY 2023-24 FY 2024-25
Enacted Senate
Major Budget Changes from FY 2023-24 Enacted Appropriations (as of 2/7/24) Change
4. Michigan Public School Employees' Retirement System
(MPSERS) (Secs. 147a, 147c, 147e, & 147f) (continued)
Concurs with Executive to provide $84.1 million one-time MPSERS
Retirement Obligation Reform Reserve Fund to reduce the payroll
growth assumption to 0.25%. Concurs with Executive to remove
$215.8 million one-time MPSERS Retirement Obligation Reform
Reserve Fund.
Concurs with Executive to reduce by $41.3 million Gross (including
a reduction of $200,000 GF/GP) for other cost adjustments.
Does not include a reduction in the UAAL cap or provide a
healthcare contribution reimbursement.
5. Special Education (Secs. 51a, 51c, 51d, 51e, 53a, 54, & 56) Gross $2,231,796,100 $381,400,000
Executive increases special education expenditures by $428.4 million Federal 461,000,000 72,000,000
Gross ($0 GF/GP) for a total of $2.7 billion. Revises as follows: Restricted 1,770,796,100 309,400,000
Increases by $293.9 million SAF for revised cost estimates. GF/GP $0 $0
Increases by $72.0 million in federal funding.
Increases by $12.5 million SAF and revises $76.2 million one-time
SAF to ongoing to continue fully funding special education pupils'
foundation allowances separately from the cost reimbursements
required by Durant v. State of Michigan.
Increases by $50.0 million SAF for a total of $124.2 million SAF
funding to certain ISDs related to their special education millage.
Revises the funding formulas (currently, a millage equalization
program and a millage incentive program) to a formula based on the
difference between an ISD's special education costs and its state
and local special education revenue, assuming a levy of 3.0 mills or
their statutory cap, whichever is less. The formula provides the
amount necessary to cap an ISD's uncompensated special
education costs at an estimated 22.6% of their total special
education costs for FY 2024-25.
House increases special education expenditures by $376.2 million
Gross ($0 GF/GP) for a total of $2.6 billion. Revises as follows:
Increases by $292.9 million SAF for revised cost estimates.
Concurs with Executive to increase by $72.0 million federal.
Increases by $11.3 million SAF and revises $76.2 million one-time
SAF to ongoing to fully fund special education foundation
allowances.
Maintains $74.2 million SAF in funding to certain ISDs related to
their special education millage, but revises millage equalization
formula ($40.0 million SAF) to a formula based 50% on taxable
value per special education head count and 50% on taxable value
per unreimbursed special education costs. Maintains $34.2 million
SAF for the millage incentive program.
Senate increases special education expenditures by $381.4 million
Gross ($0 GF/GP) for a total of $2.6 billion. Revises as follows:
Concurs with Executive to increase by $293.9 million SAF for
revised cost estimates.
Concurs with Executive to increase by $72.0 million Federal.
Increases by $15.5 million SAF and revises $76.2 million one-time
SAF to ongoing to fully fund special education foundation
allowances.
Concurs with House to revise millage equalization formula for ISDs.
House Fiscal Agency 3 6/11/2024
FY 2023-24 FY 2024-25
Enacted Senate
Major Budget Changes from FY 2023-24 Enacted Appropriations (as of 2/7/24) Change
6. Per-Pupil Mental Health & School Safety Grant (Sec. 31aa) Gross $328,000,000 ($178,000,000)
Executive provides $300.0 million SAF ($150.0 million ongoing; $150.0 Federal 0 0
million one-time) for per-pupil payments to districts, ISDs, and the Restricted 310,000,000 (160,000,000)
Michigan Schools for the Deaf and Blind for activities to improve mental GF/GP $18,000,000 ($18,000,000)
health and improve school safety. (This section provided $310.0 million
one-time SAF and $18.0 million one-time GF/GP in FY 2023-24.) Strikes
nonpublic schools as eligible recipients and strikes requirement that at
least 50% of funds be spent on mental health. Expands allowable uses
to include emergency infrastructure needs with MDE approval. Adds
requirements that recipients use funding for evidence-based or
emerging best practices based on a thorough needs assessment that
includes resource mapping.
House provides $300.0 million SAF ($150.0 million ongoing; $150.0
million one-time), $18.0 million one-time GF/GP, and $13.3 million
federal Governor's Emergency Education Relief (GEER) Fund. Requires
MDE to begin distributing funds in the October School Aid payment,
including 100% of the federal funding. Retains nonpublic schools as
eligible recipients and maintains requirement that at least 50% of funds
be spent on mental health. Concurs with Executive to include emergency
infrastructure needs. Further revises allowable uses, including requiring
permission from MDE for any expenditure not explicitly listed. Concurs
with Executive on evidence-based practices for mental health
expenditures (does not include requirement for school safety
expenditures).
Senate provides $150.0 million SAF ($50.0 million ongoing; $100.0
million one-time). Concurs with Executive to strike nonpublic schools as
eligible recipients. Concurs with Executive on boilerplate, except
concurs with House to maintain requirement that at least 50% of funds
be spent on mental health.
7. MPSERS Reserve Fund (Sec. 147b) Gross $0 $0
Executive maintains current law, which establishes the MPSERS Restricted 0 0
Retirement Obligation Reform Reserve Fund. GF/GP $0 $0
House concurs with Executive.
Senate deposits $150.0 million SAF into the fund.
8. At-Risk (Sec. 31a) Gross $952,000,000 $122,620,500
Executive increases by $23.8 million SAF (2.5% in line with the proposed Restricted 952,000,000 122,620,500
foundation increase) for a total of $975.8 million SAF for instructional GF/GP $0 $0
programs and direct noninstructional services for at-risk pupils. Adds
provision for certain districts (DPSCD and partnership districts with at
least 90% economically disadvantaged pupils) to use up to 30% of funds
for retention and recruitment of instructional staff and staff providing
services related to mental, emotional, or physical health.
House increases by $70.1 million SAF (2.25% in line with the proposed
foundation increase plus an additional 5.0%) for a total of $1.0 billion
SAF. Adds provision for DPSCD to use up to 40% of funds for salary and
benefit increases for instructional staff or to hire additional instructional
staff.
Senate increases by $122.6 million SAF (12.9%) for a total of $1.1 billion
SAF. Allows recipients to use up to 60% of funds to support retention
and recruitment of instructional staff and staff providing services related
to mental, emotional, or physical health.
9. School Aid Rainy Day Fund (Sec. 11z) Gross $0 $0
Executive maintains current law, which establishes the School Aid Restricted 0 0
Countercyclical Budget and Foundation Stabilization Fund. GF/GP $0 $0
House concurs with Executive.
Senate deposits $100.0 million SAF into the fund.
House Fiscal Agency 4 6/11/2024
FY 2023-24 FY 2024-25
Enacted Senate
Major Budget Changes from FY 2023-24 Enacted Appropriations (as of 2/7/24) Change
10. Great Start Readiness Program (Secs. 32d & 39) Gross $543,320,000 $82,243,100
Executive increases by $106.2 million SAF for a total of $649.6 million Restricted 542,720,000 82,493,100
Gross ($600,000 GF/GP) for school readiness preschool programs for GF/GP $600,000 ($250,000)
4-year-old children. Revises as follows:
Increases by $42.7 million SAF to increase the allocations per child
in line with the 2.5% foundation increase plus an additional 5%
increase, from $9,608 to $10,342 for a full-day program and from
$4,804 to $5,171 for a part-day program. Increases the extended
program allocation by 5% from $11,530 to $12,107 per child.
Increases by $63.5 million SAF to serve an estimated 6,800
additional children.
In addition to an ongoing allocation of $10.0 million SAF for
transportation costs, retains an appropriation of $18.0 million one-
time GSRP Reserve Fund.
Revises $250,000 one-time GF/GP as ongoing for a total of
$600,000 ongo