The bill amends the State School Aid Act of 1979, making significant adjustments to funding for public schools in Michigan for the fiscal year ending September 30, 2026. The total appropriation from the state school aid fund is reduced from $17,769,551,300 to $15,039,488,000, while the general fund allocation decreases from $78,830,600 to $400,000. However, the target foundation allowance is increased from $9,608.00 to $10,025.00. The bill also introduces a new section, 201i, and modifies the allocation of funds to districts and public school academies, reducing the total amount for the 2025-2026 fiscal year from $4,144,000,000 to $3,803,000,000, while ensuring that districts receive an amount equal to their 1994-95 per-pupil revenue.

Additionally, the bill emphasizes mental health and safety initiatives by increasing allocated funds from $150 million to $350 million for the 2025-2026 fiscal year, while removing previous allocations for nonpublic schools. It establishes provisions for the reimbursement of special education costs and clarifies the responsibilities of public school academies regarding special education services. The bill also proposes significant changes to the Michigan public school employees' retirement system (MPSERS), increasing the maximum allocation for payments to participating entities from $955 million to $1.536 billion and raising the average MPSERS rate cap per pupil from $740 to $1,100. Overall, the bill aims to enhance funding management and compliance with federal laws while addressing the educational needs of Michigan's public school system.

Statutes affected:
House Introduced Bill: 388.1611, 388.1617