FY 2024-25: COMMUNITY COLLEGES
Summary: As Passed by the House
House Bill 5504 (H-1)
Analyst: Perry Zielak
Difference: House
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 --
Federal 0 0 0 0 --
Local 0 0 0 0 --
Private 0 0 0 0 --
Restricted 544,517,500 465,920,800 468,811,200 (75,706,300) (13.9)
GF/GP 0 0 0 0 --
Gross $544,517,500 $465,920,800 $468,811,200 $ $ ($75,706,300) (13.9)
Note: Appropriation figures for FY 2024-25 include all proposed appropriation amounts, including amounts designated as "one-
time."
Overview
The Community Colleges budget, contained in Article II of the compiled School Aid Act, provides funding for operational
support of the 28 public community colleges located throughout the state and some retirement costs for employees who
participate in the state public school employee retirement system. Community colleges offer a wide variety of educational
programs, including traditional two-year transfer programs, associate degrees, career and technical education,
developmental and remedial education, continuing education, and baccalaureate programs in a limited number of areas.
The colleges are supported primarily through a combination of state aid, local property tax revenue, and tuition and fees.
FY 2023-24 FY 2024-25
Enacted House
Major Budget Changes from FY 2023-24 Enacted Appropriations (as of 2/7/24) Change
1. Community College Operations Increase Gross $357,961,900 $11,860,200
Executive includes a net increase of $9.0 million School Aid Fund (SAF) Restricted 357,961,900 11,860,200
for community college operations, a 2.5% increase. This includes: GF/GP $0 $0
• $8.9 million SAF, or 2.5%, increase to operations grants for
community colleges, which would be distributed through the
performance funding formula.
• $49,100 SAF increase based on FY 2022-23 North American Indian
Tuition Waiver (ITW) program costs reported by institutions.
Attainment of the performance funding increase would be conditioned
on restraining in-district tuition and fee increases to the greater of 5.0%
or $241. Projected funding increases for individual community colleges
would range from 2.0% to 3.8%. Total funding for operations would be
$366.9 million SAF.
House includes a net increase of $11.9 million School Aid Fund (SAF)
for community college operations, a 3.3% increase. This includes:
• $11.8 million SAF, or 3.3%, increase to operations grants for
community colleges, which would be distributed through the
performance funding formula.
• $49,100 SAF increase based on FY 2022-23 North American Indian
Tuition Waiver (ITW) program costs reported by institutions.
Attainment of the performance funding increase would be conditioned
on restraining in-district tuition and fee increases to the greater of 4.5%
or $217. Projected funding increases for individual community colleges
would range from 2.7% to 4.8%. Total funding for operations would be
$369.8 million SAF.
House Fiscal Agency 1 5/9/2024
 FY 2023-24 FY 2024-25
Enacted House
Major Budget Changes from FY 2023-24 Enacted Appropriations (as of 2/7/24) Change
2. Michigan Public School Employee Retirement System Gross $105,800,000 ($43,700,000)
(MPSERS) State Share of Unfunded Actuarial Accrued Liability Restricted 105,800,000 (43,700,000)
(UAAL) Stabilization Payment GF/GP $0 $0
Executive decreases funding by $43.7 million SAF for the state's share
of community colleges' MPSERS UAAL, a 41.3% decrease. The state's
share is the difference between the calculated UAAL contribution to the
system and the employer contribution cap of 20.96% of payroll set by
the Public School Employees Retirement Act (MCL 38.1341). Total
funding for the state share of MPSERS would be $62.1 million SAF.
House concurs.
3. MPSERS Community College Payroll Cap Reduction Gross $0 $5,700,000
Executive adds $5.7 million SAF to lower community college's MPSERS Restricted 0 5,700,000
UAAL employer contribution cap from 20.96% to 20.0%. Payments GF/GP $0 $0
would be made to MPSERS through the community colleges. Total
funding for the MPSERS community college payroll cap reduction would
be $5.7 million SAF. House concurs.
4. MPSERS Normal Cost Offset Gross $23,000,000 ($1,200,000)
Executive decreases funding by $1.2 million SAF for the community Restricted 23,000,000 (1,200,000)
colleges' MPSERS normal cost offset, a 5.2% decrease, due to GF/GP $0 $0
maintaining the assumed rate of return at 6.0%. Total funding for the
MPSERS normal cost offset would be $21.8 million SAF. House concurs.
5. Infrastructure, Technology, Equipment, Maintenance, and Safety Gross $32,836,600 (32,836,500)
Executive removes $32.8 million SAF of one-time funding for Restricted 32,836,600 (32,836,500)
Infrastructure, Technology, Equipment, Maintenance, and Safety, which GF/GP $0 $0
would allow community colleges to repair, improve, or maintain existing
buildings, facilities, equipment, technological and physical infrastructure,
student housing, and school safety measures. House concurs but
maintains $100 placeholder for the program. Requires individual
community college allocations to be distributed based on calculated FY
2022-23 fiscal year equated student (FYES) enrollment. Allocations
would not be distributed until January 2025.
6. Removal of FY 2023-24 One-Time Appropriations Gross $15,530,000 ($15,530,000)
Executive removes $15.5 million SAF of one-time funding that was Restricted 15,530,000 (15,530,000)
included in the FY 2023-24 budget to support the following: GF/GP $0 $0
• Critical Incident Mapping ($5.0 million SAF)
• Career and Education Navigators for Adult Learners ($5.0 million
SAF)
• Michigan Reconnect Entry Point Program ($5.0 million SAF)
• Kalamazoo Valley Community College Workforce Development
Grants ($530,000 SAF)
House concurs.
Major Boilerplate Changes from FY 2023-24
Sec. 205. Ordering From Businesses in Deprived and Depressed Communities – REVISED
Encourages community colleges to ensure businesses in economically distressed areas compete for and perform
contracts for services and/or supplies. Executive revises language to encourage community colleges to ensure
geographically disadvantaged business enterprises compete for and perform contracts for services and/or supplies.
House concurs.
Sec. 216c. Infrastructure, Technology, Equipment, Maintenance, and Safety Appropriation Detail – REVISED
Executive deletes language that details infrastructure, technology, equipment, maintenance, safety and housing (ITEMS)
repayment categories that ITEMS funding could be used for by community colleges and language on program eligibility
and distribution of funding. House revises language to remove capital outlay project authorization as a restriction to
receiving ITEMS funding.
House Fiscal Agency 2 5/9/2024
Major Boilerplate Changes from FY 2023-24
Sec. 216d. ITEMS Certification and Payment Detail – DELETED
Executive deletes language that details the certification process community colleges must complete and have approved
by the State Budget Director in order to receive an ITEMS payment. House concurs.
Sec. 217b. Community College Tuition and Fee Restraint and Annual Rate Report – REVISED
Requires community colleges to report tuition and fee rates, the annual cost of tuition and fees for a 30 credit course load,
and tuition and fee increases from the prior year to CEPI by the last business day of August; details tuition restraint
requirements in order to receive performance funding for FY 2023-24; and requires community colleges to limit in-district
tuition and fee increases to 4.5% or $205, whichever is greater. Specifies community colleges that violate the tuition
restraint cap may have their appropriation adjusted. Executive revises language that limits FY 2024-25 in-district tuition
and fee increases to 5.0% or $241, whichever is greater, and limits FY 2025-26 in-district tuition and fee increases to the
greater of 5.0% or $253. House revises language that limits FY 2024-25 in-district tuition and fee increases to 4.5% or
$217, whichever is greater.
Sec. 228. Communication With the Legislature – RETAINED
Executive deletes language that forbids a community college from taking disciplinary action against an employee for
communicating with the legislature. House retains.
House Fiscal Agency 3 5/9/2024
 FY 2024-25 Community Colleges Operations Appropriations
As Passed by the House
% of Formula: 30% 10% 10% 10% 30% 5% 5% 100%
FY 24 FY 2023 Total FY 25
Indian Indian Indian
Total Tuition FY 2023-24 Performance- Performance- Local Tuition Indian Tuition Tuition
FY 2023-24 Waiver Base Performance- Completion Completion Contact Strategic Total Formula Waiver Waiver Waiver FY 2024-25 %
Appropriation Payment Appropriation Sustainability Improvement Number Rate Hours Admin. Value Distribution Cost Adjustments Payment Appropriation Change
Alpena $6,327,100 $26,500 $6,300,600 $62,565 $51,226 $14,086 $32,328 $32,612 $23,300 $10,428 $226,500 $21,800 (4,700) $21,800 $6,548,900 3.5%
Bay de Noc 6,299,200 113,900 6,185,300 61,420 56,346 13,136 32,687 41,926 32,966 10,237 248,700 100,000 (13,900) 100,000 6,534,000 3.7%
Delta 16,690,500 48,200 16,642,300 165,258 48,460 54,727 44,069 160,261 29,557 27,543 529,900 24,800 (23,400) 24,800 17,197,000 3.0%
Glen Oaks 2,939,000 0 2,939,000 29,184 7,782 8,573 23,161 25,582 0 4,864 99,200 1,800 1,800 1,800 3,040,000 3.4%
Gogebic 5,367,600 37,900 5,329,700 52,924 14,113 7,808 31,885 23,402 13,891 8,821 152,800 48,400 10,500 48,400 5,530,900 3.0%
Grand Rapids 20,966,400 122,000 20,844,400 206,985 73,338 70,428 55,196 282,880 26,415 34,498 749,700 111,100 (10,900) 111,100 21,705,200 3.5%
Henry Ford 24,943,900 14,100 24,929,800 247,553 66,014 103,885 66,014 269,882 23,850 41,259 818,500 6,400 (7,700) 6,400 25,754,700 3.3%
Jackson 13,887,400 33,300 13,854,100 137,571 40,777 30,594 36,686 106,874 18,523 22,929 394,000 42,300 9,000 42,300 14,290,400 2.9%
Kalamazoo Valley 14,539,400 57,500 14,481,900 143,806 38,348 43,773 53,145 158,909 28,985 23,968 490,900 37,200 (20,300) 37,200 15,010,000 3.2%
Kellogg 11,290,200 21,000 11,269,200 111,903 29,841 35,979 29,841 93,347 27,995 18,651 347,600 35,400 14,400 35,400 11,652,200 3.2%
Kirtland 3,792,900 19,800 3,773,100 37,467 9,991 12,952 9,991 35,227 24,965 6,244 136,800 25,800 6,000 25,800 3,935,700 3.8%
Lake Michigan 6,321,600 3,600 6,318,000 62,738 18,828 16,523 16,730 63,603 10,126 10,456 199,000 6,000 2,400 6,000 6,523,000 3.2%
Lansing 35,752,700 63,500 35,689,200 354,394 97,686 96,672 109,773 242,790 22,121 59,066 982,500 81,200 17,700 81,200 36,752,900 2.8%
Macomb 37,661,900 26,500 37,635,400 373,720 99,659 99,223 114,651 388,213 21,226 62,287 1,159,000 23,700 (2,800) 23,700 38,818,100 3.1%
Mid Michigan 5,798,500 55,600 5,742,900 57,027 28,074 16,495 15,207 65,239 16,003 9,505 207,500 75,500 19,900 75,500 6,025,900 3.9%
Monroe County 5,286,800 2,100 5,284,700 52,477 17,286 16,991 13,994 54,913 20,527 8,746 184,900 1,800 (300) 1,800 5,471,400 3.5%
Montcalm 3,966,700 9,500 3,957,200 39,295 43,303 14,426 10,479 31,027 22,956 6,549 168,000 1,900 (7,600) 1,900 4,127,100 4.0%
Mott 17,823,200 31,500 17,791,700 176,672 47,113 46,253 47,113 130,015 22,338 29,445 498,900 5,800 (25,700) 5,800 18,296,400 2.7%
Muskegon 10,223,600 12,700 10,210,900 101,394 30,282 27,137 42,350 84,437 26,328 16,899 328,800 21,300 8,600 21,300 10,561,000 3.3%
North Central 4,011,000 142,200 3,868,800 38,417 25,480 12,499 25,584 44,067 21,603 6,403 174,100 162,500 20,300 162,500 4,205,400 4.8%
Northwestern 10,650,300 177,000 10,473,300 104,000 30,793 25,975 43,405 82,314 19,445 17,333 323,300 196,800 19,800 196,800 10,993,400 3.2%
Oakland 24,755,900 22,300 24,733,600 245,605 65,495 102,496 81,905 317,446 20,933 40,934 874,800 33,800 11,500 33,800 25,642,200 3.6%
Schoolcraft 14,742,500 30,700 14,711,800 146,088 68,068 56,839 53,481 201,327 23,935 24,348 574,100 21,000 (9,700) 21,000 15,306,900 3.8%
Southwestern 7,695,500 12,700 7,682,800 76,290 20,344 13,094 36,993 49,624 20,058 12,715 229,100 29,500 16,800 29,500 7,941,400 3.2%
St. Clair County 8,226,400 16,000 8,210,400 81,529 25,975 35,087 37,522 79,348 17,410 13,588 290,500 24,100 8,100 24,100 8,525,000 3.6%
Washtenaw 15,938,200 12,700 15,925,500 158,141 48,079 145,745 58,545 266,868 28,511 26,357 732,200 24,600 11,900 24,600 16,682,300 4.7%
Wayne County 19,197,900 4,600 19,193,300 190,590 57,250 51,836 50,824 189,566 17,340 31,765 589,200 4,400 (200) 4,400 19,786,900 3.1%
West Shore 2,865,600 14,400 2,851,200 28,312 21,159 7,879 7,550 21,630 9,250 4,719 100,600 12,000 (2,400) 12,000 2,963,800 3.4%
$357,961,900 $1,131,800 $356,830,100 $3,543,330 $1,181,110 $1,181,110 $1,181,110 $3,543,330 $590,555 $590,555 $11,811,100 $1,180,900 $49,100 $1,180,900 $369,822,100 3.3%