Introduced
by
To substitute an across-the-board cut of approximately 1.13 percent per-school district for the “pro-rated” cuts contained in Gov. Granholm’s budget-cutting executive order of January, 2003. The pro-rated cut affects lower-funded rural districts more than higher-funded urban districts, due to the higher proportion in the former of "discretionary nonmandated" grants, compared to Constitutionally-mandated foundation grants. The lower-funded schools get more of the discretionary money in an effort to narrow spending disparities, so they take a relatively bigger “hit” when this funding is reduced, as under the pro-rated cuts. The executive order cuts were imposed to close an expected $127 million deficit in the fiscal year 2002-2003 state school aid fund, which is the source of school operating funds. State law requires the governor to execute the pro-rated cuts unless the legislature adopts a different formula. The pro-rated cuts for each school district can be viewed at: <a href="http://www.house.mi.gov/hfa/PDFs/proration_b.pdf "> ESTIMATED FY 2003 Proration And Other Options to Reduce Expenditures</a>, from the non-partisan House Fiscal Agency. Additional background information is available at <a href="http://www.mackinac.org/4970"> Michigan's Budget Challenge</a> and <a href="http://www.mackinac.org/5033">Information on Cuts to School Districts</a> from the Mackinac Center.
Referred to the Committee on Appropriations
Reported without amendment
With the recommendation that the substitute (S-3) be adopted and that the bill then pass.
Substitute offered
To replace the previous version of the bill with one which would transfer $61 million from the general fund to the state School Aid Fund to make up current year deficit caused by actual tax receipts being less than previously appropriated state aid to school districts. The amendment is in response to a May 13, 2003 revenue estimation which shows a current year school aid funding shortfall of some $91 million. It expresses a consensus between the legislature and the governor that it is too late in the school year to cut funding to school districts. There is not a consensus regarding the source of the money needed to make up the shortfall.
The substitute passed by voice vote
Passed in the Senate 37 to 0 (details)
To transfer $61 million from the general fund to the state School Aid Fund to (partially) make up current year deficit caused by actual tax receipts being less than previously appropriated state aid to school districts. The amendment is in response to a May 13, 2003 revenue estimation which shows a current year school aid funding shortfall of some $91 million. It expresses a consensus between the legislature and the governor that it is too late in the school year to cut funding to school districts. There is not a consensus regarding the source of the money needed to make up the shortfall. See also House Bill 4032.
Referred to the Committee on Appropriations
