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June 2003
Four-Day School Week Option Approved
School Employees Service Credit
Post-Retirement Earnings Limit
Ed-Flex Contract Waivers Before Legislature Again
Long-Term Care Benefits
Charter School Expansion Bill Passes Senate
School Aid Budget
Higher Education Budget
Community College Budget
Links to current Legislative Action Alerts
may be found on the Legislative Hotline page of this website.

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Four-Day School Week Option Approved
Senate Bill 364 (Sen. Valde Garcia, R-Howell) eliminating the mandate that school districts provide at least 180 days of instructions is awaiting the Governor's signature. Under this bill:
- A school district would determine the number of days necessary to complete a school year, providing at least 1,098 hours of pupil instruction.
- If a district changes its schedule to a 4-day school week it must hold at least 2 public hearings on the issue.
- The "snow days" provision is changed from 2 days to 30 hours (the average school day is 6.5 hours this would cover more than four days of missed hours of instruction).
- Districts will no longer have to comply with the 75% attendance requirement on any given day or be penalized for not doing so.
Senate Bill 364 is tie barred with House Bill 4453, amending required hours for retirement, which is currently stalled in the Senate Education Committee. If House Bill 4453 does not move to the Governor's desk soon, she will likely veto Senate Bill 364.

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School Employees Service Credit
House Bill 4453 (Rep. Jacob Hoogendyk, R-61) would require the retirement board to grant one year of service credit to a member who had been employed and remunerated for services performed for not less than 1,020 hours in a school fiscal year. Currently, the act requires granting of the service credit for services performed for not less than six hours per day and for not less than 170 days in a school fiscal year.
Under the bill, the retirement system would have to calculate service credit using the payroll cycle reported to the retirement system by the member's employer in determining whether a member was entitled to service credit.
- If a biweekly payroll cycle were reported, the member could not accrue more than 60 hours in a payroll cycle.
- If a semimonthly payroll cycle were reported, the member could not accrue more than 72 hours in a payroll cycle.
- For a monthly payroll cycle, no more than 138 hours in a payroll cycle could accrue, and no more than 396 hours could accrue in a payroll cycle if a quarterly payroll cycle were used.
Under current law, a part-time member of the school employees retirement system or member employed for a fraction of the school fiscal year receives service credit for full-time service on the
basis of 30 or more hours per week and proportionate credit for less than 30 hours.
In order to prevent the accumulation of service credit for part-time members and members working only part of a school fiscal year from being accelerated, the bill would also specify that service credit for these employees would be received based on 60 or more hours per bi-weekly period and proportionate credit for less than 60 hours.
House Bill 4453 has passed the House and is currently in the Senate Education Committee where passage is questionable.

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Post-Retirement Earnings Limit
House Bill 4340 (Rep. Bruce Caswell, Hillsdale) would expand the exceptions to the earnings limitation for retirees. It would make the exceptions apply to retirees who retired on or before July 1, 2002, rather than on or before July 1, 2000. Further, the bill would specify that beginning July 1, 2004, the exceptions would apply to retirees who retired on or before July 1, 2003.
This bill has passed the House and is currently before the Senate Education Committee.

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Ed-Flex Contract Waivers Before Legislature Again
The House Education Committee has approved a package of bills that would allow the state superintendent of public instruction to waive state statutes and rules, except those dealing with health and safety or those controlling creation of a charter school, or certain federal requirements, in accord with federal law allowing educational waivers for a district for up to five years.
- House Bill 4724 (Rep. Judy Emmons, R-Sheridan) would allow provisions of the State School Aid Act to be waived under an educational flexibility and empowerment contract, issued under the Revised School Code. House Bill 4724 is tie-barred to House Bill 4693 so it could not become law unless that bill also were enacted.
- House Bill 4693 (Rep. Brian Palmer, R-Romeo) would create a section called the Educational Flexibility and Empowerment Law, in order to permit school districts to apply for an Ed Flex Contract.
- Under House Bill 4693, a school district could file an application with the department listing the schools to be covered under the Ed-Flex contract and the rules to be waived, as well as the performance goals to be met. The school board would have to conduct two public hearings to discuss the contents of the application and adopt a resolution before submitting it to the state.
- If approved, the superintendent and district would promptly enter into a contract. If disapproved, the superintendent's notification to the district would specify the reasons for the disapproval, and the school district could submit a revised application. If the state superintendent did not notify a school district within 60 days of receiving an application, it would be considered approved.
These bills passed the House on June 19 and have been sent to the Senate Education Committee. The MFT&SRP is opposed House Bill 4742 and House Bill 4693.

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Long-Term Care Benefits
House Bill 4285 (Rep. Stephen Ehardt, R-Lexington) requires the Michigan Public School Employees Retirement System, upon written application of a retirant, to withhold the entire monthly premium for voluntary long-term care insurance for the retirant, the retirement allowance beneficiary, and health insurance dependents, who elected coverage in a long-term care insurance plan authorized by the retirement system.
If the entire monthly premium for retirants, beneficiaries, and dependents were greater than the retirement allowance, the system will have to withhold the entire retirement allowance and apply it to the premium balance.
The bill defines "long-term care insurance" as group insurance authorized by the retirement system for retirants, retirement allowance beneficiaries, and health insurance dependents to cover the costs of services provided to retirants, retirement allowance beneficiaries, and health insurance dependents, from nursing homes, assisted living facilities, home health care providers, adult day care providers, and other similar service providers.
House Bill 4285 was signed by to Governor on June 10 and became Act 17, Public Acts of 2003, and was given immediate effect.

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Charter School Expansion Bill Passes Senate
Senate Bill 393 (Senator Wayne Kuipers-Holland) passed the Senate on June 19 and is currently before the House Education Committee. This bill would:
- Provide for a twenty per year increase in the number of public school academies (PSAs) chartered by state public universities, capping the number at 350 in the year 2012.
- Restrict an additional number of contracts issued by state public universities for high school PSAs to five per year until 2012.
- Permit PSAs to issue bonds.
- Remove the prohibition against a community college's chartering a PSA in the Detroit school district.
- Allow two or more existing charter schools to establish a new charter school (a joint high school) and exempt joint high schools from the proposed five-per-year cap.
- Require authorizing bodies to hold a PSA board of directors accountable for the school's academic performance.
- Provide that a PSA's board of directors would have to make available to the public information concerning its membership, operation and management, financial standing, teacher salary and certification, and health and safety.
- Allow PSAs to give enrollment priorities to siblings of students, children of employees and board members, and students of PSAs that formed a joint high school.
- Allow a state public university to issue up to 15 contracts for "urban high school academies" in the Detroit school district on a competitive basis. An urban high school academy would have to include at least grades 9 through 12 within three years after beginning operation, and could include other grades as specified in its contract. Contract priority would have to be given to entities with net assets of at least $50 million, that had a stated goal of increasing high school graduation rates, and that would operate at least grades 9-12 within three years of beginning operation.
- Permit a public school academy from providing instruction to a pupil residing outside the school districts, community college, or ISD boundaries through distance learning and counting the pupil in membership as provided under the State School Aid Act.
- Regulate public schools' contracts with educational management companies.
- Restrict Bay Mills Community College to charter schools within the cap limitations.
The Michigan Federation of Teachers and School Related Personnel opposes Senate Bill 393.

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Balanced Budgets Expected Soon
Legislative Leaders have indicated that a balanced 2003-04 budget may be completed by the end of June or early July. The budget picture has been helped by federal funds paid to the state as part of the federal tax cut enacted last month. Federal funds could be used to help preserve the Michigan Merit Scholarship fund, to help shore up the K-12 budget for next year, or to create a new stabilization fund for schools to help stave off the possibility of any pro-ration cuts in school aid next year.
House Bill 4401 passed the Senate on June 18 and will to be referred to a Conference Committee where a final budget will be decided. Listed below is a comparison of the Executive, House, and Senate proposals for the 2003-04 school aid budget.
SCHOOL AID
Fiscal Year 2003 - 2004
House Bill 4401
| SECTION |
CURRENT LAW (BEFORE PRORATION) |
GOVERNOR |
HOUSE |
SENATE |
Sec. 6 (4) Pupil Membership Blend |
A sum of 80% of current September pupil count plus 20% of the previous February count. |
A sum of 50% of current September pupil count plus 50% of previous the February count. (Saves $40 million). |
Retains current law. |
Concurs with House |
Sec. 6(4)(y ) Declining Enrollment for Lower Peninsula
1,550 pupils or less & 4.5 pupils per square mile & allow 3 year average of pupil membership |
For FY 2003 - 2004, allows small, rural districts located in Lower Peninsula only, to use a 3-year average membership blend if that results in higher membership than the actual current year blend. |
Eliminated. |
Retains current law, but eliminates "Lower Peninsula only" provisions. |
Concurs with House.
Adds language requiring the Senate and House K-12 subcommittees to perform a study and develop a recommendation on the issue of declining enrollments by December 1, 2003. |
Sec. 11 (3) Proration Language |
Requires an across-the-board proration when revenues are expected to fall short of appropriations. |
Concurs with Current Law. |
Replaces language with a requirement for the State Budget Director to develop a fair and equitable method of reducing payments. |
Inserts language requiring any proration to be calculated and applies as described in a new subsection(4). |
NEW Sec. 11 (4) |
N/A |
N/A |
N/A |
New proration language: an equal per dollar amount of proration if necessary, with 95% of the total proration absorbed by local districts and the remaining 5% of the shortfall deducted from intermediate school district payments. |
Sec. 20 (l0) Consolidation Language |
Foundation allowance for districts that consolidate after June 1, 2002, to be equal to the lesser of $8,000 or the highest foundation allowance among the consolidated districts plus $50. |
Gives districts consolidating after June 1, 2002, a pupil-weighted average foundations allowance plus $10, up to a maximum of $8,000. |
$1 million - Gives consolidating districts and districts that are annexed a pupil-weighted average foundation allowance.
Creates a consolidation incentive program that pays $50 per pupil in a consolidated district, with payments to district capped at $500,000 per consolidated district. |
Deletes new section and grants pupil-weighted foundation allowance of consolidating districts with no additional money. |
Sec. 20 (19) Small Class-Size Grants |
$26.7 million Increases the foundation allow- ance of districts that received a grant under former Section 32e for small class-size grants by the per- pupil amount of the small class- size grant in FY 2001 - 2002. |
Retains current law. |
$20.1 million. |
$23.6 million Adds two flexibility provisions: 1. Reduces class size in at least one of grades K-3, rather than all grades, and 2. If districts meet AYP, then can apply for waiver to use funds in new manner. |
Sec. 20 (20) Foundation Allowance Increase for Districts with a Reform Board |
Increases the foundation allow- ance of a district with a reform board in place by a per-pupil amount sufficient to result in additional revenue to the district of $15 million. |
Concurs with Current Law. |
Eliminates language that would allocate $15 million on a per-pupil basis to the Detroit School District in FY 2003 - 2004. |
Concurs with House with minor technical adjustments. |
Sec. 22a & Sec. 22b Foundation Allowances |
See Chart March Capitol Report |
Same as FY 2003. |
Same as FY 2003. |
Same as FY 2003. |
Sec. 24 Court-Placed Pupils |
$8.9 million |
$10.9 million |
$10.9 million Concurs with Governor. |
$8 million Adds new language related to excluding certain costs prior to calculating the reimbursement of other costs. |
Sec. 26a Renaissance Zones Reimbursement |
$10.2 million |
$27.9 million |
$27.9 million Concurs with Governor. |
$27.9 million Concurs with House. |
Sec. 31a At-Risk |
$314.2 million |
$314.2 million (Expands the allowable uses of funds to include tutorial services and programs that combine academic, enrichment, and recreational activities.) |
$314.2 million Concurs with the Governor and includes the following additional uses; early childhood programs, ESL programs, and wireless technology programs under Section 98b. |
$314.2 million Allows uses of funds in current law plus tutorial services, early childhood programs for ages 0-5, and reading programs under former Section 32f. |
Sec. 31d (1) School Lunch |
$18.1 million |
$21.3 million |
$21.3 million Concurs with Governor. |
$18.3 million Concurs with House, and adds language specifying how non K-12 districts and PSAs shall be paid (to reflect current practice at the MDE). |
Sec. 32c Early Childhood Grants |
$2 million |
$0 Repeals section. |
$1 million |
$1.9 million |
Sec. 32d School Readiness |
$72.8 million |
$72.8 million |
$72.8 million Concurs with Governor. |
Appropriates $66.9 million for this section, but combines the purposes of former Section 32b, Parental Involvement and Education (PIE) with School Readiness. Districts will get formula grants based on current law for school readiness distributions, but can use the funds for either school readiness or PIE. |
NEW Sec. - 32j ISD Early Literacy & Parent Education |
Not Applicable |
$3.3 million |
Concurs with Governor. |
$0 Does not include this section. |
Sec. 41 Bilingual Education |
$4.2 million |
$4.2 million |
$4.2 million Concurs with Governor. |
$3.1 million Language is added to state that funds shall be used solely for instruction in speaking, reading, writing, or comprehension of English. Also, pupils shall not be instructed or counted under this section for more than three years. |
Sec. 56 ISD Special Education Millage Equalization |
$38.1 million |
$36.9 million |
$36.9 million Concurs with Governor. |
$36.9 million Concurs with House. |
Sec. 57 Gifted & Talented |
$5 million |
$0 Repeals section effective October 1, 2003. |
$1.5 million |
$320,000 to ISDs that provide support services for Advanced and Accelerated pupils. $1.3 million to local districts for the development and operation of Advanced and Accelerated program. Summer Institutes are not funded. |
Sec. 61a Vocational Education |
$31 million |
$30 million |
$30 million Concurs with Governor. |
$30 million Concurs with House. |
Sec. 62 ISD Vocational Education Millage Equalization |
$9.8 million |
$9.5 million |
$9.5 million Concurs with Governor. |
$9.8 million |
Sec. 67/68 Career Preparation |
$22.2 million |
$0 Repeals section effective October 1, 2003. |
$0 Concurs with Governor. |
$10 million to plan and implement the Michigan Career Preparation System |
Sec. 74 Bus Driver Safety |
$1.6 million |
$1.6 million Retains current law. |
$1.6 million Concurs with Governor. |
$5,500,000 |
Sec. 81 (1) ISD General Operations |
$95 million |
$88.7 million |
$91.4 million |
$95 million |
Sec. 94a CEPI - & Standards & Poors |
$6.8 million ($2.5 to maintain Standards & Poors contract) |
$2.8 million (Standards & Poors not renewed) |
$4.9 million ($2 million allocated to continue Standards and Poors contract) |
Appropriates $2,000,000 in state funds for CEPI. Also appropriates $1,000,000 in new funding from Innovative Strategies Federal grants to CEPI for a contract with Standards and Poors for the School Evaluation Services web site, if the CEPI determines a contract is warranted |
Sec. 96 Golden Apple Awards |
$1.3 million |
$0 Repeals section effective October 1, 2003. |
$0 Concurs with Governor. |
$0 Concurs with House. |
Sec. 98 Michigan Virtual High School |
$5 million ($3.5 million allocated to Wireless Technology Program) |
$2 million ($1 million for Wireless Technology Program) |
$1 million for the MVU and transfers the Wireless Technology Program to new Section 98b. |
$4 million in State funding and $2.3 million in Federal Improvement Teacher Quality grants to MVU. Funding is to support the development, implememtation, and operation of the Michigan Virtual High School, and to provide professional development to teachers. $4.7 million is earmarked for professional development activities, and the MVU is permitted to make at least 5 hours as hours of on-line professional development available. Districts are required to have their full-time teachers take 5 hours of professional development throught MVU, and count those 5 hours as pupil instruction. Further, a new provisions is added allowing home-schooled or nonpublic students to use the services of MVU without cost (unless cost is assigned to a public school student), if their resident public district subscribes to services at MVU. |
NEW Sec. 98b Learning Without Limits (Wireless Technology) |
Not Applicable. ($3.5 million for Learning Without Limits grants is currently in Section 98) |
Not Applicable. ($1 million for Learning Without Limits grants is currently in Section 98) |
$24.7 million in total funds and adds new language that expands a pilot program to purchase wireless technology for 6th grade pupils. |
$21,393,100 in Federal funds Concurs with House on the structure and goals of the program. |
Sec. 99 Math/Science Centers |
$10.2 million |
$0 Section repealed effective October 1, 2003. |
$5 million |
$5 million in State funds and $2.5 million in Federal math/science partnerships grants. Technical changes are included to clean up the section. Preference in awarding the Federal grants shall be given to the existing 33 centers. |
Sec. 99a School Health Curriculum Grants |
$3.2 million |
$0 Section repealed effective October 1, 2003. |
$0 Concurs with Governor. |
$3 million to restore this section |
Sec. 101 New Days and Hours of Pupil Instruction |
N/A |
N/A |
N/A |
Eliminates the mandate that school districts provide at least 180 days of instructions. A school district would determine the number of days necessary to complete a school year, providing at least 1,098 hours of pupil instruction. If a district changes its schedule to a 4-day school week it must hold at least 2 public hearings on the issue. The "snow days" provision is changed from 2 days to 30 hours. |
Sec. 105 (17) - (20) Schools of Choice Guarantee |
If fewer than 90% of the pupils living in a local school district attend school in that district, the district foundations allowance payment shall be paid as if exactly 75% were enrolled in the district for 02 - 03, 50% for 03 - 04, and 25% for 04 - 05. |
Eliminates |
Eliminates Concurs with Governor. |
Eliminates Concurs with House. |
Sec. 107 (1) Adult Education |
$77.5 million |
$20 million -- Language added to allow providers to charge tuition unless participant's income is at or below 200% of federal poverty level. |
$28.5 million |
$40 million (419.3 million State and $20.7 million federal) and changes the maximum reimbursement percentage to 53.33% of what districts received in FY 2001-2002. |
Sec. 108 Adult Learning (PAL) |
$20 million |
$0 Section repealed effective October 1, 2003. |
$0 Concurs with Governor |
$10 million to restore this section |
Sec. 147 Public School Employees' Retirement Rate |
12.99% |
If districts participating the School Bond Loan Fund assist State Treasurer with refinancing bonds.
Rate will revert back to 14.37% for all districts if this does not occur. |
12.99% Concurs with Governor. |
12.99% Concurs with House, but adds language specifying that "elegible" districts that do not refinance shall pay 14.37% in estimated retirement contribution rates. |
Source: Senate Fiscal Agency
bk:opeiu42afkcio - June 19, 2003

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Higher Education Budget Highlights
House Bill 4396 (Shulman, R-West Bloomfield), the Higher Education Budget, passed the House and the Senate and has been referred to a conference committee where the final budget will be decided. Listed below is a comparison of the Executive, House, and Senate proposals.
State University Operating Funds. The Governor, House, and Senate include a 6.74% reduction for University Operations, Agricultural Experiment Station, Cooperative Extension Service, and the King-Chavez-Parks Programs.
Per-Student Floor Funding. Senate deletes reference to floors of $4,600, $4,800, $5,800, and $9,100 per-student and replaces with one $4,000 per-student funding floor funded from the Merit Award Trust Fund. (Sec. 409)
Tuition Restraint. Governor, House, and Senate replace 8.5% or $425 limit on tuition increases with a directive to adopt reasonable tuition and fee increases. (Sec. 436)
Infrastructure, Technology, Equipment, and Maintenance (ITEM). The Senate appropriates $100,000 to each of the 15 universities, and a total of $100,000 is distributed to independent colleges through the General Degree Reimbursement Program; funding is from the Merit Award Trust Fund.
Michigan Merit Awards. The House and Senate do not concur with the Governor's reduction of awards from $2,500 to $500 beginning with the class of 2004, nor do they concur with the Governor's proposed Michigan Opportunity Scholarship Program. The Senate adds $70l7 million to the FY 2002 - 2003 Merit Award amount of $64.3 million, for an FY 2003 - 2004 total of $135 million.
Michigan Public School Employees Retirement System (MPSERS). House and Senate include legislative intent to retain FY 2002-03 contribution rate (12.99%) for FY 2003 - 2004. (Sec. 437)
Higher Education - Fiscal Year 2004: (% change from current funding)
| College |
FY 2003 Current Law |
Governor's Recommended |
House Recommendation |
Senate Recommendation
|
| GF/GP |
$1,741,466,933 |
$1,632,687,000 (-6.25%) |
$1,632,687,000 (-6.25%) |
$1,642,240,348 (-5.7%) |
| All Funds |
$1,831,501,735 |
$1,715,437,000 (-6.3%) |
$1,775,437,000 (-3.06%) |
$1,818,181,274 (-0.7%) |
| Eastern Michigan |
$84,569,756 |
$78,873,300 (-6.74%) |
$78,873,300 (-6.74%) |
$78,973,339 (-6.6%) |
| Michigan State |
$314,572,583 |
$293,383,700 (-6.74%) |
$293,975,900 (-6.55%) |
$293,483,722 (-6.7%) |
| U of M - AA |
$350,837,633 |
$327,206,100 (-6.74%) |
$327,206,100 (-6.74%) |
$327,306,045 (-6.7%) |
| U of M - Dearborn |
$27,013,503 |
$25,193,900 (-6.74%) |
$25,193,900 (-6.74%) |
$25,293,938 (-6.4%) |
| U of M - Flint |
$23,225,711 |
$21,661,300 (-6.74%) |
$21,661,300 (-6.74%) |
$21,761,282 (-6.3%) |
| Wayne State |
$244,766,818 |
$228,279,900 (-6.74%) |
$228,279,900 (-6.74%) |
$228,379,908 (-6.7%) |

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Community College Budget Highlights
House Bill 4388 (Shulman, R-West Bloomfield), the Community College Budget, passed the House and the Senate and has been referred to a conference committee where the final budget will be decided. Listed below is a comparison of the Executive, House, and Senate Proposals.
Community College Operations. The Governor reduced each college's base appropriation by 6.7% below current-year levels. The House concurred with the Governor, yet provided an additional $121,500 for Gogebic Community College, and reduced each college's At-Risk appropriation by $4,500, or $121,500 in total, to provide the funds for Gogebic. The Senate reduced the appropriation for Wayne County Community College by $450,000 below the Governor's recommendation and increases the appropriations for Alpena, Bay de Noc, and Gogebic Community College by $150,000.
At-Risk Student Success Program. The Governor reduced the program by 6.7% and distributed the reduced total to individual colleges via the existing program formula. The House reduced each school's appropriation an additional $4,500, or $121,500 in total, with individual college reductions beyond the Governor ranging from 2.2% to 6.7%. The Senate restored the House reductions to the levels recommended by the Governor.
Tuition Incentive Program (TIP). The House reduced the program by $4.0 million and moved the money into university operating budgets. The Governor's recommended level of support is $9,250,000. The Senate appropriated $4,717,500 (51% of the total) for the TIP and included language outlining program parameters of the TIP scholarship program..
Renaissance Zone Tax Reimbursement. The Governor, with the House concurring, recommended an increase in program funding pursuant to anticipated increased program needs. The Senate concurred with the Governor and House recommendation.
Postsecondary Access Student Scholarship (PASS). The Governor, with the House concurring, eliminates the program. The Senate accepted the Governor's and House recommendation.
Public School Employee Retirement Act amendments. The Senate concurred with the Governor and the House to eliminate language requiring any amendments to the public school employee retirement act that require prefunding of health benefits to also apply to community colleges. The Senate accepted new language, with minor modifications, added by the House to limit the number of reports submitted to the retirement system for purposes of calculating retirement benefits to no more than four per year. (Sec. 216)
Comparison to Governor's Recommendation. The Senate proposal is above the Governor's recommendation by $4,717,500 Gross, and is at the Governor's recommended GF/GP funding level.
FY 2004 Operational Funding: (% change from current funding)
Community College |
FY 2003 Current Law |
Governor's Recommendation |
House Recommendation |
Senate Recommendation |
| GF/GP |
$307,512,112 |
$289,013,100 (-6.02%) |
$289,013,100 (-6.02) |
$293,730,600 (-6.02%) |
| All Funds |
$309,808,094 |
$289,013,100 (-6.71%) |
$289,013,100 (-6.71%) |
$289,013,100 (-5.19%) |
| Henry Ford |
$21,912,770 |
$20,436,700 (-6.74%) |
$20,436,700 (-6.74%) |
$20,436,600 (-6.74%) |
| Kirtland |
$2,951,218 |
$ 2,752,400 (-6.74%) |
$ 2,752,400 (-6.74%) |
$2,752,300 (-6.74%) |
| Lansing |
$31,093,928 |
$28,999,400 (-6.74%) |
$28,999,400 (-6.74%) |
$28,999,300 (-6.74%) |
| Wayne County |
$16,620,124 |
$15,500,600 (-6.74%) |
$15,500,600 (-6.74%) |
$15,050,600 (-9.44%) |

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