David Hecker
President

Lois Lofton Doniver Secretary-Treasurer

Louise Somalski
Legislative Coordinator

NOVEMBER 2007

Links to current Advocacy Campaigns
may be found in the Legislative Action Center

DON'T SIGN PETITION!

"Ax the Tax," a business coalition formed to win the repeal of the recently enacted sales tax on services announced its petition drive effort on Thursday, November 1. The petition drive is part of an overall strategy to repeal the tax, including hopes the petition drive will spur a legislative effort to end the tax before it takes effect on December 1.

The Senate has since passed Senate Bill 845, which delays implementation of the tax from the current December 1 date to December 20 and the House Taxation Committee started its review of the service tax and options to replace it.

Legislators and business groups are considering a number of proposals to repeal and/or replace the tax, since Governor Jennifer Granholm has said any replacement for the tax has to raise the same revenue as the service tax.

Consider this:

• Repeal of the service tax without replacement will result in an immediate $600 to $700 million deficit.
  
  
• The Constitution prohibits the State from running in the red, thus all education budgets would be cut mid-year resulting in large program cuts and lay-offs.
  
  
• $205 million of the new service tax revenue goes directly to support K-12 education.
  
  
• 13% of the Higher Education and Community College Budgets are supported the by new Service Tax.

If the new Service Tax is repealed before a source of adequate replacement revenue is in place, all education in Michigan will suffer severely. PLEASE DO NOT SIGN THE PETITION!

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2007 - 2008 Budget Completed at Last Minute

Lawmakers and the Granholm administration worked into the early morning hours on October 31 to complete the 2007 - 2008 budget making $433 million in cuts. Overall, the 2007 - 2008 budget totals approximately $42.8 billion (including federal funds), of which $9.9 billion comes from the general fund.

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School Aid Budget for 2007 - 2008

House Bill 4359 appropriates a total of $13 billion for the 2007 - 2008 School Aid Budget, of which $35 million comes from general fund monies. School districts will see between $48 and $96 per-pupil increase in funding this year. Major budget changes from 2006-2007 appropriations are listed below.

Basic Foundation Allowance - Sets a new basic foundation allowance at $8,433 per pupil, providing a $48 per pupil increase to every district at or above $8,385 in FY 2006-07, and a $96 increase for those districts or public school academies (PSAs) at $7,108 in FY 2006-07. Those districts and PSAs in between would receive an increase between $48 and $96 per pupil; PSAs from this point forth are put into the same foundation allowance formula as local districts, with the goal to be that all districts and PSAs under $8,385 catch up to that new basic over time. (Chart below for your district.) (Sec. 22b)

Declining Enrollment - Maintains current law funding level at $20 million. (Sec. 29)

Great Start Communities (ECIC) Grants - Increases the appropriation to $1.8 million. (Sec. 32b)

0-3 Secondary Prevention Early Childhood Grants - Increases the appropriation to $2.1 million. (Sec. 32c)

School Readiness Program - District Grants - Increases the appropriation to $80.9 million. $2.3 million funds an increase in the per-child allocation from $3,300 to $3,400. Adds $79,100 for a total of $279,100 to continue funding the longitudinal study of the program. Caps the funding spent under this section for PIE (Parents Involved in Education) programs at the level spent by each district in FY 2006-07 or consecutive fiscal years. (Sec. 32d)

School Readiness Program - Competitive Grants - Increases the appropriation to $12.7 million to fund an increase in the per-child allocation from $3,300 to $3,400. (Sec. 32L)

Intermediate District (ISD) Parent Involvement Grants - Maintains FY 2006-07 appropriation levels. (Sec. 32j)

Early Childhood Education - Adds intent language that if additional revenue is recognized at the January 2008 consensus revenue conference, the following additional appropriations would allocated first: $2.3 million to Section 32d, $750,000 to Section 32b, $400,000 to Section 32l, and $375,000 to Section 32c and the per pupil allocations in Sec. 32d and 32l would increase from $3,400 to $3,500. (Sec. 32)

Transportation Grants (NEW) - Appropriates $1.3 million for districts with total square miles greater than 200 miles and fewer than 5.0 pupils per square mile. (Sec. 77)

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Estimated Transportation Formula

Intermediate School Districts General Operations - Increases funding by 1.0% or $0.8 million to $80.9 million. (Sec. 81)

Early Intervening Model (NEW) - Allows the use of Sec. 81 (ISD Operations) funds for an early intervening program for grades K to 3. (Sec. 82)

Michigan Virtual University - Maintains funding for the My Dream Explorer and eliminates $500,000 to provide online test preparation that aligns with the Michigan Merit Exam. (Sec. 98)

Middle School Math - District Grants - Appropriates $0 and adds boilerplate allowing for any funds remaining from 2006 - 2007 to carry forward and be spend for any purpose. Allows a district to carry forward unexpended funds from 2006 - 2007 and use those remaining funds for any purpose. (Sec. 99c)

MEAP Assessment Testing Costs - Appropriates $25.4 million in School Aid funds, an increase of $5.9 million. The appropriation does not include $4.4 million for the end-of-course exams. (Sec. 104)

Adult Education - Maintains $24 million with payments based on 90% enrollment and 10% completion. (Sec. 107)

MPSERS Contribution Subsidy: Reduces the rate charged to districts from 17.74% of payroll in FY 2006- 07 to 16.72% in FY 2007-08 due to revaluation of system. (Sec. 147)

Other Categorical Eliminations - Eliminates the Conductive Learning Center Evaluation in Section 54b and the FIRST Robotics Grants in Section 99h.

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FY 2007 - 2008 Foundation Allowance (House Bill 4359)

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Higher Education Budget for 2007 - 2008

House Bill 4350 appropriates a total of $1.9 billion ($1.8 billion in general funds) for the 2007 - 2008 Higher Education Budget, up from $1.6 billion in 2006 - 2007 ($1.4 billion in general funds). The state's 15 public universities will receive a 1 percent across-the-board increase in funding and will be reimbursed for the delayed payments withheld during spring of 2007.

Funding:

State University Operations: Base Adjustment - Reflects adjustment of base appropriations to continue subsequent FY 2006-07 reductions contained in PA 17 of 2007 (Senate Bill 436).

State University Operations Increase - Includes 1.0% across-the-board increase - as compared to adjusted FY 2006-07 base. Increase for the three research universities is $8.1 million; increase for remaining 12 state universities is $6.0 million.

Per-Student Funding Floor - Includes revised section, stating legislative intent to allocate funds for per-FYES floor of $3,775 from GF/GP unreserved balances at the close of FY 2006-07. (Sec. 450)

FY 2006-07 University Funding Restoration (NEW) - Provides for one-time supplemental payments to state universities offsetting FY 2006-07 reductions on October 16, 2007. (Sec. 212(2)

Research University Definition (NEW) - Defines "Research University" as a public university classified as a "research university (very high research activity)" under the 2005 Carnegie Classifications. (Sec. 203)

Financial Aid:

State Competitive Scholarships - Reduces $3.0 million appropriation from MHEAA Operating Fund to projected available amount of $1.2 million and reflects recent Executive revision of additional $1.4 million in available federal funds.

Michigan Merit Award and Promise Grant Programs - Reflects net reduction of $24.2 million for transition from Merit Award Program to new Michigan Promise Grant Program.

Tuition Incentive Program (TIP) - Increases TIP appropriation for projected cost increase.

Tuition Grants - Increases required maximum grant award to $2,100 (equal to the actual FY 2006-07 amount) and retains carry-forward requirement. (Sec. 302)

Nursing Scholarship Program - removes requirement that master's degree students be eligible for Nursing Scholarship Program. (Sec. 312)

Students from Eligible County (NEW) - Requires universities to report regarding outreach efforts to enroll students from an eligible county (Macomb County). (Sec. 463)

Legislative Intent Language:

Foreign Auto Manufacturers (NEW) - States legislative intent not to use funds appropriated to state universities for purchase/lease of a vehicle produced by a foreign auto manufacturer. (Sec. 210)

Tuition and Financial Aid Increases - Retains legislative intent that state universities increase their general fund expenditures for institutional financial aid by at least the same percentage as their resident undergraduate tuition/fee rates. (Sec. 436)

Suicide Prevention (NEW) - States legislative intent that each state university develop an education program on preventing suicide and violence. (Sec. 462)

Consolidation of Services (NEW) - Stating legislative intent for research universities to coordinate purchase of goods and services among themselves and includes reference to Midwestern Higher Education Compact. (Sec. 466)

Performance Standards (NEW) - States legislative intent for Legislature to establish university performance standards including the three research universities and the remaining 12 universities. (Sec. 467)

Transfer from Community College (NEW) - States legislative intent that state universities work with community colleges to encourage the transfer of both students and credits. (Sec. 603)

Student Records (NEW) - States legislative intent that state universities provide information from the records of a student to any person to whom the student has authorized disclosure. (Sec. 714)

Listed below are 2007 - 2008 higher education appropriations for AFT Michigan represented universities.

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Community Colleges Budget for 2007 - 2008

House Bill 4360 (Public Act 120 of 2007) appropriates $319 million for the 2007 - 2008 Community College Budget, up from $248 million (all general funds) in 2006 - 2007. The state's 28 community colleges will receive a one-percent funding increase distributed through the task force formula and will be reimbursed for the delayed payments withheld during spring of 2007. Major budget changes from 2006 - 2007 appropriations are listed below.

Operations Funding - Includes a 1% ($2.9 million) increase and distributes funding through the Task Force formula.

Retirement Contributions - Requires community colleges to pay the employer's contributions to MPSERS at a rate of 16.72% of payroll in FY 2007-08 due to revaluation of system.

Payments Delays - Includes $12.9 million funding to restore the reduction of one-half of last monthly state aid payment in FY 2007 and an additional $12.9 million funding to restore the reduction of second-half of last monthly state aid payment in FY 2007.

Wayne County Community College - Appropriates $225,000 to Wayne County Community College to complete the restoration of the $450,000 reduction made in FY 2003 - 2004 which was allocated to 3 other colleges that year (PA 153 of 2006 restored $225,00 of this reduction previously).

Nursing Program Grant Funding Allocation - Deletes language allocating up to $3.5 million of the nursing program grant funding to be distributed to community colleges based upon the number of new nursing students in 2007 - 2008 school year compared to 2006 - 2007 school year. (Sec. 406.)

At Risk Payments - Retains requirement that At-Risk Student funds be paid by November 1st and requires the one-time supplemental payment to restore the last FY 2007 payment that was delayed through E.O. 2007- 3 and P.A. 17 of 2007 be paid to colleges by October 16th. (Sec. 211.)

Abortion Services - Eliminates language that prohibited colleges from using funds appropriated in this Act to provide health insurance coverage for abortion services. (Sec. 230.)

Benefits to Unmarried Partners - Eliminates language stating legislative intent that colleges not extend employee benefits to unmarried partners of employees, except for pre- and post-natal costs. (Sec. 231.)

Parity to Higher Education Budget - States legislative intent that any executive or legislative proposal to increase appropriations to universities will be accompanied by a similar proposal for state-supported community colleges. (Sec. 239.)

At-Risk Student Success Program - Modifies language and requires that equipment or information technology hardware or software purchased using at-risk funds must be associated with the operation of a program designed to address the needs of at-risk students. (Sec. 401.)

Nursing Program Grant (NEW) - Revises language stating legislative intent that the legislature appropriate funding for nursing grants and retains language concerning funding distribution and use and report requirement. (Sec. 405.)

Listed below are 2007 - 2008 appropriations for AFT Michigan represented community colleges.

*The FY 2006-07 Year-to-Date appropriation reflects the restoration of the $16.3 million retirement savings and the $25.7 million delayed payments (E.O. 2007-3 and 2007 PA 17).

**Conference Adjustments include the $225,000 restoration to WCCC for a FY 2003-04 reduction and low tax base adjustment to four colleges which total $350,000 (awarded to colleges with a taxable value base below $1.8 billion and a taxable value per FYES below $900 in FY 2005-06).

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