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Home > MSMA News > $162 million budget includes incentives, targeted funds – July 5, 2017

$162 million budget includes incentives, targeted funds – July 5, 2017

The state budget that was passed with nearly unanimous support by the Legislature in the early morning hours of July 4th has provisions and reform initiatives that affect how the $162 million increase in funding for public schools can be spent.

The list below includes some of the key proposals.

  • The budget provides an additional $48.4 million in 2017-2018 and $113.6 million in 2018-2019.
  • There is a provision that requires at least 50 percent of the increase in state share for those two fiscal years be used to lower local contributions, but there is an exemption that reads:
    “For the 2017-2018 fiscal year only, articles approved by voters that earmarked additional state funding contributions for increased expenditures for school purposes for fiscal year 2017-18 are permitted as approved.”
  • Pre-school funding, starting in 2018-2019, will be based on projected enrollment and ultimately adjusted by the October count. This will provide up-front money for new programs.
  • Directs additional funding to economically disadvantaged students that will be a targeted allocation, meaning districts will have to report on its use.
  • Funding for the declining enrollment reduction is eliminated in the budget, as proposed in the governor’s budget.
  • Title I funds, as recommended in the governor’s original budget and reflected in early spreadsheets (ED 279s) sent out to districts, will no longer be subtracted from a district’s allocation.  The new student/teacher ratios proposed by the governor to reflect that change also are included in the budget just passed.
  • As anticipated, funding for system administration, which was completely eliminated in the governor’s budget, is targeted in the budget just passed to encourage cooperation in School Management and Leadership Centers. It allows the commissioner to authorize the creation of nine to 12 centers that will be established through inter-local agreements.
  • Participation in a center is voluntary but incentivized using system administration funding. The per-pupil amount for system administration in 2017-2018 is reduced from $235 per student to $135. After the initial cut, the rate would go to $138 per student in 2018-2019, but $46 of that must be used for participation in the regional cooperatives. In 2019-2020, the rate would go to $141, but $94 must be for regional cooperative participation. In 2020-2021, system administration rates would be determined by the commissioner of education and only school districts that are participating in a regional center would be eligible for funding.
  • There are several special education initiatives, including the creation of a special education budgetary hardship adjustment for the unexpected cost of a student placed in a program by the state as a result of a student transfer appeal. More details will be provided on special education provisions as they become clarified.
  • The budget continues to show two calculations of progress made toward 55 percent, including 55 percent of the cost of Essential Programs and Services and 55 percent if the state’s contribution to the unfunded liability of teacher retirement is included.
  • Language in the budget allows the Department of Education to determine the required local mill rate 30 days after the budget was passed – a provision that recognizes the increased funding was not approved until the 11th hour.

The Department of Education will be updating the spreadsheets (ED 279s) going out to districts reflecting the increased amount of General Purpose Aid and the changes made to the funding formula.  Information about their release will be sent out to MSBA and MSSA members when it becomes available.

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