January 11, 2010
LANSING - Governor Jennifer M. Granholm today announced that the $127 per pupil proration for K-12 schools will not be necessary given higher than expected carry-forward from the 2009 fiscal year and a decline in 2010 expenditure estimates from the School Aid Fund. The announcement does not eliminate the difficult decisions school districts face in the current year as a result of the $165 per pupil and other reductions contained in the fiscal year 2010 budget passed by the legislature.
"School districts still have many tough decisions to make this year," Granholm said. "We are facing a crisis in how we fund public education in Michigan. That crisis is reflected in the $165 per pupil funding reduction that remains in effect, and may be more pronounced in the year to come."
The governor's announcement follows today's Revenue Estimating Conference that reported net 2010 fiscal year School Aid Fund revenue is now estimated at $10.458 billion, down $105 million from the May consensus.
On October 22, the state treasurer notified the State Budget Office that the funding appropriated for the School Aid Fund exceeded the amount available for expenditure by $212 million, causing an estimated proration of approximately $127 per pupil as well as reducing other payments.
In December, the state treasurer and budget director notified the governor that preliminary book-closing figures for fiscal year 2009 indicated lapses may be larger than expected and that taxable values reported by county treasurers were higher than anticipated. Preliminary, unaudited 2009 financial statements of the School Aid Fund show $134 million more than previously anticipated, and revised estimates indicate a decline in 2010 expenditure estimates of $108 million. Consequently, the state treasurer and budget director recommended that the reduction in state school aid payments scheduled to occur on December 20 be delayed until book-closing was more complete and updated expenditure and revenue data became available. As a result, proration of school aid payments is unnecessary at this time.
The governor's executive budget recommendation for the 2011 fiscal year will be presented to a joint meeting of the House and Senate appropriations committees on February 11.
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