October 12, 2010
Action taken to prevent forfeiture of $316M in federal funds
LANSING - Governor Jennifer M. Granholm has signed the remaining legislation required to implement the fiscal year 2011 budget including the appropriation for the state's 15 public universities and two supplemental spending bills for the state's K-12 schools. The governor used her veto authority to prevent the potential loss of more than $316 million in federal funding, due to a violation of federal law.
Highlights of the fiscal year 2011 appropriations bills signed include:
School Aid Supplementals
House Bill 5872 appropriates $316.3 million, Michigan's share of the Education Jobs Act recently passed by Congress. The governor signed the bill but disapproved of subsection (2) which allocates a significant portion of the funding.
As outlined in the federal act, Michigan applied for the funding in early September. The application required states to choose either the federal Title 1 formula or the state's primary funding formula as the method for distribution of the funds. Michigan's application selected the state's primary funding formula. However, HB 5872 allocates only $65.8 million through the primary formula and creates a new one-time allocation with the remaining $246 million for districts in order to restore the reduction in per pupil funding enacted in the current fiscal year. The United States Department of Education, in a letter to the governor, has indicated that this distribution is not allowable under the federal act and could subject Michigan to forfeiture of the funds.
The governor encouraged the legislature to move quickly to correct the legislation to ensure that schools receive this funding.
"While I have disapproved of Subsection (2) of Enrolled House Bill 5872, I look forward to working with the legislature on enactment of a new appropriation for Michigan schools that allocates funds using Michigan's primary funding formula," Granholm wrote in her veto message. "If we work together, we can assure that all schools receive their fair share of this federal assistance."
The governor also signed House Bill 4860 that reduces overall spending from the School Aid Fund for fiscal year 2011 by $45.9 million, largely due to anticipated savings from the refinancing of School Loan Fund bonds. This Supplemental increases funding for the state's libraries by $1.5 million.
Higher Education
The fiscal year 2011 appropriation for the state's 15 public universities and student financial aid is $1.6 billion, a decrease of 2.1 percent from the current fiscal year. Funding for operations at each school is decreased by 2.8 percent.
"Ensuring that every person in Michigan has access to quality education and training is essential for our economic success," Granholm said. "I am disappointed that legislative leaders chose to cut funding for our universities for next year. I am hopeful that the next legislature will be more committed to protecting this critical funding, including restoration of the Michigan Promise."
Finally, the governor signed two additional bills needed to implement pieces of the fiscal year 2011 budget agreement. House Bill 5599, sponsored by Representative George Cushingberry (D-Detroit) modifies the way emergency 9-1-1 fees are distributed and House Bill 6461, sponsored by Representative Bert Johnson (D-Detroit), transfers hotel tax revenue to the general fund.
Since September 23, the governor has signed FY11 appropriations for community colleges, the judiciary and the Departments of Agriculture, Education, State Police, Community Health, Corrections, Energy, Labor & Economic Growth, Human Services, Transportation, Natural Resources & the Environment and Military and Veterans Affairs. The governor has also signed the general government budget which provides appropriations for eight state and legislative agencies and seven bills which implement additional components of the FY11 budget agreement.
To view the letter to the governor from the U.S. Department of Education, please see below.
# # #
