SB0134: INITIAL APPROPRIATIONS (Date Completed: 10-1-19) - FY 2019-20 COMMUNITY COLLEGES BUDGET

FY 2019-20 COMMUNITY COLLEGES BUDGET S.B. 134 (P.A. 52 of 2019): INITIAL APPROPRIATIONS

			CHANGES FROM FY 2018-19 YEAR-TO-DATE
FULL-TIME EQUATED (FTE) CLASSIFIED POSITIONS/FUNDING SOURCE	FY 2018-19 YEAR-TO-DATE*	FY 2019-20 INITIAL APPROPS.	AMOUNT	PERCENT
FTE Positions..............................................................	0.0	0.0	N/A	N/A
GROSS..........................................................................	408,215,500	414,719,000	6,503,500	1.6
Less:
Interdepartmental Grants Received.........................	0	0	0	0.0
ADJUSTED GROSS....................................................	408,215,500	414,719,000	6,503,500	1.6
Less:
Federal Funds...........................................................	0	0	0	0.0
Local and Private.......................................................	0	0	0	0.0
TOTAL STATE SPENDING.........................................	408,215,500	414,719,000	6,503,500	1.6
Less:
Other State Restricted Funds..................................	408,215,500	414,719,000	6,503,500	1.6
GENERAL FUND/GENERAL PURPOSE...................	0	0	0	0.0
PAYMENTS TO LOCALS...........................................	408,215,500	414,719,000	6,503,500	1.6

*As of September 30, 2019.

	Gross	GF/GP
FY 2018-19 Year-to-Date Appropriation......................................................	$408,215,500	$0

Changes from FY 2018-19 Year-to-Date:
Items Included by the Senate and House
1. MPSERS Normal Cost Offset. The Governor moved the $6.4 million one-time FY19 item for this purpose to an ongoing appropriation and increased the amount by an additional $5.8 million GF/GP for a total normal cost offset of $12.2 million. This amount will support the additional costs associated with brining the assumed rate of return for MPSERS fund from 8% to 7.05%. The House and Senate concurred with this change, but funded the increased amount with School Aid Fund revenue rather than GF/GP.	5,781,000	0
2. MPSERS Unfunded Accrued Liability Stabilization Adjustment. The Governor reduced this item to reflect a reduction in the amount of the State's share of costs above the statutory cap. This reduction would bring total MPSERS UAAL payments to $74.8 million. The House and Senate concurred with this change.	(2,200,000)	0
3. Renaissance Zone Reimbursements. The Governor reduced these payments to reflect a reduced estimate for the amount necessary to reimburse community colleges for lost property tax revenue due to renaissance zones. The House and Senate concurred with this change.	(300,000)	0
Conference Agreement on Items of Difference
4. Community College Operations Increase. The Governor included a 3% increase in community college operations. The increase would be distributed through the existing performance funding formula developed by the 2016 Performance Indicators Review Task Force. The formula allocates the money as follows: 30% proportional to FY19 base appropriation, 30% weighted contact hours, 10% performance improvement, 10% performance completion number, 10% performance completion rate, 5% administrative costs, 5% local strategic value. The Senate retained the performance funding formula, but provided a 1.3% increase instead. The House added a new formula metric that provided additional funds to the six community college districts with the lowest taxable values, and provided a 1.0% increase through that formula. The Conference provided a 0.8% increase through the House's revised formula.	2,436,800	0
5. North American Indian Tuition Waiver Shortfall. The Senate and Conference provided additional funds to offset costs incurred by community colleges under Public Act 174 of 1976. The House did not include this item.	785,700	0

Total Changes...............................................................................................	$6,503,500	$0
FY 2019-20 Initial Ongoing/One-Time Gross Appropriation.........................	$414,719,000	$0

Boilerplate Changes from FY 2018-19 Year-to-Date:

Items Included by the Senate and House

1. Schedule of Payments to Community Colleges. The Governor removed language requiring the State Budget Director to notify the House and Senate Subcommittees before funds are withheld due to a failure to report certain information as required by statute. The House, Senate, and Conference retained this language. (Sec. 206)

2. Use and Finance Noncompliance Penalty. The Governor removed a section that imposes a 1% reduction in State funding to a community college for each violation of certain requirement of the Management and Budget Act. The House, Senate, and Conference retained this section. (Sec. 208)

3. Cost Containment. The Governor removed a section requiring community colleges to pursue various efficiencies in their operations. The House, Senate, and Conference retained this section. (Sec. 212)

4. Tuition and Fees Report. The Governor removed language requiring community colleges to include the annual cost of tuition and fees based on a full-time course load of 30 credits in their tuition and fees report. The House, Senate, and Conference retained this language. (Sec. 225)

5. Communications with Legislature. The Governor removed a section that prohibits disciplinary action against a community college employee for communicating with a member of the Legislature or legislative staff. The House, Senate, and Conference retained this section. (Sec. 228)

Conference Agreement on Items of Difference

6. Transparency Reporting - Noncompliance Penalty. The Governor removed language that allows the State Budget Director to withhold monthly payments to community colleges if the colleges do not comply with statutory transparency reporting requirements. The House, Senate and Conference retained this language. The House and Conference also added a requirement that each college provide a map of its district boundaries on its website. (Sec. 209)

7. Academic Program Partnerships. The Governor removed a section requiring the Michigan Community College Association, Michigan Independent Colleges and Universities, and the Michigan Association of State Universities to submit a report on academic partnership programs. The House, Senate, and Conference retained this section. The House and Conference additionally changed the frequency of the report from each year to every other year. (Sec. 210f)

8. Michigan Community College Data Inventory - Advisory Committee Selection. The Governor removed language requiring the MCCA members selected to serve on the MCCDI Advisory Committee to be from various community college classification groups. The Senate retained this language. The House and Conference modified the criteria to be a 'diverse mix of college sizes', and for the inventory to include metrics supporting the change in the funding formula under Sec. 230. (Sec. 217)

9. Prisoner Contact Hour Exclusion. The House and Conference repealed a section prohibiting colleges from including contact hours with prisoners in enrollment data used to determine State aid. (Sec. 218)

10. Purchase of Foreign Automobiles. The Governor, House, and Conference removed a prohibition on the purchase of foreign automobiles using State funds. The Senate retained this section. (Sec. 227)

11. Performance Funding Formula. The House and Conference included a new metric that allocates 5% of performance funding provided through the formula to the 6 community college districts with the lowest taxable property values. The formula weight assigned to the number of contact hours was decreased from 30% to 25% to facilitate this change. (Sec. 230)

12. Tuition Restraint. The Governor and House included a new section that would make the receipt of performance funding contingent upon keeping increases in tuition and fee rates for the 2019-20 academic year less than the greater of 3.2% or $128. The Senate and Conference did not include this new section. (Sec. 230a)

Date Completed: 10-1-19 Fiscal Analyst: Josh Sefton

This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.