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Michigan schools in line for ‘historic’ spending increase under new budget

Michigan House leaders passed a $70 billion spending plan, enlarged by federal stimulus payments, that would close a longstanding funding gap at state schools.

LANSING — The Michigan House on Thursday approved a nearly $70 billion plan to fund state government, boost K-12 schools, close a decades-long funding gap between districts and send them a collective $4.4 billion in one-time COVID-19 relief funds. 

The series of current-year and fiscal year 2022 budget bills were negotiated with Democratic Gov. Gretchen Whitmer and approved late Thursday in bipartisan votes. 

Under the plan, every district in the state would receive a baseline of $8,700 in funding per student next year, up from $8,111 to $8,529 this year — as well as at least $1,093 per student in one-time pandemic funding from the federal stimulus. Districts with more at-risk students will continue to receive additional funding.

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“We are spending more than $16 billion to educate our kids, help them catch up from the past year struggles and get back on track to a brighter future,” state Rep. Mary Whiteford, R-Casco Township, said in a floor speech.  

“The best part of this school plan is that nearly every child that was impacted by learning loss this past year… will be getting our support to help them catch up.”

But with a self-imposed July 1 deadline approaching, Senate Republicans have not yet signed off on the full plan. 

Talks are expected to continue over the weekend with hopes of finalizing a deal by Wednesday, when the Senate meets for the final time before a scheduled summer recess. 

Still, Thursday’s House approval was a major milestone for progress between Whitmer and legislative Republicans, who for months had feuded over pandemic policy. House GOP leaders had temporarily refused to negotiate the massive influx of federal funds sent to the state.

The Michigan Constitution does not require lawmakers to balance the state budget until Oct. 1, but doing so by next week would provide funding certainty for schools and local governments working to finalize their own budgets this summer.

Michigan is flush with federal funds and its own $2 billion surplus, but the appropriations process has been complicated by a dispute over whether and how to provide "equity" payments to school districts that are poised to receive fewer stimulus dollars than their peers under a federal funding formula that is based on poverty rates and other factors. 

That has "slowed the discussions" down in recent weeks, Senate Appropriations Chairman Jim Stamas, R-Midland, acknowledged Thursday morning. The Senate did not include school equity payments in the $4.4 billion stimulus spending bill it advanced earlier this month, but Stamas said he's “always been supportive” of the concept, hinting at room for compromise. 

The $16.7 billion education budget approved by the House on Thursday includes a $421 million increase in classroom funding for Michigan schools and another $262 million in targeted payments to ensure all districts are equally funded, closing a gap that has existed since Proposal A of 1994 revamped the state’s approach to school funding.

"This is historic," said state Rep. Regina Weiss, D-Oak Park, on Thursday. "This has been 25 years in the making, and we're doing it tonight. We're finally closing the funding gap and making sure that every student in our state receives an equal amount of funding."

The plan is funded in part by $4.4 billion in federal COVID funds and another $362 million in equity payments added by the House. The plan calls for districts to spend 20 percent of their federal stimulus funds on programs to address learning losses associated with virtual instruction, including summer school and other remediation services.

The 2022 budget would also increase state-funded preschool through the Great Start Readiness Program to $8,700 per pupil, up from $7,250 this year. And it would provide capacity for another 22,000 Michigan students to enroll, which was a top goal for Whitmer.

The budget includes $48 billion to fund state departments and local governments, which are in line for a 2 percent increase in statutory revenue sharing payments. It does not yet include funding for universities or community colleges, which will be negotiated at a later date.

The plan would also continue through next year a $2 per hour wage increase for direct care workers who toiled on the front lines of the pandemic, as proposed by the first-term governor. 

The plan does not allocate all available federal funds, and the Senate has not yet agreed to the details, but the House vote was "a step in the right direction as we continue Michigan's economic jumpstart," Whitmer said in a statement. 

"This framework is a strong start and proposes historic investments in public education, bumps up pay for direct care workers, and puts more people on tuition-free paths to higher education and skills training."

The $4.4 billion in federal funding for schools is now headed to Whitmer’s desk for signature, but the larger 2022 budget bills are headed back to the Senate for consideration.

Stamas said earlier Wednesday he still hopes to finalize the budget by July 1. Other lawmakers appeared more skeptical about the prospects of meeting that deadline, which the Legislature wrote into state law but could change or simply miss without consequence.

Sen. Wayne Schmidt, R-Traverse City, told Bridge Michigan he thinks the upper chamber may approve 2022 funding levels for schools and cities next week but not complete the full state government budget until later in the year. 

"We're probably need a bit more time," Schmidt said. "There is a lot of money out there, and we need to do this the right way."

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