Action Center

2023-2024 School Aid Fund Budget
Action Alert

June 29, 2023

The House and Senate came to an agreement on the School Aid Budget late on Thursday. Senate Bill 173 was passed by the Senate by a vote of 29-8 and the House by a vote of 58-50. It will now go to the Governor for her consideration and approval.  The bill includes the budgets for School Aid Fund, community colleges and universities.  It also includes some funds for this year.  

It increases the per-pupil foundation by 5% and include free meals for all students, funding for pupil transportation and increases to at-risk funding, English language learners, special education and ISDs. 

Also of note, the Michigan Department of Education includes continued funding for school board training reimbursement at $150,000.

The following breaks down pertinent sections of the School Aid budget:


Secs. 11x and 12c – Consolidation and infrastructure fund

Appropriates $245 million, specifies that consolidation of services is an eligible expense, removes requirement that less than 50% of funds be spent on non-consolidation projects and requires the completion of the infrastructure study before funding is awarded.

Sec. 20 – Per-pupil foundation allowance

Increases the target foundation allowance by $458 per pupil for an allowance of $9,608, a 5% increase. It maintains the cyber school allowance at $9,150 per pupil, the current target foundation allowance.

Sec 21f – Online courses

Adds a new subsection to allow for a district to provide up to 15 days in a school year of virtual learning due to emergency closures if the board has an approved plan.

Secs. 21h and 22p – Partnership districts

Increases funding by $36 million over three years starting in 2023-2024. Requires access to education fiscal and policy issue training for district leadership, including school board members, and increases outcome goals to include improved graduation rates and measuring school attendance.

Sec. 22d – Rural and isolated districts

Increases funding by $2.3 million and adds $500,000 for an island district reachable by a bridge.

Sec. 22k and 22l – School transportation fund – NEW

Creates fund with $350 million and appropriates $125 million through Sec 22l to offset district transportation costs. The funding will be distributed to districts based on the riders per square mile.

Sec 23g – MI kids back on track

Includes $150 million for fiscal year 2022-2023 for Mi Kids Back on Track program for districts and ISDs to respond to unfinished learning. Payments will be made based on number of pupils not proficient in math or reading.

Secs. 27a and 27c – MI Future Education Fellowships and Student Teaching Stipends

Maintains $25 million to offset tuition costs for students earning their initial teaching certificate and $50 million for grants for student teachers to use for living expenses while student teaching.

Sec. 27h – Mentoring grants – NEW

Includes $50 million for grants to districts to create mentor programs to support and retain teachers, counselors and administrators over 5 years. The grants would be for stipends for mentors, materials needed and to cover out-of-class time for the mentor teacher. Districts can be reimbursed up to $3,000 to provide mentoring for school administrators through a contract with a state professional organization.

Sec 27k – Student Loan Repayment - NEW

Creates a new section with $225 million to provide payments up to $200 per month for teachers in an income driven repayment plan for their student loans. Teachers in ISDs or districts where at least 85% of pupils are economically disadvantaged could receive up to $400 per month.

Sec 27l – Salary incentive program – NEW

Allocates $63.8 million for equal per-pupil payments to districts with the intent that the funds be used to increase educator compensation.

Sec. 29 – Enrollment Stabilization Fund

Establishes the fund with $314 million and appropriates $71 million for districts experiencing declining enrollment. The payments will be made based on the difference between a 2 year average pupil count blend and the 2023-2024 pupil count multiplied by the target foundation amount.

Secs. 30d, 30e and 31k – Universal breakfast and lunch programs – NEW

Includes $160 million to reimburse schools for the cost of providing free breakfast and lunch to all students and establishes the School Meals Reserve Fund. To receive the funding, a district would have to forgive all student lunch debt. Sec. 31k includes $2.5 million for fiscal year 2022-2023 to help schools retire that debt. Districts would still have to make efforts to have families fill out relevant family income information and are encouraged to provide special meals to meet dietary restrictions such as those catering to medical needs, allergies or vegetarian diets.

Sec. 31a – At-risk funding

Increases funding by $204.5 million to fund payments at 11.5% of foundation allowance, but also creates a scale, giving districts with the higher concentrations of poverty a reimbursement up to 15.3%. The scale sets the goal of funding districts between 35 and 47% based on opportunity index score.

Sec. 31n – School mental health and support services

Increases funding by $28.9 million to $106.5 million for licensed behavioral health providers in schools. It also continues having those providers qualify for federal Medicaid match funding and adds language that if money is left unspent it can be reappropriated to another ISD.

Sec. 31aa –Mental health grants

Increases funding to $310 million for per-pupil payments to districts over two years for activities to improve the mental health of students and staff, including hiring school psychologists, social workers, counselors and nurses, purchasing and implementing screening tools and more. The funding would be disbursed on a per-pupil basis to districts. Also adds school safety as allowable expenses (repealing Sec 97) and requires that 50% of the funds must be spent on mental health.

Sec. 31ff – SMART grants

Allocates $15 million for the SMART grants established by law last year. These grants are for internships for students in graduate level mental health professional programs working toward a school certification.

Secs. 32d and 39 – Great Start Readiness Program 

Increases funding by 5% to match the increase to the per-pupil foundation grant and maintains the full-day rate at the same amount of $9,608. The part-day rate is set at $4,804. Expands eligibility to enroll from 250% to 300% of the federal poverty guidelines. It also includes $50 million for fiscal year 2022-2023 for start-up grants and grants up to $75,000 for individual programs to expand to 5 days.

Sec. 32p – ISD early childhood programs

Increases funding by $6 million to $19.4 million for ISD early childhood programs for children from birth through age 8. The funding is to both support the programs and increase the number of eligible children who are enrolled; $3.5 million must be used for providing home visits to at-risk children and their families and $4 million must be used to improve literacy for children ages birth to age 5.

Sec. 35j – Literacy improvements – NEW

Appropriates $140 million to improve literacy instructional practices in local districts and ISDs. The grant money would be available to increase professional development, do a needs assessment for staff and develop a comprehensive literacy system, among other things.

Sec. 41 – English Language Learners 

Increases funding by $13.3 million to increase the per-pupil funding per WIDA score category to $1,476, $1,019 and $167. Adds intent language that funding be increased each year until the levels are funded at 75%, 50%, and 35%.

Sec. 51e – Special education funding 

Increases funding to 100% of the target foundation allowance. Current year was set at 75%.

Sec. 61c – CTE equipment 

Increases funding for eligible career education planning districts by $7.5 million to update career and technical education equipment.

Sec. 67f – FAFSA incentives – NEW

Includes $10 million for the Free Application for Federal Student Aid completion challenge. Eligible districts would receive $50 for each 12th grade student who submits the FAFSA by May 1, 2024. If funding remains, a second round would be available for those that submit the FAFSA by June 30, 2024.

Sec. 74b – Michigan Clean School Bus grant program – NEW

Establishes the grant program with $125 million for districts to convert or replace current school buses with low to no greenhouse gas emission buses. The grants would be allocated by the Department of Environment, Great Lakes and Energy. The grants could also be used for alternative fuel vehicles.

Sec. 81 – ISD funding 

Increases funding by $3.8 million for a 5% increase over last year. Removes the requirement to include public school academies in all sponsored activities or meetings or lose funding.

Sec. 97 – School safety grants

Section is repealed and moved to Sec 31aa.

Sec. 147a – MPSERS offset 

Maintains current year appropriation for payroll costs and increases the reimbursement for normal costs. Also funds an offset for ISDs and district libraries at $11.9 million over 2 years.

Sec. 147c – MPSERS rate cap 

Increases the average rate cap per-pupil amount by $115 to $1,157 and sets the rate cap per pupil for districts to a range of $4-$5,020. Also allocates $202 million to change the payroll growth assumption to 0.75%.

Sec 147f – MPSERS one-time reimbursement

Appropriates $48.5 million to reimburse districts and ISDs for contributions to MPSERS based on the proportion of total covered payroll from the 2022-2023 fiscal year.

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