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COOR ISD Professional Learning Day

Grayling HS

Nov 1, 2024

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Agenda

  • Intros

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Agenda

  • State Revenues
  • SAF Budget
  • MSBO Update

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SAF Budget FY2024-25

THANK YOU!

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State Revenues

JAN 2024

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State Revenues

MAY 2024

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State Revenues

MAY 2024

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SAF Budget FY2023-24

Source: Saginaw ISD budget analysis

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SAF Budget FY2023-24

Source: House Fiscal Agency, Jan 2024

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SAF Budget FY2023-24

Source: House Fiscal Agency, Jan 2024

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SAF Budget FY2023-24

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SAF Budget FY2023-24

Down from 64% pre-pandemic in FY2019

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SAF Budget FY2023-24

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SAF Budget FY2023-24

SCHOOL AID FUND RECEIVES THE MAJORITY OF SALES TAX REVENUE

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District Fund Balance

Source: House Fiscal Agency, Jan 2024

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Federal Funds Timeline

Source: MDE, Sept 2024

ARP draws to a close – have your ducks in a row!

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Federal Funds Timeline

Source: MDE, Sept 2024

ARP draws to a close – have your ducks in a row!

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Federal Funds Timeline

Source: MDE, Sept 2024

ARP draws to a close – have your ducks in a row!

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SAF Budget FY2024-25

  • 3 big issues in the June 2024 budget deal

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    • Foundation Allowance
    • MPSERS rates and Sec. 147 funding
    • Sec. 31aa – School Safety and Mental Health

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SAF Budget FY2024-25

Ranged from 2.25% - 3.1% increase (Recall 5% each of the past two years)

MAIN ISSUE #1

FOUNDATION ALLOWANCE

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SAF Budget FY2024-25

Ranged from 2.25% - 3.1% increase (Recall 5% each of the past two years)

RESULT: $0 increase - $9,608 for FY2024-25

PSA’s get one-time increase of 3.9% through Sec. 22e – est. $9,983 for FY2024-25

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SAF Budget FY2024-25

Ranged from 2.25% - 3.1% increase (Recall 5% each of the past two years)

Source:

Michigan Executive Office of the Governor, email release July 1, 2024

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SAF Budget FY2024-25

  • Source: Oakland Schools analysis, June 2024

THIS SWITCH FROM THE STATE HAS A WIDE RANGE OF IMPACTS DEPENDING ON YOUR DISTRICT’S DEMOGRAPHICS, BUDGET PRIORITIES, PAY LEVELS, ETC…

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NOT A 4.2% ACROSS THE BOARD INCREASE!

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SAF Budget FY2024-25

  • Source: Oakland Schools analysis, June 2024

THIS SWITCH FROM THE STATE HAS A WIDE RANGE OF IMPACTS DEPENDING ON YOUR DISTRICT’S DEMOGRAPHICS, BUDGET PRIORITIES, PAY LEVELS, ETC…

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NOT A 4.2% ACROSS THE BOARD INCREASE!

RECOMMENDATIONS:

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  • Understand your district’s budget assumptions & quantify the difference

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  • Gauge impact on any CBA formulas

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  • Update multi-year projections

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SAF Budget FY2024-25

  • MAIN ISSUE #2: MPSERS funds

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  • MPSERS has different “buckets” of liabilities…
  • OPEB is > 100% funded once the next valuation comes out
  • This budget resource for FY2024-25 requires a statutory change…
  • BUT….
  • It sounds like the State will have a question to deal with in either FY2024-25 or FY2025-26

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SAF Budget FY2024-25

  • Section 147 highlights and lowlights of the FY2024-25 budget deal…
  • Rate changes for assumed statutory change – decrease in UAAL state-subsidized portion of rate – NO NET DISTRICT COST SAVINGS HERE.
  • Sec. 147a1 – stays at $100 million
  • Sec. 147a2 - increases allocation from $359.95mm to $365.1mm
  • Sec. 147a3 - no change – continues $12mm for ISD’s.
  • Sec. 147a4 – NEW - $598 million to offset 5.75% of payroll cost
  • Sec. 147c(1) – reduced significantly. From $1.647 billion for FY2023-24 to $955 million for FY2024-25.
  • CONTINUED…

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SAF Budget FY2024-25

  • Section 147 highlights and lowlights of the FY2024-25 budget deal…
  • CONTINUED…
  • Sec. 147c(2) – ADDED - $250 million – state-subsidized portion…the budget bill calls this an “asset” to the state rather than UAAL…more to come!
  • Sec. 147e – increased from $90.4 to $104.7 million for FY2024-25
  • Sec. 147f – eliminated – NET LOSS FOR DISTRICTS
  • Sec. 147g – MPSERS Employee Healthcare Reimbursement - $182 million for the districts to reimburse the 3% deduction
    • Sounds like more work for district admin & business offices
    • The 3% - gift that keeps on giving!

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SAF Budget FY2024�-25

  • MPSERS change
  • 16.89% in FY2023-24

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SAF Budget FY2024-25

  • MAIN ISSUE #2: MPSERS funds
  • So where do we stand as of Nov 1, 2024?
  • HB 5803 passed last month – will go into effect Oct 1, 2025
  • Sec. 147g 3% employee reimbursement will go into effect…but when?
  • Sorting out what rates to use and when…Oct 1 is past!
  • $598 million pumped in was larger than any of the 3 budget proposals…did it come at cost of Foundation Allowance increase?
  • Didn’t get the net district cost reduction hoped for…Executive budget proposal approach won out

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SAF Budget FY2024-25

  • MAIN ISSUE #2: MPSERS funds
  • So where do we stand as of Oct 3, 2024?
  • HB 5803 passed last week – will go into effect Oct 1, 2025
  • Sec. 147g 3% employee reimbursement will go into effect…but when?
  • Sorting out what rates to use and when…Oct 1 is past!
  • $598 million pumped in was larger than any of the 3 budget proposals…did it come at cost of Foundation Allowance increase?
  • Didn’t get the net district cost reduction hoped for…Executive budget proposal approach won out

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  • New rates published Oct 7, 2024, effective Oct 3, 2024
  • Stabilization rate goes to 10.58% to match Sec. 147c appropriation
  • More permanent changes go into effect Oct 1, 2025
  • Sec. 147g & 3% reimbursement will still happen in FY2024-25

Updates… hot off the press!

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SAF Budget FY2024-25

  • MAIN ISSUE #2: MPSERS funds
  • So where do we stand as of Sept 30, 2024?
  • HB 5803 passed last week – will go into effect Oct 1, 2025
  • Sec. 147g 3% employee reimbursement will go into effect…but when?
  • Sorting out what rates to use and when…Oct 1 is tomorrow!
  • $598 million pumped in was larger than any of the 3 budget proposals…did it come at cost of Foundation Allowance increase?
  • Didn’t get the net district cost reduction hoped for…Executive budget proposal approach won out

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RECOMMENDATIONS:

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  • Understand your district’s payroll numbers & quantify 3%, 5.75%, etc

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  • Conversations on 3% reimbursement & urge patience

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  • Project impact on MOE & other key formulas

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SAF Budget FY2024-25

  • MAIN ISSUE #3: Sec. 31aa Mental Health & School Safety Funding
  • Feb – Gov: Sec. 31aa School mental health and safety - per pupil grants for the 2024-25 fiscal year include a decrease in from $310 to $300 million SAF, with a future reduction planned to $150 million.
  • Apr – House: $300 million, keeps 50% mental health requirement
  • Apr – Senate: $50 million ongoing, $150 million for FY2024-25 only
  • June – drastically cut to $25 million in Conference Committee

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SAF Budget FY2024-25

  • MAIN ISSUE #3: Sec. 31aa Mental Health & School Safety Funding

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Because the FY2023-24

Sec. 31aa funds were

technically one-time only,

the State is not considering

this a cut…

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Once factored in, the

FY2024-25 district impacts

look a lot different

Source: MEA/MSBO SAF budget analysis, July 2024

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SAF Budget FY2024-25

  • Prior to

supplemental

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SAF Budget FY2024-25

  • Prior to

supplemental

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SAF Budget FY2024-25

  • MAIN ISSUE #3: Sec. 31aa Mental Health & School Safety Funding
  • Sept 2024 – supplemental appropriation to restore $125 million
  • No immediate effect – probably impacts March 31, 2025-forward
  • As of now – application is in GEMS/MARS and due 11/1/2024

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SAF Budget FY2024-25

  • Not the only changes in FY2024-25 – some other highlights:

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  • GSRP – continued increased investment. $85 million plus some other categorical funds…
    • Moves to 400% of FPL. Can enroll all 4-year-olds once documented that waiting list is clear. All 4-year-olds prioritized before 3-year-olds regardless of FPL. Every ISD needs prioritized enrollment standards. Aug 15 deadline for enrollment for over-income families (can be sooner).

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SAF Budget FY2024-25

  • Not the only changes in FY2024-25 – some other highlights:

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  • Sec. 31a At Risk – continued increased investment. Over $1 billion for FY2024-25
    • Continued opportunity index bands
    • New flexibility provisions to reduce teacher/pupil ratio and support retention and recruitment efforts

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SAF Budget FY2024-25

  • Not the only changes in FY2024-25 – some other highlights:

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  • Sec. 30d Michigan School Meals – continued increased investment. Total of $200 million for FY2024-25 (SAF + Reserve $)
    • Meal counts and participation rates in FY2023-24 were predictably very high around the state

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SAF Budget FY2024-25

  • Not the only changes in FY2024-25 – some other highlights:

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SAF Budget FY2024-25

  • Not the only changes in FY2024-25 – some other highlights:

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  • Continued flat investment for FY2024-25 in the following key areas…
    • Sec. 27a MI Future Educator Fellowship
    • Sec. 27c MI Future Educator Student Teacher Stipend Program
    • Sec. 29 Enrollment Stabilization
    • Sec. 81 ISD operations
    • …and many others

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SAF Budget FY2024-25

  • Not the only changes in FY2024-25 – some other highlights:

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  • As expected, removal of many one-time sources from FY2023-24 budget.
    • With over $2.3 billion in FY2023-24 – this was inevitable.
    • See p.32 of this document for more detail
    • https://www.msbo.org/wp-content/uploads/2024/06/24h5507h1cr1_education_omnibus_conference_report_summary.pdf

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SAF Budget FY2024-25

  • Not the only changes in FY2024-25 – some other highlights:

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  • Resources available:

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  • MSBO State Aid webpage
    • https://www.msbo.org/school-finance/funding/state-school-aid/
  • MASB Views from the Capitol (July 1, 2024)

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MSBO Update

  • Leadership Transition!

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MSBO Update

  • Updated/renewed focus for FY2024-25
    • Regional Groups
    • Practical Professional Development
    • Supporting Other Functional Areas
      • Other Business Office Roles - Payroll, Human Resources
      • Operations & Support - Facilities, Transportation and Food Service

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MSBO Update

  • Updated/renewed focus for FY2024-25
    • Operations & Support - Facilities, Transportation and Food Service

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MSBO Update

  • FY2024-25 events are live!
    • https://www.msbo.org/msbo-schedule-of-events-24-25/

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MSBO Business Manager Academy

FY2024-25 cohort underway

In-person + virtual options

Topics for discussion include:

  • Budgeting
  • Cash flow and borrowing
  • Working & Negotiating with unions
  • Human resources
  • Facilities, Food Service, Transportation
  • Technology
  • Curriculum
  • Bond issues

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MSBO Leadership Institute

2025 Application Window Opens in Fall 2024

Single Annual Cohort

LINK

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MSBO Awards

January 31 – Annual deadline for nominations

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35% INCREASE IN DISTRICT REBATES PAID ON 2022 SPEND

BUS PURCHASE PROGRAM

MISEC UTILITY CO-OP

MILAF+ DEPOSITS AND RETURNS ARE INCREASING

MSBO Update

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�Reach out with Q’s

Robert Dwan

MSBO Executive Director

rdwan@msbo.org

(517)327-2586

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Jason Helsen

MSBO Associate Executive Director

jhelsen@msbo.org

(517)376-3087

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Tim Peraino

MSBO Associate Executive Director

tperaino@msbo.org

(517)327-2582