LANSING – The K-16 school funding proposal on the Michigan November ballot, Proposal 2006-5, could actually cost the state more than $700 million in initial funding, according to a document prepared by the Senate Fiscal Agency.

An earlier analysis, issued in July, by the SFA estimated that the critical first year cost of the proposal, if approved by the voters and not rejected by a two-thirds majority of the Legislature, would total $566.6 million.

But in a pamphlet overview of the issue, released late last month, the SFA noted another element of school funding that could bump the first year cost of the proposal up by more than another 20 percent.

The proposal is an initiated act that would require the Legislature to annually increase funding for public schools by the rate of inflation, and would also require the state to pick up all retirement and retiree health care costs that exceed 14.87 percent of a school district, community college or university’s payroll.

The provision also requires the state to increase current year spending to reflect what would have been inflationary increases since the 2004-05 fiscal year, a provision that has state policymakers in a lather should the proposal pass.

The language of the ballot issue says that if passed it would require an increase of $565 million in state education funding ($1.6 million short of the July SFA analysis).

That figure estimated $506.3 million in K-12 additional funding, $33.4 million for additional community college funding, and $26.9 million in higher education funding.

But in the September document prepared by the SFA, the fiscal agency said the total paid the first year could be even larger if categorical programs were also financed at the inflationary increases.

“The increase in gross baseline funding for K-12 required by the initiative, combined with the existing dollars available in ‘discretionary or ‘nonrequired’ categoricals appropriated in the K-12 budget would provide sufficient funding to pay for the specific funding ‘guarantees’ …provided that (SFA emphasis) some of the existing School Aid discretionary categoricals were reduced from their FY 2006-07 level and new items in the budget were not funded,” the analysis said.

But if the “initiative’s costs were simply added on top of (SFA emphasis) the FY 2006-07 enacted School Aid budget, then the costs of funding all of the currently-enacted programs plus the K-16 requirements would be $141.7 million more.”

A spokesperson for the K-16 coalition could not be reached for comment.

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