LANSING ? Gov. Jennifer Granholm and the Legislature failed to deliver on their vow to complete the entire 2010-11 fiscal year budget by July 1, but they saved some face with a deal Wednesday on the K-12 School Aid portion of the budget, primed for final passage Thursday.

Two items were key to springing the compromise to approve the K-12 budget with an $11 per pupil increase, which would be retroactive for the entire 2009-10 fiscal year and continue for 2010-11. Senate Republicans backed off their insistence to resolve the $300 million current year deficit largely through the use of surplus School Aid Fund money in the general fund at the same time while House Democratic leaders pledged to take another shot at passing the controversial plan to encourage state employees to retire (SB 1226 ).

When a House-Senate conference committee on the K-12 budget (SB 1163 ) convened at 8 p.m., there was no drama, and the panel unanimously voted to approve the bill.

“Schools are supposed to have their budgets tomorrow,” said Sen. Ron Jelinek (R-Three Oaks), chair of the Senate Appropriations Committee and the conference committee. “We should have that for them. It’s just not fair to schools.”

Schools have fumed for years about how their fiscal years begin July 1, but their superintendents and boards of education struggle to adopt budgets because they don’t know until September – or in some cases October – how much state funding they will receive.

And that sentiment apparently weighed heavily – especially with lawmakers also getting additional pressure from the gubernatorial candidates and talk of constitutional amendments to dock future legislators’ pay for failing to complete the budget by July 1.

“Most of our members feel that we need to get this budget done for the schools,” Senate Majority Leader Mike Bishop (R-Rochester) said.

House Speaker Andy Dillon (D-Redford Twp.) said he would have liked to get funding for local governments done as well, as they start their fiscal years on July 1 just like school districts, but Mr. Bishop didn’t want to address both issues when Mr. Dillon brought the idea up. Indeed, the vow from lawmakers and Granholm was to complete the entire budget by July 1, not just school aid.

Dillon wouldn’t commit to getting the entire budget done before the August primary, noting lawmakers already blew through the first self-imposed deadline of June 30, but said lawmakers including him would like to see that happen.

“We’re committed to working through July,” he said of budget negotiations.

But Rep. George Cushingberry Jr. (D-Detroit), chair of the House Appropriations Committee, told Gongwer News Service it’s unlikely the 2010-11 fiscal year budget will get wrapped up until September 30.

He predicted nothing would happen until after the primary election as people settle out of campaign mode. But he also said waiting to get the budget done is a good thing because the state should have more positive revenue news to work off of in crafting the final product.

Jelinek said he hopes to complete the entire budget by the end of the August. Completing the 2010-11 budget by July 1 was on track until the May Revenue Estimating Conference revealed a $300 million deficit in the general fund. Current year deficits discovered in the late spring have brought work on the next fiscal year budget to a halt in the past, and this time was no exception.

“The general fund just fell through the floor,” he said. “We thought we were rock-solid for ’10. And then we weren’t.”

Dillon and most Democrats have taken a strong position against using the $236 million available in the School Aid Fund to help address the general fund deficit while Senate Republicans and Granholm have endorsed using those funds to help the general fund. Legislative Democrats are urging the securitization of tobacco settlement revenues to cover the shortfall, a move Senate Republicans are opposing.

House Democratic leadership’s willingness to try again on the state employee retirement legislation, which would save $98 million for the 2010-11 fiscal year, “did help loosen this up tonight,” Jelinek said.

Said Bishop: “We also got the House to commit to work with us on the state employee retirement, which I thought was dead, but I think is revived now. And I’m relying on the commitment of the House leadership to get that job done.”

THE K-12 BUDGET: The major highlight in the school aid budget is the $11 per pupil increase for schools in the 2009-10 fiscal year that carries into the 2010-11 fiscal year. That’s a $20 million increase in 2010-11 that officials said would meet the state’s obligations under requirements to receive federal funds.

In other notable moves, the budget would maintain existing funding of $20 million for declining enrollment grants as urged by Granholm and the House. The Senate had eliminated the funding. But the budget agrees with Granholm and the Senate to reject a $1.2 million increase the House had passed for adolescent health centers.

There also is a small increase of $2.6 million ($1.3 million restricted fund, $1.3 million general fund) for the Great Start School Readiness program, raising spending from the $95.975 million appropriated for the current year. The governor and Senate had made no change while the House had passed a $7.6 million increase.

And on one of the most contentious items, school bus inspection funding, the bill would spend $1.4 million for the current year and then $434,000 for the 2010-11 fiscal year. The 2010-11 plan mirrors what the Senate and Granholm had urged, specifically that school districts would handle the inspections with random audits conducted by the Department of State Police. The House had called for having the State Police continue its long-time role of conducting the inspections (a bill requiring the State Police to conduct random inspections passed a House committee Wednesday.

On intermediate school districts, the budget junked a proposed $8 million increase passed by the House in favor of maintaining current year funding as the governor and Senate had proposed.

And a House proposal to cut the Michigan Virtual School by $250,000 was rejected. However, House language appropriating $100,000 for a competitive grant to provide students with access to cultural, art, zoos or music resources was retained.

In total, the budget contains $12.847 billion ($30.2 million general fund). That’s a 0.2 percent increase from the current year (no change general fund).

This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com

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