Proposed K-12 School Aid budget for 2010-11

The Governor proposed the following for next year's school aid budget:

Remember – there will be significant changes before a School Aid Bill is enacted.

• The Governor’s budget assumes an increase in sales tax revenue (from expanding the base to include some services and reducing the rate from 6% to 5.5%). She estimates that this will increase School Aid Fund revenue by $554 million, negating the need for an additional $255 per pupil cut.

• The $165 per pupil cut from 2009-10 remains in place for 2010-11.

• ISD operational funding will still be 80% of 2008-09 levels. (The 20% cut remains through 2010-11).

• All of the remaining ARRA funds (184 million) will be used in 2010-11. This still leaves the School Aid Fund short by $165 per pupil (plus $255 per pupil with no tax increase or reallocation of revenue. The $255 reduction will change as new revenue figures arrive throughout the year).

• By 2011-12, for all of the following services:
1. Purchasing services
2. Payroll services
3. Financial accounting services
4. Facilities maintenance services
5. Pupil transportation services
6. Human resource services
7. Technology services
8. Food services

ISDs must calculate a per pupil cost as if the ISD provided the service in the most “cost-effective method”. If a district’s costs are less than the ISD’s calculations, all is fine. If a district’s costs are more than the ISD’s calculations, the district has to enter into an agreement with the ISD to provide the service or forfeit 1% of their foundation allowance.

• There is no change in the foundation allowance.

• Instead of 30 snow hours, here is the new language – “the first 6 days or equivalent hours for which pupil instruct is not provided because of conditions not within the control of school authorities….shall be counted as hours and days of pupils instruction.”

• The MPSERS rate is 19.41%, ALTHOUGH – the act includes this language, “ the contribution rate for 2010-11 may be reduced… if reforms in the public school employees retirement system are enacted by the end of calendar year 2010.”