The
Senate Appropriations Committee took action on a package of bills this week
that proponents say will provide earlier indication to the State and others of
a school districts financial distress and thereby discourage falling into
emergency management. The panel moved Senate Bills 951,
952,
953,
and 954
to the floor with the Democrats present at the hearing all opposing the
measures.
SB
951 would allow the Department of Education to withhold all or part of the
payment due to a district or intermediate school district (ISD) to the extent
the withholdings were part of a plan developed and implemented by current law,
which allows for districts with deficits of $100 or more per pupil to borrow
money with state approval. The bill also allows the Department to withhold up
to 10 percent of total state school aid if a district or ISD does not meet
requirements to submit an annual budget complying with current law and make
information on various expenditures available on its website.
SB
952 would impose several requirements on a school district, ISD or public
school academy with an existing deficit fund balance, including immediately
reporting the deficit to the State Superintendent of Public Instruction and the
State Treasurer, as well as submitting an amended budget for the current school
fiscal year and a deficit elimination plan within a certain period of time. The
State Superintendent would establish the period within which a deficit would
have to be eliminated and set special conditions to be met.
SB
953 would allow the State Treasurer to declare a financial emergency exists
and recommend that the Governor appoint an emergency manager in a situation in
which a school district was subject to an enhanced deficit elimination plan and
failed to submit the plan or comply with its requirements.
SB
954 would allow the State to withhold funds for failure to submit deficit
elimination plans or enhanced deficit elimination plans, as well as require the
Departments of Education and Treasury to jointly consult with the chief
administrative officer of a district or ISD required to submit a deficit
elimination plan. This bill would remove language requiring a quarterly deficit
district report to the Legislature and language prescribing the existing
process for submitting deficit elimination plans.
The Committee did not act on Senate
Bill 957, clearly the most controversial of the package in its current
form. The substitute proposed to the Committee would have required school
districts to submit budgetary assumption reports to
the Center for Educational Performance and Information (CEPI) and would require
the report to include at least expenditures per pupil for the prior year, the
assumed foundation allowance, projected pupil membership, and projected
expenditures per pupil. CEPI then must send a final assumption summary report
to each intermediate school district and authorizing body that reflects any
changes reported to it in budgetary assumptions, as well as transmit that
report to the superintendent of public instruction and state treasurer.
Senate Appropriations Committee
Chairman Roger Kahn (R-Saginaw) noted that the quantity of concern relative to
SB 975 warranted delaying action until the Legislature’s return to session in
early December.