Michigan State Board of Education for March 12, 2019 – Morning Session


>>GOOD MORNING, EVERYONE. [ INDISTINCT CHATTER ] THE TIME IS NOW 9:33 AM, AND A QUORUM OF THE BOARD IS PRESENT. THE STATE BOARD OF EDUCATION MEETING OF MARCH 12, 2019 IS CALLED TO ORDER. THE FIRST ITEM ON THE AGENDA IS THE APPROVAL OF THE AGENDA AND THE ORDER OF PRIORITY. ARE THERE ANY ITEMS THAT BOARD MEMBERS WOULD LIKE TO ADD OR DELETE FROM THE AGENDA?>>I WOULD LIKE TO ADD ONE ITEM TO THE AGENDA UNDER THE LEGISLATIVE COMMITTEE’S PORTION, AND THAT IS AN UPDATE ON THE A-F LEGISLATION, AS WELL AS A FORMAL REQUEST TO THE LEGISLATURE TO EXTEND THE DEADLINE.>>WHAT?>>IS THAT THE L2?>>I THINK THAT’S ALREADY– YOU’RE ALREADY ON OUR AGENDA. IT–>>THE L2?>>YEAH, THAT WOULD BE…>>IF WE’RE GOING TO HAVE A VOTE, WE SHOULD ADD IT.>>BUT WE’RE GOING TO VOTE ON IT, SO IT SHOULD BE ON THIS AGENDA.>>CORRECT, YEAH. SO THAT WOULD BE L2.>>OKAY, SO WE HAVE A MOTION, AND I BELIEVE WE HAD A SUPPORT. DISCUSSION? SEEING NO DISCUSSION, ALL IN FAVOR SIGNIFY BY SAYING AYE.>>AYE.>>OPPOSED, NAY. OKAY, THE MOTION CARRIES. THANK YOU VERY MUCH. SO NOW WE WILL VOTE ON THE APPROVAL OF THE AGENDA AS AMENDED. MAY I PLEASE HAVE A MOTION?>>SO MOVED.>>AND SUPPORT?>>SECOND.>>ALL RIGHT, IT HAS BEEN MOVED AND SUPPORTED. ANY DISCUSSION ON THE AGENDA? SEEING NONE, ALL IN FAVOR SIGNIFY BY SAYING AYE.>>AYE.>>OPPOSED, NAY. AND MOTION CARRIES. THANK YOU VERY MUCH. AT THIS TIME, MARILYN, WILL YOU PLEASE INTRODUCE MEMBERS OF THE STATE BOARD OF EDUCATION.>>I WILL. GOOD MORNING. YOU’VE JUST BEEN LISTENING TO THE CHAIRPERSON OF THE BOARD, SHEILA ALLES. SHE IS ALSO THE INTERIM STATE SUPERINTENDENT. AS WE GO AROUND THE TABLE, CASANDRA ULBRICH IS THE PRESIDENT OF THE BOARD. SHE RESIDES IN ROCHESTER HILLS. PAMELA PUGH IS THE BOARD’S VICE PRESIDENT. SHE IS ON HER WAY HERE FROM SAGINAW. THE BOARD’S SECRETARY IS MICHELLE FECTEAU. SHE’S FROM DETROIT. NIKKI SNYDER IS FROM CHELSEA. SHE’S ALSO A BOARD MEMBER.>>BAXTER.>>SORRY. SHE DID LIVE IN CHELSEA. THANKS FOR THE HELP. HELP ME OUT IF I MESS THIS UP. AND TIFFANY TILLEY IS ALSO A BOARD MEMBER. SHE’S THE BOARD’S NASBE DELEGATE. THAT’S THEIR ASSOCIATION. SHE RESIDES IN SOUTHFIELD. NEXT TO TIFFANY IS LAURA CHANG. SHE’S THIS YEAR’S MICHIGAN TEACHER OF THE YEAR WHEN SHE’S NOT HERE WITH US, SHE’S TEACHING AT VICKSBURG SCHOOLS. ACROSS THE TABLE IS JOSH NEYHART. HE REPRESENTS GOVERNOR WHITMER AT THE BOARD TABLE. AND JUDY PRITCHETT, BOARD MEMBER, AND SHE’S FROM WASHINGTON TOWNSHIP. LUPE RAMOS-MONTIGNY, BOARD MEMBER FROM GRAND RAPIDS. NEXT TO ME, THE BOARD’S TREASURER, TOM McMILLIN. HE’S FROM OAKLAND TOWNSHIP. I’M MARILYN SCHNEIDER, THE STATE BOARD EXECUTIVE. THANK YOU.>>THANK YOU, MARILYN, AND NOW WE WILL INTRODUCE NEW MEMBERS TO THE MICHIGAN DEPARTMENT OF EDUCATION. BEGINNING WITH SHULAWN. WOULD YOU INTRODUCE NEW MEMBERS TO YOUR DIVISION?>>GOOD MORNING, SHULAWN DOXIE. [ AUDIO DROPS ] I WOULD LIKE TO INTRODUCE OUR STAFF. [ AUDIO INDISTINCT ] I’LL LET THEM TELL A LITTLE BIT ABOUT YOURSELF. [ AUDIO INDISTINCT ] WE ARE PLEASED TO HAVE HIM ON BOARD. [ AUDIO INDISTINCT ]>>SO ANDREW AND I BOTH HAVE BEEN HIRED IN AS 21st CENTURY LEARNING CONSULTANTS. AND SO I HAVE BEEN WORKING WITH THE 21st CENTURY GRANT PROGRAMS FOR 12-PLUS YEARS, STARTING IN TENNESSEE, WHERE I WAS AN ELEMENTARY SCHOOL TEACHER FOR 3rd GRADE FOR ESL, AND THEN ALSO THEN WORKING WITH THE YMCA OF GREATER GRAND RAPIDS [ AUDIO INDISTINCT ] AND SO THAT’S KIND OF A LITTLE BIT OF MY BACKGROUND. [ AUDIO INDISTINCT ]>>AND I’M ANDREW PASTOOR. I ALSO SPENT TIME WITH YMCA GREATER GRAND RAPIDS. I RAN THE FEE-BASED PROGRAMS FOR OUT OF SCHOOL TIME. I WAS THERE FOR FIVE YEARS. BEFORE THAT, I TAUGHT MIDDLE SCHOOL MATH AND SCIENCE [ AUDIO INDISTINCT ] –WITH A DEGREE IN ELEMENTARY ED, AND THEN MY MASTERS IS– [ AUDIO INDISTINCT ]>>THANK YOU. AND NEXT, KYLE, WOULD YOU PLEASE INTRODUCE NEW MEMBERS TO YOUR DIVISION?>>SURE, THANKS, SHEILA. FIRST, I’D LIKE TO INTRODUCE MICHAEL LEATHEAD FROM THE OFFICE OF HEALTH AND NUTRITION. MIKE, IF YOU COULD JUST TALK A LITTLE ABOUT YOUR ROLE HERE AT THE DEPARTMENT AND WHERE YOU CAME FROM.>>YES, SO, MIKE LEATHEAD. MEN’S BEHAVIORAL HEALTH CONSULTANT FOR THE SCHOOL HEALTH AND SAFETY. FRESH OUT OF THE EDUCATION, SO THE SECONDARY LEVEL ADMINISTRATOR AND SECONDARY AND ELEMENTARY LEVEL. [ AUDIO DROPS ]>>[ INDISTINCT ], ALSO WITH OUR HEALTH AND NUTRITION SERVICES OFFICE.>>HI, SURE, GOOD MORNING. I’M VICKI LORRAINE, AND I’VE HAD THE PLEASURE OF JOINING THIS AWESOME TEAM, THE SCHOOL HEALTH AND SAFETY TEAM. PRIOR TO THAT, I WORKED WITH THE MICHIGAN DEPARTMENT OF HEALTH AND HUMAN SERVICES ABOUT 13 YEARS, WORKING WITH A PROGRAM CALLED WISE WOMAN, WHICH WORKS WITH LOW INCOME [ AUDIO INDISTINCT ] ALSO HAD OPPORTUNITIES TO WORK [ INDISTINCT ] VERY PASSIONATE ABOUT. [ AUDIO INDISTINCT ]>>FINALLY, CAITLIN HENGESBACH FROM OUR OFFICE OF FINANCIAL SERVICES.>>[ AUDIO INDISTINCT ]>>THANK YOU, KYLE, AND VENESSA, IF YOU WOULD PLEASE INTRODUCE MEMBERS TO YOUR DIVISION.>>GOOD MORNING, EVERYONE. I’M GOING TO START WITH DARCY McMAHON FROM OUR OFFICE OF EDUCATOR EXCELLENCE.>>GOOD MORNING, EVERYONE. I’M THRILLED TO BE A PART OF THE OFFICE OF EDUCATOR EXCELLENCE IN THE EDUCATOR PREP UNIT. MY ROLE IS A HIGHER EDUCATION CONSULTANT. AND I WORK SPECIFICALLY WITH THE STEM SUBJECTS AND HELPING PREPARE FOR THOSE SUBJECT AREAS AT EDUCATOR PREP SCHOOLS. MOST RECENTLY I WAS AT CMU IN THEIR SCIENCE AND MATH TECHNOLOGY CENTER. A PROGRAM DIRECTOR OVERSEEING PROJECTS LIKE PHENOMENAL SCIENCE AND THREE DIMENSIONAL SCIENCE PERFORMANCE ASSESSMENTS. PRIOR TO THAT, I DID TEACH AT CMU FOR A GOOD SIX YEARS– [ AUDIO INDISTINCT ]>>IN THE OFFICE OF EDUCATOR EXCELLENCE, [ AUDIO INDISTINCT ]>>GOOD MORNING. I’M CHELSEY MARTINEZ. SOME OF YOU MIGHT RECOGNIZE ME. I USED TO SIT OVER THERE IN MY OLD ROLE. I USED TO ATTEND THE MEETINGS AS PART OF MY JOB AS DIRECTOR OF COMMUNICATIONS AT MASSB. NOW I AM HERE, AND I AM PART OF THE OEE. I AM THE MARKETING AND COMMUNICATIONS ANALYST, SPECIFICALLY EMBEDDED IN THAT OFFICE. PART OF MY ROLE IS TO WORK DIRECTLY WITH THE RECOGNITION AND RETENTION RECRUITMENT UNIT, WHICH YOU’LL HEAR A LITTLE BIT FROM LATER THIS MORNING. PART OF– THE OTHER PART OF MY ROLE IS TO WORK ACROSS OUR OFFICE WITHIN OUR FIVE UNITS, SO I AM CROSS COLLABORATING WITH DARCY’S TEAM, WITH THE SERT UNIT, AND HELPING TO REALLY COMMUNICATE TO THE PUBLIC, TO STAKEHOLDERS AND TO EDUCATORS MORE ABOUT MICHIGAN’S PIPELINE, OUR PIPELINE ISSUE REALLY BRING A VOICE AND HOPEFULLY SHOW EVERYONE THE GREAT ASPECTS OF TEACHING IN MICHIGAN. SO REALLY EXCITED TO BE HERE. I HAVE DEGREES IN JOURNALISM, AND ALSO SOCIAL POLICY. AND I WAS BRAVE ENOUGH TO START THE WEEK OF THE POLAR VORTEX, SO THAT WAS SUPER FUN WITH SOME OF MY COLLEAGUES UP HERE, SO THANK YOU. I APPRECIATE IT. GLAD TO BE HERE.>>THANKS, CHELSEY. NEXT, SUSAN PALMITER FROM OUR OFFICE OF ASSESSMENT AND ACCOUNTABILITY.>>GOOD MORNING. [ AUDIO INDISTINCT ] I AM AN ATTORNEY AND AN EDUCATOR. IN THE CLASSROOM, I WAS TEACHING AT EAST LANSING HIGH SCHOOL. [ INDISTINCT ] LAST JANUARY, AND AT THAT POINT, ADVANCED PLACEMENT HISTORY COURSES. [ AUDIO INDISTINCT ] I ALSO STARTED DURING THE WEEK OF THE POLAR VORTEX. COMING STRAIGHT OUT OF THE CLASSROOM, MY TEACHER COLLEAGUES WERE GIVING ME A HARD TIME ABOUT MOVING ON TO THE DEPARTMENT OF ED WHERE WE DON’T GET SNOW DAYS. [ LAUGHTER ] AND, SURPRISE, WE DID! [ LAUGHTER ] VERY HAPPY TO BE HERE.>>LAST, AND CERTAINLY NOT LEAST, CORINNE EDWARDS AND HER OFFICE OF EDUCATIONAL SUPPORTS.>>GOOD MORNING AND THANK YOU FOR HAVING ME. AGAIN, CORINNE EDWARDS, OFFICE OF EDUCATIONAL SUPPORTS, I’M SERVING AS REGIONAL CONSULTANT WITH FIELD SERVICES, WITH SPECIFIC RESPONSIBILITIES IN GENESSEE COUNTY, 36 ENTITIES WITH SAME FEDERAL PROGRAMS, SCHOOL IMPROVEMENT, THINGS OF THAT NATURE. MOST RECENTLY, I– IT’S MY 34th YEAR IN EDUCATION, HAVING HELD A NUMBER OF POSITIONS, FROM CLASSROOM TEACHER, COUNSELOR, PRINCIPAL, CENTRAL OPPOSITE ADMINISTRATOR. MOST RECENTLY SERVING AS DIRECTOR OF LEARNING CURRICULUM, INSTRUCTION, AND ASSESSMENT OF SAGINAW TOWNSHIP SCHOOLS, AND NOW I’M JUST PLEASED TO BE HERE. BACHELOR’S IS FROM U OF M ANN ARBOR, MASTERS FROM EASTERN, AND DOCTORATE IS FROM WAYNE STATE.>>THANK YOU, VENESSA. AND BILL, WOULD YOU INTRODUCE YOUR STAFF MEMBER, PLEASE.>>[ AUDIO INDISTINCT ]. PAUL HAS AN EXTENSIVE BACKGROUND IN PUBLIC EDUCATION.>>HI, GOOD MORNING, MY NAME IS PAUL SCHUMMER. I’M THE RETIRED ADMINISTRATOR FROM ROSEVILLE. I WAS FORTUNATE ENOUGH OUT THERE TO LEAD TWO SUCCESSFUL TURNAROUND EFFORTS WITH A LOT OF HELP FROM MDE AND MY STAFF, AND ADMINISTRATION IN ROSEVILLE. IT WAS TOUGH TO LEAVE THE KIDS, BUT I’M ABSOLUTELY THRILLED TO CONTINUE HELPING KIDS IN THIS ROLE. SO I’M THE LATEST PARTNERSHIP AGREEMENT LIAISON.>>THANK YOU. DO WE HAVE ANY OTHER NEW EMPLOYEES WHO ARE IN THE ROOM? OKAY, SEEING NONE, LET’S WELCOME OUR NEW MDE EMPLOYEES. [ APPLAUSE ] THANK YOU. AND AGAIN, GOOD MORNING, AND WELCOME TO THE STATE BOARD OF EDUCATION MEETING. IF YOU PLAN TO OFFER PUBLIC COMMENT AT TODAY’S MEETING, PLEASE COMPLETE A FORM AND GET IT TO MARILYN. FORMS ARE AVAILABLE ON THE TABLE OUTSIDE OF THE BOARD ROOM, AND THEY MUST BE SUBMITTED PRIOR TO THE BEGINNING OF THE PORTION OF THE MEETING DEVOTED TO PUBLIC COMMENT. PUBLIC COMMENT WILL BEGIN IMMEDIATE FOLLOWING THE LUNCH BREAK, SCHEDULED AT APPROXIMATELY 1:00 PM TODAY. PLEASE BE HERE AT THAT TIME TO MAKE SURE THAT YOU HAVE AN OPPORTUNITY TO COMMENT. THE FIRST ITEM ON THE COMMITTEE OF THE WHOLE AGENDA IS THE PRESENTATION OF THE MICHIGAN 2018-19 MILKEN AWARD WINNER. CHAD DOWNS, A TEACHER FROM ANN ARBOR OPEN SCHOOL IN THE ANN ARBOR PUBLIC SCHOOL DISTRICT WAS THE 2018 RECIPIENT OF THE MILKEN EDUCATOR AWARD ON DECEMBER 12, 2018. MR. DOWNS WAS ONE OF 53 EDUCATORS FROM ACROSS THE COUNTRY TO WIN THIS PRESTIGIOUS AWARD, AND I HAD THE PLEASURE OF ATTENDING THE AWARDS CEREMONY WITH FORMER STATE BOARD OF EDUCATION MEMBER EILEEN WEISER, SO TODAY IS A PRESENTATION ONLY, AND I’D LIKE TO INTRODUCE OUR PRESENTERS, WHICH ARE VENESSA KEESLER, LEAH BREEN, AND JENNIFER ROBEL. [ INDISTINCT CHATTER ]>>A LITTLE MORE RELAXED THIS TIME. OKAY, SO THE MICHIGAN DEPARTMENT OF EDUCATION, AND THE STATE OF MICHIGAN, WAS ONCE AGAIN LUCKY ENOUGH TO HAVE A MILKEN EDUCATION AWARD WINNER THIS YEAR IN DECEMBER OF 2018, AS SUPERINTENDENT ALLES SAID. THE MILKEN FAMILY FOUNDATION WAS FOUNDED BY MICHAEL, IN LOWELL, MILKEN IN 1982, AND THE MILKEN FAMILY FOUNDATION STRIVES TO DISCOVER AND ADVANCE EFFECTIVE WAYS OF HELPING PEOPLE HELP THEMSELVES AND THOSE AROUND THEM LEAD PRODUCTIVE AND SATISFYING LIVES. THEY BELIEVE THE MEANS MOST CONDUCIVE TO ACHIEVING THESE GOALS IS THROUGH EDUCATION. THE BELIEF THAT YOUNG PEOPLE ARE NOT ONLY OUR GREATEST NATURAL RESOURCE BUT OUR GREATEST NATIONAL RESOURCE HAS BEEN THE GUIDING PHILOSOPHY BEHIND THEIR GROUNDBREAKING EDUCATION REFORM INITIATIVES. WHETHER FOUNDING THE NATION’S PREMIERE RECOGNITION PROGRAM, THE OSCARS OF EDUCATION, IF YOU WILL. THAT’S WHAT THEY CALL THEM. THEY PROMOTE EXCELLENCE THROUGH ACADEMIC ACHIEVEMENT, PRESERVING AND EXPANDING A CULTURAL LEGACY, OR PIONEERING THE NATION’S MOST SUCCESSFUL COMPREHENSIVE EDUCATION REFORM SYSTEM THE MILKEN FAMILY FOUNDATION CONTINUES TO CHAMPION STRATEGIES THAT ELEVATE EDUCATION IN AMERICA AND AROUND THE WORLD. I PROBABLY SHOULD HAVE INTRODUCED MYSELF. I AM A MANAGER IN THE RECOGNITION AND RECRUITMENT UNIT IN THE OFFICE OF EDUCATOR EXCELLENCE. MR. CHAD DOWNS, A 3rd AND 4th GRADE TEACHER AT ANN ARBOR OAKLAND, IS THE 2018 MICHIGAN RECIPIENT. SO NOW I WANT TO SHOW YOU A VIDEO OF HIM RECEIVING THE AWARD, BUT IF YOU DO HAVE A CHANCE, GO ONLINE AND WATCH THE SECOND VIDEO OF WHEN HE CALLS HIS WIFE TO TELL HER THAT HE WON AND HAD TO REMIND HER THAT SHE WAS ON SPEAKER PHONE WITH CAMERAS AROUND THEM. SO, WHICH, SHE HANDLED IT VERY WELL.>>THE MILKEN EDUCATOR AWARD GOES TO CHAD DOWNS! [ CHEERS AND APPLAUSE ] [ LAUGHTER ] [ CHEERS AND APPLAUSE ]>>THE KIDS WERE PROBABLY MORE FIRED UP THAN THE REST OF US, WHICH WAS GOOD. AND TO GIVE A LITTLE BACKGROUND, IT’S A $25,000 AWARD, AND CHAD– WHOEVER WINS IT CAN SPEND IT ANY WAY THAT THEY WISH. LAST YEAR’S RECIPIENT, NEAL CRONKITE PAID OFF HIS STUDENT LOANS AND THEN PUT SOME BACK INTO THE CLASSROOM, AND CHAD JUST TOLD ME THAT HE JUST PAID OFF HIS STUDENT LOANS. AND HE HAS ANOTHER ANNOUNCEMENT WHICH HE’S USING WITH THE MONEY THAT I WANT HIM TO TELL YOU ABOUT, SO IT’S ALL GOING BACK TO EDUCATION, SO THAT’S EVEN A MORE POSITIVE, IN THIS SITUATION. BEFORE I INTRODUCE CHAD, I WANT TO INTRODUCE HIS VILLAGE THAT COMES WITH HIM. HIS WIFE MARISSA, AND THEIR CHILDREN MARIANA AND CAMERON ARE RIGHT THERE. AND THEN CHAD’S FATHER AND MOTHER, DAVID AND RUTH DOWNS. AND THEN WE HAVE HIS PRINCIPAL, KAREN SIEGEL. AND THEN ANDREW CLULEY WHO’S THE DIRECTOR OF COMMUNICATIONS FOR ANN ARBOR PUBLIC SCHOOLS, AND DR. SWIFT WHO’S THE SUPERINTENDENT OF ANN ARBOR PUBLIC SCHOOLS. AND THEN ALSO, I WANT TO TAKE A QUICK MOMENT TO THANK MY STAFF BECAUSE WITHOUT THEM– THEY’RE ALL RIGHT THERE. THIS WOULDN’T– THIS WOULDN’T HAVE HAPPENED, SO THANKS, GUYS. SO NOW, MEMBERS OF THE BOARD, I WOULD LIKE TO PRESENT TO YOU MR. CHAD DOWNS, AND CHAD, IF YOU WANT TO STEP UP THERE. [ APPLAUSE ] CHAD, IF YOU WANT TO SAY A FEW WORDS BEFORE PRESIDENT ULBRICH PRESENTS YOU WITH THE OBELISK.>>JUST TO SHARE THAT I ALSO STARTED A SCHOLARSHIP FOR A SENIOR GOING INTO EDUCATION FOR MY HOME SCHOOL PLAINWELL, AND I’M CALLING IT THE FUTURE OF EDUCATION. [ APPLAUSE ] SO THANK YOU FOR INVITING ME HERE TODAY. THIS REALLY HAS BEEN A WONDERFUL WHIRLWIND. I HAVE HAD PEOPLE REACH OUT TO ME FROM ALL CORNERS OF MY LIFE TO SHARE CONGRATULATIONS OR A STORY, AND IT’S REALLY JUST BEEN AN EXCELLENT EXPERIENCE. I’D LIKE TO TAKE THE OPPORTUNITY TO THANK MY MOTHER AND FATHER FOR THE CONTINUING SUPPORT, AND THANK YOU FOR TEACHING ME RESILIENCE AND COMMITMENT, AND WORK ETHIC, AND HOW TO HAVE FUN IN LIFE, SO THANK YOU. I’D ALSO LIKE TO SAY THANK YOU TO MY WIFE MARISA, MY DAUGHTER MARIANA, AND MY SON CAMERON. I’M SUPER LUCKY TO HAVE YOU GUYS. THANK YOU FOR ALL YOUR LOVE AND SUPPORT. BUT I’D ALSO LIKE TO THANK ANN ARBOR OPEN’S PRINCIPAL, MY PRINCIPAL, KAREN SIEGEL. WHAT SHE DOES AND CHRIS, THE OTHER PRINCIPAL, DOES FOR OUR COMMUNITY IS REALLY FANTASTIC, AND I’VE SAID IT OVER THE LAST YEAR OR TWO THAT SHE’S BEEN HERE, THAT ANN ARBOR OPEN HAS BEEN WAITING FOR THESE TWO PRINCIPALS, SO THANK YOU, KAREN, FOR EVERYTHING YOU DO. I’D ALSO LIKE TO THANK DR. SWIFT, ANN ARBOR PUBLIC SCHOOLS SUPERINTENDENT. SHE’S ALSO THE 2018 SUPERINTENDENT OF THE YEAR, AND I’M REALLY HONORED TO HAVE YOU HERE. AND THEN TO THE MICHIGAN DEPARTMENT OF EDUCATION, AND YOUR VISION TO HAVE A TOP TEN EDUCATION STATE WITHIN THE NEXT TEN YEARS, I READ THROUGH YOUR STRATEGIC PLAN, AND AS YOUR DEPARTMENT CONTINUES TO MOVE TO THE WHOLE CHILD APPROACH BY BLENDING HOME, SCHOOL, AND COMMUNITY WITH THE FOCUS ON EMOTIONAL AND SOCIAL LEARNING, I’D REALLY LIKE TO INVITE YOU TO ANN ARBOR OPEN AND TO PARTNER WITH US. WE’VE BEEN TEACHING THE WHOLE CHILD AS THE HEART OF OUR PROGRAM FOR OVER 40 YEARS, AND WE’D BE HAPPY TO SHARE OUR ESTABLISHED PRACTICES WITH YOU AND PLAY A PART IN A BRIGHTER AND BETTER MICHIGAN, SO THANK YOU AGAIN FOR HAVING ME. [ APPLAUSE ]>>WELL, ON BEHALF OF THE STATE BOARD OF EDUCATION, AND THE DEPARTMENT OF EDUCATION, IT’S MY HONOR TO PRESENT TO YOU THIS AWARD. ANY TIME WE GET TO RECOGNIZE TEACHERS, IT’S A GREAT DAY FOR US, SO WE REALLY– WE LOVE THAT, BUT THE GREAT THING ABOUT THIS AWARD IS IT REALLY IS SO TRANSFORMATIONAL. BECAUSE IT COMES WITH ACTUAL DOLLARS THAT YOU CAN USE NOT ONLY FOR YOUR FAMILY BUT YOUR CLASSROOM AS WELL, AND IT’S ALWAYS AMAZING THAT THAT’S WHAT TEACHERS CHOOSE TO DO. THANK YOU VERY MUCH FOR YOUR SERVICE.>>THANK YOU.>>AND CONGRATULATIONS.>>THANK YOU VERY MUCH. [ APPLAUSE ] [ INDISTINCT CHATTER ]>>THANK YOU, EVERYBODY. THANK YOU. [ INDISTINCT CHATTER ] AND CONGRATULATIONS AGAIN TO CHAD, AND THANK YOU TO HIS FAMILY FOR BEING HERE AND SUPPORTING HIM, AND AS CHAD EXTENDED AN INVITATION TO VISIT THE ANN ARBOR OPEN SCHOOL, I WOULD HIGHLY ENCOURAGE YOU TO. I HAD A CHANCE TO VISIT IT WHILE I WAS– VISIT THE CLASSROOMS– WHILE– PRIOR TO THE AWARDS CEREMONY, AND IT REALLY IS A FABULOUS OPPORTUNITY FOR CHILDREN TO PROGRESS BASED ON THEIR INTERESTS AND AT THEIR OWN PACE. IT’S INDIVIDUALIZED AND DIFFERENTIATED, AND IT TAKES A WHOLE CHILD APPROACH TO TEACHING AND LEARNING, SO I WOULD HIGHLY ENCOURAGE YOU TO VISIT THE SCHOOL, AND AGAIN, THANK YOU TO DR. SWIFT FOR BEING HERE, AND YOUR PRINCIPAL FOR BEING HERE. IT’S GREAT TO SEE BOTH OF YOU AGAIN. AND THANK YOU TO THE FAMILY FOR BEING HERE. SO WE WILL MOVE ON TO THE NEXT ITEM ON OUR AGENDA, WHICH IS A PRESENTATION OF THE REVISED MODEL CODE OF STUDENT CONDUCT. THE MODEL CODE OF STUDENT CONDUCT HAS BEEN UPDATED TO REFLECT RECENT CHANGES TO THE REVISED SCHOOL CODE. STAFF IS HERE TO PRESENT AND TO REVIEW THE DOCUMENT AND DISCUSS CHANGES TO THE DOCUMENT FOLLOWING A PERIOD OF PUBLIC COMMENT. THIS TOPIC WILL COME BACK TO THE BOARD FOR YOUR APPROVAL, AND WE ANTICIPATE THAT THAT WILL COME DURING THE JUNE 11th MEETING. OUR PRESENTERS TODAY ARE KYLE GUERRANT AND DIANE GOLZYNSKI. WE THANK YOU FOR BEING HERE AND LOOK FORWARD TO YOUR PRESENTATION.>>THANK YOU. GOOD MORNING, EVERYONE. THANK YOU FOR HAVING US BACK WITH YOU. WE’RE HAPPY TO TALK ABOUT THE MODEL CODE OF STUDENT CONDUCT TODAY. MY NAME IS DIANE GOLZYNSKI. I’M THE DIRECTOR OF THE OFFICE OF HEALTH AND NUTRITION SERVICES. SO TODAY WE WANT TO PRESENT THE REVISED MODEL CODE OF STUDENT CONDUCT. AS YOU KNOW, OUR MOST CURRENTLY APPROVED VERSION WAS IN 2014, AND WE WANT TO MAKE SURE THAT WE’RE ENSURING SCHOOL SAFETY, FOSTERING HEALTHY LEARNING COMMUNITIES WHILE COMPLYING WITH ALL OF THE MOST RECENT LEGISLATIVE CHANGES. SO AS I SAID, THE MOST RECENT VERSION WAS APPROVED AUGUST 12 OF 2014. THE CURRENT MODEL CODE CONTAINS UPDATED ZERO TOLERANCE POLICY LANGUAGE AS WELL AS ALIGNING WITH PA 360 TO 366 OF 2016, WHICH WAS IN REGARDS TO SUSPENSIONS AND EXPULSIONS, AND TALKS A GREAT DEAL ABOUT RESTORATIVE PRACTICES, AS WELL AS PA 144 OF 2018, WHICH IS AROUND CRIMINAL SEXUAL CONDUCT. OUR 2014 ENCOURAGES SCHOOLS TO ADOPT RESEARCH BASED OR EVIDENCE BASED EDUCATIONAL AND BEHAVIORAL PRACTICES, AND STRATEGIES THAT CREATE POSITIVE LEARNING ENVIRONMENTS FOR STUDENTS WITH OUR ULTIMATE GOAL THAT GUIDES ALL OF US, WHICH IS THEIR ACADEMIC SUCCESS. STUDENTS ARE ASKED TO CALL– CALLED UPON TO HONOR THEIR RESPONSIBILITY TO THEIR COMMUNITIES, ESPECIALLY WHEN THEY CAUSE HARM TO OTHERS. SOME OF THE NOTEWORTHY CHANGES AS A RESULT OF PA 360-366 WHICH IS THE SUSPENSIONS AND EXPULSIONS UPDATE, CONSIDER USING RESTORATIVE PRACTICES AS AN ALTERNATIVE OR IN ADDITION TO SUSPENSION OR EXPULSION. RESTORATIVE PRACTICES SHOULD BE THE FIRST CONSIDERATION RATHER THAN REMOVING STUDENTS FROM THE CLASSROOM. IN ADDITION, BEFORE SUSPENDING OR EXPELLING A STUDENT, THE FOLLOWING SHALL BE CONSIDERED. WE NEED TO LOOK AT WHAT THE PUPIL’S AGE IS, THEIR DISCIPLINARY HISTORY, WHETHER OR NOT THEY HAVE A DISABILITY OR ARE A SPECIAL EDUCATION STUDENT, THE SERIOUSNESS OF THE VIOLATION, AND IF THE SAFETY OF OTHERS WAS THREATENED. A TEN DAY SUSPENSION OR EXPULSION IS NOT JUSTIFIED. IT PRESUMES THAT IT’S NOT JUSTIFIED UNLESS THE OTHER FACTORS WERE CONSIDERED. LESS THAN IS THE OTHER FACTORS MUST STILL BE CONSIDERED. THEN WE HAVE AN UPDATE TO THE MICHIGAN PENAL CODE, WHICH IS IN REGARDS TO CRIMINAL SEXUAL CONDUCT, THIS IS WHERE THE STUDENT ONCE THEY RETURN TO SCHOOL CANNOT RETURN TO THE SAME BUILDING. IN WHICH THE PERSON WHO WAS THE VICTIM IN THIS CASE GOES TO SCHOOL, SO THE PERPETRATOR OR THE PERSON WHO WAS CONVICTED MUST GO TO A DIFFERENT BUILDING. WE DID PUT THIS OUT FOR PUBLIC COMMENT BACK IN 2017. WE HAD A TOTAL OF 17 RESPONDENTS. YOU’LL THE SEE THE DISTRIBUTION OF WHO RESPONDED THERE. THE COMMENTS– THERE WERE NO NEGATIVE COMMENTS TO THE DOCUMENT AS A WHOLE. THERE WERE SOME SPECIFIC CRITIQUES SUCH AS WE HAD A PARENT WHO REALLY WANTED US TO ADDRESS DRESS CODE IN A STRONGER MANNER. THERE WAS SOMEONE WHO WANTED MORE DETAIL IN THE DRUGS SECTION. AGAIN, THAT’S ALL HANDLED AT THE LOCAL LEVEL. THE LOCAL SCHOOL DISTRICT HAS THE OPPORTUNITY TO MAKE THOSE CHANGES THEMSELVES. THE MAJORITY OF THE CHANGES CAME FROM THE THRUN LAW FIRM. SO THAT WE WERE ASSURED THAT THE LANGUAGE WAS CONSISTENT WITH LEGISLATION AND OTHER LEGAL LANGUAGE. SO WHAT ARE OUR NEXT STEPS? WE’RE BRINGING THIS BACK TO YOU TODAY. WE WILL TAKE IT BACK OUT FOR PUBLIC COMMENT SO THAT WE CAN HEAR WHAT THE PUBLIC HAS TO SAY ABOUT IT. AND THEN WE HOPE TO BRING THE FINAL VERSION TO YOU AT THE JUNE MEETING.>>AND JUST FOR KIND OF HISTORY PURPOSES FOR OUR NEWER MEMBERS, WE BROUGHT THE POLICY BEFORE THE BOARD RECENTLY, AND THERE WERE SOME– IT DID NOT PASS. THE PUBLIC COMMENT THAT DIANE IS REFERRING TO WAS PUBLIC COMMENT TAKEN DURING THAT TIME PERIOD. WE’VE SHARED THAT ENTIRE FEEDBACK FROM THE BOARD. ALL THE RESPONSES THAT WE GOT BACK, WE CAN DO SO AGAIN IF EVERYBODY WANTS TO SEE ALL THE COMMENTS THAT WE RECEIVED, BUT WE WILL FOLLOW SIMILAR PUBLIC COMMENT PROCESS, AND AS YOU GUYS REMEMBER LAST MONTH THE ACLU AND THE ADVOCATE CENTER CAME AND THIS WAS ONE OF THEIR RECOMMENDATIONS WAS TO REVISE THE BOARD’S CODE OF CONDUCT TO GIVE BETTER GUIDANCE TO SCHOOLS, AND IF YOU NOTICE ON PAGE 36 OF THE DOCUMENT, NIKKI HAD SUGGESTED AROUND THE SEXUAL ASSAULT LANGUAGE WE’VE INCORPORATED THERE. WHILE THE POLICY’S UP FOR PUBLIC COMMENT AGAIN, WE WILL DO ANOTHER WALK THROUGH WITH OUR PARTNERS AT THRUN TO ENSURE THAT THERE WEREN’T ANY OTHER LEGISLATIVE OR LAW CHANGES SINCE THE LAST TIME WE BROUGHT THIS BEFORE THE BOARD. AND WITH THAT WE’LL TURN IT BACK OVER TO YOU.>>THANK YOU, KYLE AND DIANA. ANY QUESTIONS OR COMMENTS FROM BOARD MEMBERS?>>JUST-JUST ONE QUESTION, AND I DON’T KNOW. YOU MIGHT HAVE MENTIONED IT. I THINK ONE OF THE OTHER QUESTIONS, AND I DON’T KNOW IF IT FITS HERE OR WITH SOMEONE ELSE WAS AROUND SOME OF THE DATA THAT COULD BE COLLECTED THAT THEY WEREN’T ABLE TO TEASE OUT WHEN ACLU DID THE PRESENTATION, AND I KNOW IT’S NOT NECESSARILY RELATED TO THIS, BUT ARE WE WORKING ON THAT… SOME OF THE QUESTIONS THAT THEY HAD AS FAR OF SOME OF THE DATA MIGHT HAVE TIED IN TO SOME OF THE QUESTIONS THAT WE HAD.>>WELL, I THINK YOU’RE REFERRING TO THE SUSPENSION– OUR ABILITY TO COLLECT SUSPENSION DATA, AND SO–>>YES, YES, THANK YOU.>>YEAH.>>JUST FOR CLARITY, WE ARE ALLOWED TO COLLECT A SUSPENSION AND EXPULSION DATA ON STUDENTS WITH IEPs. IT’S A FEDERAL REGULATION, AND WE CAN COLLECT EXPULSION DATA ON ALL STUDENTS THAT COMMIT CERTAIN OFFENSES AS PART OF THE SAFE SCHOOL– OUR STATE SAFE SCHOOL LEGISLATION. WE DO NOT HAVE THE ABILITY OR THE MANDATE TO COLLECT SUSPENSION DATA ON ALL GENERAL ED STUDENTS IN OUR STATE AND THAT WAS SOMETHING THAT WE TRIED DOING LAST SCHOOL YEAR AND RECEIVED, YOU KNOW, SOME PUSHBACK ON THE FIELD ABOUT HOW WE WERE COLLECTING IT AND THE AMOUNT OF DATA THAT WE WERE COLLECTING, THE BURDEN THAT THAT PUT ON SCHOOLS, SO WE ARE TRYING TO FIGURE OUT OUR OPTIONS USING THE U.S. ED CIVIL RIGHTS DATA AROUND SUSPENSION AND EXPULSIONS FOR GENERAL ED STUDENTS. AND THEN TYING THAT TO THINGS LIKE THE PARENT DASHBOARD AND OTHER THINGS WE REPORT DATA BACK TO SCHOOLS SO THAT WAY PARENTS CAN HAVE AN UNDERSTANDING OF WHAT THE DISCIPLINARY ENVIRONMENT LOOKS LIKE FOR STUDENTS IN THEIR SCHOOL COMMUNITIES. BUT AT THIS POINT, OUR ABILITY TO TEASE OUT THE DATA, DISPARITIES AROUND RACE AND IEP STATUS, AND WHAT THAT DATA LOOKS LIKE NATIONALLY WHERE STUDENTS OF COLOR AND STUDENTS WITH IEPs ARE TWO OR THREE TIMES MORE LIKELY TO BE SUSPENDED THAN THEIR PEERS. THAT’S A TRACK THAT WE’RE TRYING TO GO DOWN. WE HAVEN’T GOT THE MANDATE YET TO DO THAT IN THE WAY THAT WE WOULD LIKE TO, BUT WE ARE STILL WORKING ON THAT.>>QUICK QUESTION.>>YES, MICHELLE?>>SO YOU SAID THAT YOU COULD MAYBE TEASE IT OUT THROUGH THE CIVIL RIGHTS FROM THE FEDS? WHAT IS THAT DATA AND EXACTLY WHAT DOES THAT ENTAIL OR CONTAIN?>>SIMILAR TO– I’M NOT SURE THE FULL DATA COLLECTION SET, IF IT HAS RACE AND GENDER OR OTHER IDENTIFYING FACTORS AS PART OF THE INCIDENT, BUT IT DOES HAVE THE SUSPENSION LEVEL DATA BY BUILDING FOR DISTRICTS, THEY’RE REQUIRED TO REPORT IT EVERY OTHER YEAR, SO YOU’VE GOT THE REPORTING STATUSES. IT’S ONLY A TWO YEAR WINDOW THAT WE CAN SEE WHAT THAT LOOKS LIKE, AND IT’S COMPARED– IT’S A NATIONAL DATA SET SO WE CAN COMPARE OURSELVES TO OTHER STATES WITH THAT DATA. I’M GOING TO LOOK TO VENESSA TO SEE IF SHE KNOWS. DO YOU KNOW OFF THE TOP OF YOUR HEAD WHAT SOME OF THE FULL PIECES ARE IN THE CIVIL RIGHTS DATA COLLECTION SET AROUND SUSPENSIONS? LIKE DO THEY GET INTO RACE AND ETHNICITY, OR–>>YES, I– LET ME CHECK WITH ALLISON, WHO IS OUR RESIDENT EXPERT ON EVERYTHING IN THE CIVIL RIGHTS DATA COLLECTION BEFORE I ANSWER MORE.>>SO MICHELLE, SOME OF THAT DATA DOES EXIST. AGAIN, IT’S ONLY COLLECTED EVERY OTHER YEAR, SO WHEN WE LOOK AT MAKING, YOU KNOW, POLICY OR RESOURCE ALLOCATION DECISIONS, BOTH AT A STATE AND LOCAL LEVEL. IT’S NOT SOMETHING YOU DO. YOU CAN CUT OFF MAYBE EVERY YEAR, BUT THERE ARE SOME– THERE IS SOME SUSPENSION DATA ON OUR GENERAL ED STUDENTS THROUGH THAT COLLECTION.>>I’D BE CURIOUS TO SEE HOW THAT– WHAT THAT LOOKS LIKE.>>I THINK THE LAST TIME THEY AGGREGATED IT WAS ’15-16, I THINK, SO THE– EVEN THE MOST RECENT TWO YEAR CYCLE HASN’T BEEN AGGREGATED AND SHARED NATIONALLY.>>YEAH, BECAUSE THE WAY THAT ACLU PRESENTED IT, I DON’T REMEMBER EVERYTHING, BUT IT SOUNDED AS IF IT WAS UP TO THE DEPARTMENT TO GATHER SOME OF THE DATA THAT THEY WERE ALSO LOOKING FOR TO PUT IN THE REPORT. SO MAYBE THAT’S SPEAKING TO WHAT YOU’RE SAYING IS HOW WE HOLD DOWN THAT INFORMATION.>>ENROLLMENT DEMOGRAPHIC, PRESCHOOL, MATH SCIENCE COURSES, LIKE [ INDISTINCT ]. AND SO ALL THOSE– KIND OF SOME OF THOSE ARE OUTCOMES THAT THEY LOOK AT BY ENROLLMENT DEMOGRAPHIC. THAT’S KIND OF THE CORE OF THE–>>THEY LOOK AT SUSPENSION RATES? [ INDISTINCT CHATTER ]>>OTHER QUESTIONS OR COMMENTS? OKAY, SEEING NONE, THE MODEL CODE OF CONDUCT WILL GO OUT FOR PUBLIC COMMENT AND THEN WE WILL BRING IT BACK TO THE BOARD IN JUNE AND SHARE THE PUBLIC COMMENT WITH YOU AND THEN TAKE ACTION. OKAY, THANK YOU VERY MUCH.>>THANK YOU.>>THANK YOU.>>AND OUR NEXT ITEM ON THE AGENDA IS THE PRESENTATION ON SCHOOL FINANCE. TODAY WE WELCOME DAVE MARTELL AND BOB DWAN FROM THE MICHIGAN SCHOOL BUSINESS OFFICIALS. THEY ARE HERE TO PRESENT THE BASICS ON SCHOOL FINANCE. THIS PRESENTATION IS FOR INFORMATIONAL PURPOSES ONLY AND BOARD ACTION IS NOT REQUIRED. DAVE MARTELL IS THE EXECUTIVE DIRECTOR OF MICHIGAN SCHOOL BUSINESS OFFICIALS AND BOB DWAN IS THE ASSOCIATE EXECUTIVE DIRECTOR OF MICHIGAN SCHOOL BUSINESS OFFICIALS, AND WE WELCOME BOTH OF YOU TO THE STATE BOARD OF EDUCATION MEETING. WE ARE READY. WE ARE READY WHEN YOU ARE, DAVE.>>SO THAT MEANS WE HAVE AN HOUR AND A HALF NOW INSTEAD OF JUST AN HOUR? [ LAUGHING ]>>TECHNICALLY, YES, YOU DO.>>I LIKE HOW YOU SAID THAT. THANK YOU FOR THE INVITATION TO COME AND TALK TO YOU TODAY. AS WE UNDERSTAND IT, WE’RE GOING TO TALK ABOUT THE BASICS OF SCHOOL FINANCE, BUT WE CERTAINLY WILL DELVE INTO LITTLE PIECES AROUND SOME OF THOSE BASICS. I DID WANT TO START OFF AND INDICATE TO YOU A LITTLE BIT ABOUT OUR ORGANIZATION. WE’RE A PROFESSIONAL ORGANIZATION OF SCHOOL MANAGERS. WE WORK IN THE NON-CURRICULAR SIDE, SO THE NON-ACADEMIC SIDE OF SCHOOL DISTRICTS. MANY FOLKS THAT YOU MIGHT RELATE TO FROM THE STANDPOINT OF CERTAINLY THE FINANCE SIDE WHICH IS OUR MOST OBVIOUS AREA, BUT WE DO CERTAINLY ACCOUNTING, PURCHASING, BUT WE DO FACILITY DIRECTORS, TRANSPORTATION DIRECTORS, HR DIRECTORS, FOOD SERVICE DIRECTORS, TECHNOLOGY DIRECTORS, SO KIND OF ALMOST ALL ASPECTS OF THE SCHOOL OPERATIONS OUTSIDE OF THE ACADEMIC SIDE. OUR MISSION IS TO CONTINUALLY IMPROVE THE LEADERSHIP OF AND THE MANAGEMENT IN SCHOOL BUSINESS AND OPERATIONS IN OUR SCHOOL DISTRICTS. WE’VE BEEN AN ASSOCIATION FOR QUITE A WHILE. WE WERE FOUNDED IN 1937 AND WE’RE A NON PROFIT, AND WE CERTAINLY TRY TO SERVE THE MULTI-FACETED INTERESTS OF EDUCATION AND ESTATE. AND WE CERTAINLY ADHERE TO ETHICAL, LEGAL, MORAL, AND PROFESSIONAL STANDARDS IN THE CONDUCT AND FULFILLMENT OF OUR PROFESSIONAL RESPONSIBILITIES. AND SO ON A DAY TO DAY BASIS, WE DO A LOT OF PROFESSIONAL DEVELOPMENT. THAT’S OUR KEY FUNCTION. WE HAVE A CERTIFICATION PROGRAM FOR THOSE STARTING OUT IN DIFFERENT AREAS OF SCHOOLS ON A BUSINESS SIDE. WE HAVE 14 DIFFERENT TRACKS. SO IT’S ONE OF OUR BASIC FUNCTIONS OF BEING PROFESSIONAL DEVELOPMENT. WE DO HAVE A FORUM FOR THE EXCHANGE OF IDEAS. WE THINK THAT’S REALLY IMPORTANT BETWEEN OUR MEMBERS. AND WE HAVE A LOT OF PRODUCTS AND SERVICES THAT WE PUT IN FRONT OF OUR MEMBERS TO HELP THE DISTRICTS BE MORE EFFECTIVE AND EFFICIENT. THAT’S A LITTLE BIT ABOUT MSBO SO YOU MAYBE HAVE A BETTER IDEA OF WHAT WE DO. TODAY BOB AND I WOULD LIKE TO TALK TO YOU ABOUT BASIC SCHOOL FUNCTIONS IN FINANCE. WE’LL TALK ABOUT FUNDING. WE’LL TALK ABOUT SCHOOL AID. WE’LL ALSO TALK ABOUT SOME OF THE PRESSURES ON THE SCHOOL AID FUND, INCLUDING, AS YOU CAN SEE, RETIREMENT, FUNDING COSTS OF HIGHER ED, AND PROJECTED PUPIL ACCOUNTS. ALL CHALLENGES TO US. WE PLAN TO HAVE PLENTY OF TIME FOR QUESTIONS AND ANSWERS. SO WE WILL HONOR THAT PIECE OF IT. AND I DO WANT TO ADD THAT MANY OF OUR SLIDES ARE PROVIDED, OR THAT WE’VE USED ON AN ONGOING BASIS, ARE FROM OUR PARTNERSHIP WITH THE HOUSE FISCAL AGENCY, SENATE FISCAL AGENCY, AND THE STATE BUDGET OFFICE. WE WORK WITH THEM CLOSELY, AND WE FULLY BELIEVE IN NOT RECREATING THE WHEEL. WITH THEIR INFORMATION, WE TRY TO TAKE THAT INFORMATION AND SHARE THAT WITH AS MANY PEOPLE AS WILLING TO TALK ABOUT IT AND LISTEN TO IT. IN KIND OF TAKING A LOOK AT SCHOOL FINANCE, WE HAVE TO KIND OF START BACK AND THINK ABOUT WHAT KIND OF ENTITIES WE’RE DEALING WITH. WE CERTAINLY HAVE THE TRADITIONAL LOCALLY CONTROLLED SCHOOL DISTRICTS THAT WE ALL ARE FAMILIAR WITH, BUT WE ALSO HAVE CYBER SCHOOLS, PUBLIC SCHOOL ACADEMIES, AND WE ALL– AS WE TALK ABOUT, MANY TIMES NOW, IS THAT WE’RE ALSO FUNDING COMMUNITY COLLEGES AND UNIVERSITIES OR A PORTION OF THOSE OUT OF THE SCHOOL AID FUND AS WELL. SO THERE’S 539 SCHOOL DISTRICTS THAT ARE TRADITIONAL. WE HAVE ABOUT 1.3 MILLION STUDENTS IN THOSE TRADITIONAL SCHOOLS OR ABOUT 90% OF THE PUPILS THAT WE ARE EDUCATING. PUBLIC SCHOOL ACADEMIES HAVE BEEN AROUND FOR A WHILE NOW. THEY’RE INDEPENDENT PUBLIC SCHOOLS AS WELL, AND THERE’S BEEN A HISTORY OF CAPS PUT ON THAT GROUP OF INSTITUTIONS, WHICH HAS EVENTUALLY COME TO THE PART WHERE WE DON’T HAVE THOSE SAME KIND OF RESTRICTIONS ANYMORE. AND SCHOOLS ARE FUNDED JUST LIKE A REGULAR PUBLIC SCHOOL, A TRADITIONAL PUBLIC SCHOOL, AND THEY GET THE MINIMUM STATE FOUNDATION ALLOWANCE. THOUGH CYBER SCHOOLS IS KIND OF THE NEWEST CONCEPT, AND THERE’S ABOUT 14 CYBER SCHOOLS THESE DAYS ENROLLING ABOUT 12,000 STUDENTS, AND PUBLIC SCHOOL ACADEMIES IN TOTAL ARE ABOUT 146,000 STUDENTS, SO A LITTLE OVER TEN PERCENT OF THE STUDENT POPULATION. WHEN WE TALK ABOUT FUNDING FOR SCHOOLS, THERE’S SOME BASIC PREMISES THAT WE USE. AND GOING BACK TO 1994 WHEN PROPOSAL A WAS PASSED IN MICHIGAN, WE NOW HAVE A PAYMENT FUNCTION THAT COUNTS THE NUMBER OF STUDENTS WITH AN APPROPRIATE AMOUNT OF FUNDING TO THOSE STUDENTS. SO IN THE OLD DAYS, WE HAD A LOT OF DISTRICTS WHO WERE OUT OF FORMULA. IN OTHER WORDS, THEY GOT THE MONEY THAT THEY NEEDED TO EDUCATE FROM THEIR COMMUNITY THROUGH PROPERTY TAXES, AND THEY DIDN’T REALLY RECEIVE MUCH OR ANYTHING FROM THE STATE TO DO THAT. AND WHEN PROPOSAL A WENT INTO PLACE, IT ALL SWITCHED, AND THERE’S RELATIVELY FEW OUT OF FORMULA DISTRICTS, BUT THERE ARE DISTRICTS WE CALL HOLD HARMLESS DISTRICTS. AND THERE’S ALSO DISTRICTS THAT ARE JUST TRADITIONAL IN THE FACT THAT THEY GET A NUMBER OF PUPILS THAT THEY ARE EDUCATING, AND THEY MULTIPLY THAT TIMES THE FOUNDATION ALLOWANCE THAT THEY’RE ABLE TO RECEIVE, AND THAT IS THE BASIC FUNCTION OF THEIR FUNDING. THERE’S CERTAINLY OTHER AREAS OF FUNDING THAT COME WITH IT, SO THERE’S FEDERAL FUNDING, AND THERE’S OTHER KINDS OF CATEGORICALS AS WELL, BUT THE FOUNDATION ALLOWANCE IS THE KEY PIECE. IT’S IMPORTANT TO REMEMBER THAT A LOCAL DISTRICT HAS WHAT WE WOULD– THE OLD TERMS WERE NON HOMESTEAD PROPERTY TAXES, BUT IT’S THE BUSINESSES AND SECOND HOMES IN THEIR COMMUNITY, AND EACH DISTRICT WILL CHOOSE TO LEVY TAXES AND PASS MILLAGES TO MAKE UP A PORTION OF THEIR FOUNDATION ALLOWANCE. AND SO YOU KNOW, WITH THIS WHOLE THING OF PROPOSAL A, IT CERTAINLY CAME ABOUT TO DO A NUMBER OF THINGS. IT FIRST OF ALL GAVE PROPERTY TAX RELIEF BECAUSE WE WERE PAYING A BIG NUMBER OF MILLAGE FOR OUR PROPERTY TAXES. AND IT WAS A PUSH TOWARD MORE EQUITABLE FUNDING FOR SCHOOLS, AND IT PROVIDED A WAY TO CLOSE THE GAP BETWEEN THE TOP AND THE BOTTOM IN THOSE FUNCTIONS. THE FOUNDATION ALLOWANCE CONTINUES TO BE THE LARGEST PORTION OF OUR FUNDING. AND THIS PAST YEAR IN 2018-19 THAT WE’RE CURRENTLY IN, THE FOLKS AT THE BOTTOM OF THE SCALE, SO TO SPEAK, THE MINIMUM FOUNDATION ALLOWANCE GOT $240 PER PERSON, PER PUPIL INCREASE. AND AT THE TOP OF THE SCALE WAS $120, SO WE CALL IT THE 2X FORMULA, TRYING TO CONTINUE TO NARROW THAT GAP. SO AS WE TALKED ABOUT THIS FOUNDATION ALLOWANCE AND SOME OF THE FUNDING COMING FROM BOTH THE STATE AND ALSO FROM LOCAL, THERE’S A CALCULATION THE STATE DOES WITH THAT. SO EACH DISTRICT HAS THE AMOUNT OF BUSINESS AND SECOND HOME FUNDING– ER, MILLAGE AND PROPERTY TAXES IN THEIR DISTRICT, AND THEY COLLECT THAT, AND WHAT THE STATE DOES IS IT BASICALLY SAYS, “OKAY, YOU’VE GOT THIS NUMBER “OF STUDENTS AND THIS AMOUNT “OF FOUNDATION ALLOWANCE “PER PUPIL, AND SO HERE’S “THE AMOUNT THAT YOU’RE GOING TO “GET TO EDUCATE KIDS.” THE FIRST THINGS THE STATE DOES IS DETERMINE, WELL, HOW MUCH ARE YOU COLLECTING LOCALLY, AND THEN THEY DEDUCT THAT FROM HOW MUCH YOU’RE SUPPOSED TO GET FROM THE STATE, AND THEN YOU GET THE NET FROM THAT, SO IN OTHER WORDS, YOU MIGHT HAVE A NEW BUSINESS OPEN IN YOUR DISTRICT, AND YOU EXPECT, OKAY, WELL, THERE’S NEW FUNDING, NEW TAXES COMING IN. SO WE’RE GOING TO HAVE MORE MONEY FOR THE SCHOOLS, BUT WHAT HAPPENS IS THE STATE JUST DEDUCTS MORE FROM THE AMOUNT THEY’RE GOING TO GIVE YOU, SO IN THE END, YOU STILL GET THE SAME AMOUNT OF FOUNDATION ALLOWANCE TIMES THE SAME NUMBER OF KIDS, AND THAT’S KIND OF HOW THAT WORKS, BUT THOSE TAXES MAKE UP THE AMOUNT OF MONEY THAT’S AVAILABLE TO ALL STUDENTS, SO THAT KIND OF EQUATES THINGS ACROSS ALL DISTRICTS IN MANY WAYS. SO WE NOW HAVE, AS WE TALKED ABOUT, WE STILL HAVE A BREAKDOWN OF STUDENTS AND DIFFERENT KINDS OF DISTRICTS THAT ARE FUNDED A LITTLE BIT DIFFERENTLY. SO WHEN WE TALK ABOUT FOUNDATION ALLOWANCE, THERE’S THE FOLKS AT THE MINIMUM FOUNDATION ALLOWANCE, THERE’S DISTRICTS AT THE TOP OF THE FOUNDATION ALLOWANCE. THAT GAP HAS NARROWED THROUGHOUT THE YEARS, BUT THERE’S ALSO DISTRICTS THAT BACK WHEN PROPOSAL A STARTED, THEY HAD SO MUCH SUPPORT FROM THEIR LOCAL DISTRICTS THAT THEY WERE ABLE TO GO OUT AND PASS MILLAGES TO HOLD THEM HARMLESS FOR THE AMOUNT OF MONEY THAT THEY WOULD GET BECAUSE THE STATE STARTED OUT AND SAID, “HERE’S THE TOP “AND HERE’S THE BOTTOM, “AND WE’RE NOT GOING TO PAY “ANY DISTRICTS ANYTHING MORE “THAN THAT TOP.” AND THAT WAS SOMEWHAT ARTIFICIAL TOP, BECAUSE IN MANY DISTRICTS THAT WERE GETTING MORE MONEY THAN THAT FROM THEIR LOCAL DISTRICTS OR THEIR LOCAL COMMUNITIES. SO EACH DISTRICT THEN THAT WAS ABOVE THAT LARGE– THE HIGHEST FOUNDATION THAT THE STATE WOULD PAY HAD TO GO TO THEIR COMMUNITIES AND PASS A MILLAGE TO HELP PAY FOR THAT. AND SO WE STILL HAVE DISTRICTS OUT THERE THAT ARE GETTING HIGHER THAN THE STATE MAXIMUM, BUT AS WE’VE SEEN NOW, THERE’S A LARGE NUMBER OF DISTRICTS THAT ARE BASICALLY NOW AT THE STATE MAXIMUM, AND IT’S GETTING TIGHTER OVER TIME. THE SLIDE YOU SEE HERE, AND I KNOW IT’S SMALL, BUT IT DOES SHOW YOU DIFFERENT VARYING DISTRICTS, AND IF YOU LOOK ON THE LEFT SIDE OF THAT, YOU CAN SEE A DISTRICT CLARKSTON THAT RECEIVES THE BULK OF THEIR MONEY FROM THE STATE. THERE’S AN EXAMPLE OF A DISTRICT THAT GETS MOST OF THEIR MONEY FROM THE STATE AND SOME FROM PROPERTY TAXES. THEN FAIRVIEW, RIGHT NEXT TO IT, GETS MOST OF THEIR MONEY FROM LOCAL MILLAGE FOR THEIR BUSINESSES AND SECOND HOMES, AND SO THEY GET A VERY SMALL AMOUNT FROM THE STATE. SO THERE’S TWO CONTRASTING DISTRICTS. THEY GET THE SAME AMOUNT OF MONEY PER PUPIL, BUT THE MONEY’S COMING FROM DIFFERENT PLACES. THE THREE IN THE MIDDLE SHOW OUT OF FORMULA DISTRICTS. IN OTHER WORDS, THEY COME UP WITH AN AMOUNT PER PUPIL TIMES THE NUMBER OF STUDENTS THEY HAVE, AND COME TO A NUMBER, LET’S SAY IT’S $10 MILLION, BUT WHEN THEY GO AND DO THEIR MILLAGE TO THEIR LOCAL COMMUNITY FOR THEIR BUSINESSES AND SECOND HOMES, THEY ACTUALLY COLLECT MORE THAN $10 MILLION. SO THAT’S WHAT I WOULD CALL AN OUT OF FORMULA DISTRICT. IN OTHER WORDS, THEY DON’T GET MONEY FROM THE STATE, AT LEAST FROM THE FOUNDATION ALLOWANCE PORTION. BUT THEY GET TO KEEP THE AMOUNT ABOVE TO EDUCATE THEIR KIDS. AND THEN THE THREE ON THE OTHER SIDE THERE ARE EXAMPLES WHERE WE HAVE HOLD HARMLESS, OR AT LEAST SOUTHFIELD AND BIRMINGHAM, THE TWO ON THE ENDS THERE. AND SO YOU CAN SEE WHERE THERE’S AN EXAMPLE THAT THE STATE– THAT INDIVIDUAL COMMUNITY– TO BE ABLE TO GET THE AMOUNT OF FUNDING THEY WERE GETTING PRIOR TO PROPOSAL A AND NOT BE HARMED, THAT THEY’RE COLLECTING ADDITIONAL MILLAGES IN THEIR COMMUNITIES, OR APPROVING THOSE ADDITIONAL MILLAGES TO HELP PAY FOR THEM. YOU KNOW, THAT’S KIND OF THE BASICS, AND I HOPE I DIDN’T CONFUSE YOU TOO MUCH WITH DETAILS THERE, BUT JUST KNOW THAT EACH STUDENT COMES WITH A CERTAIN AMOUNT OF MONEY, AND THAT’S WHY YOU SEE SO MANY DISTRICTS WHO ARE LOOKING TO ATTRACT STUDENTS FROM OTHER DISTRICTS THROUGH SCHOOL OF CHOICE, BECAUSE IT HELPS THEM CONTINUE TO MAINTAIN THE NUMBERS OF PROGRAMS AND THINGS THEY HAVE, BECAUSE WE SEE, AND WE’LL GET TO IT A LITTLE BIT LATER, WE SEE THAT DISTRICTS OVERALL ARE CONTINUING TO DECLINE IN ENROLLMENT AS THE MAIN POPULATION OF MICHIGAN SCHOOL AGE CHILDREN IS DECLINING, AND SO I THINK NOW I’M GOING TO TURN IT OVER TO BOB TO TAKE THE NEXT PIECE OF THIS STORY WE’RE GOING TO TELL YOU.>>I FIGURE I’D GET A WORD IN EDGEWISE AT SOME POINT. THANKS FOR HAVING US TODAY. WE APPRECIATE NOT ONLY THE TIME, BUT THE OPPORTUNITY TO COME OUT AND DESCRIBE THE FUNDING SIDE OF SCHOOLS, WHICH SOMETIMES GET A LITTLE BIT CONFUSING. WE’RE GOING TO TALK ABOUT WHERE SCHOOLS RECEIVE THEIR FUNDING. WE’RE ALSO GOING TO TALK ABOUT WHERE THE STATE RECEIVES ITS FUNDING TO PROVIDE WHAT DAVID JUST EXPLAINED THROUGH THE FOUNDATION ALLOWANCE. SO WE’RE WILLING TO TAKE QUESTIONS AS WE GO THROUGH THIS, AND REALLY OUR GOAL IS THAT AT THE END OF THIS, THAT YOU HAVE A BETTER UNDERSTANDING OF WHEN YOU START HEARING ABOUT WHAT GOES ON DOWNTOWN OR MAYBE A COUPLE BUILDINGS AWAY FROM HERE, A LITTLE BIT MORE OF AN UNDERSTANDING ABOUT HOW THAT’S GOING TO IMPACT K-12s BACK IN YOUR AREA. SO WE’RE GOING TO START WITH UNDERSTANDING WHERE DO SCHOOLS GET THEIR FUNDING. THERE ARE FOUR MAIN AREAS, THREE OF WHICH ARE PROBABLY PRETTY FAMILIAR TO YOU. FEDERAL FUNDING IS WHAT I’LL CALL THE TOP TIER. THOSE ARE YOUR TITLE ONES, THERE MAY BE SOME SPECIAL EDUCATION DOLLARS. TITLE TWO, AND WHATEVER TITLES MIGHT BE OUT THERE FOR THE YEAR THROUGH THE GRANT PROGRAMS. THERE’S COMPETITIVE GRANTS FOR THAT. THERE’S ALSO NONCOMPETITIVE GRANTS. WHEN YOU LOOK AT A SCHOOL DISTRICT’S BUDGET, THE FEDERAL FUNDING GENERALLY HAS A LOT OF COMPLIANCE ISSUES THAT GO ALONG WITH IT, AND IT TYPICALLY IS NOT THE LARGEST AMOUNT IN THE BUDGET. IT IS A FAIR AMOUNT. MAYBE 10-15% OF THE BUDGET DEPENDING ON THE DISTRICT. HOWEVER, THE FEDERAL FUNDING, ALTHOUGH IT’S THERE AND WE CERTAINLY APPRECIATE IT, IT DOES COME WITH A LOT OF STRINGS. IT’S NOT REALLY FREE WILL MONEY WHERE YOU CAN USE, TYPICALLY FOR OPERATIONAL PURPOSES. IT IS A SPECIFIC DOLLAR AMOUNT TO BE SPENT ON CERTAIN THINGS SUCH AS TITLE ONE, OR SPECIAL EDUCATION. SO THEY ARE A TARGET MARKET, SO TO SPEAK FOR THOSE DOLLARS, AND THERE IS A LOT OF COMPLIANCE WITH THOSE, NOT ONLY FINANCIAL REPORTS, BUT ALSO ON THE EDUCATIONAL SIDE, PLENTY OF REPORTING THAT GOES ALONG WITH FEDERAL, SO THAT’S KIND OF THE TOP TIER OF FUNDING.>>DID YOU SAY WE CAN ASK QUESTIONS?>>SURE, GO AHEAD.>>SO I UNDERSTAND THAT THEY CAN’T USE IT FOR WHATEVER THEY WANT, BUT CAN THEY SUPPLANT MONEY? SO CAN THEY USE IT FOR SOMETHING THAT THEY WOULD HAVE USED OPERATIONAL MONEY FOR?>>THERE HAS BEEN– OVER THE LAST SEVERAL YEARS, THERE HAVE BEEN CHANGES TO THE SUPPLEMENT AND SUPPLANT LANGUAGE, AND AS A RESULT, IN SOME CASES, YES, YOU CAN. BUT I WOULDN’T TAKE THAT TOO FAR OUTSIDE THAT REALM BECAUSE TRULY, THESE ARE DOLLARS THAT ARE CENTERED FOR A SPECIFIC GROUPING OF INDIVIDUALS. SO WHETHER THIS WOULD BE AN AREA WHERE YOU COULD TAKE SOME OLD EXPENSE AND DUMP IT IN AND FEEL PRETTY GOOD ABOUT THAT, THERE HAVE BEEN CHANGES THERE. BUT THEY ARE PRETTY STRICT IN HOW YOU CAN DO IT. IT’S NOT AS FREE AS WE MIGHT THINK IT IS.>>10%, 20%?>>OH… I’M NOT– I’M NOT GOING TO MARK IT TO A PERCENTAGE BECAUSE HONESTLY, I’M NOT SURE. WELL, I WOULD SAY IT’S PROBABLY 10-15% AT MAX.>>I’D LIKE TO ADD TO THAT, BECAUSE THE LAST TIME WE TALKED ABOUT FEDERAL FUNDING, I THINK IT WAS LIKE A YEAR OR SO AGO. THERE ARE CERTAIN DISTRICTS THAT GET UPWARDS OF LIKE $3,500 PER PUPIL, AND IF THEY’RE MAXED OUT AT THE STATE, AND IT’S CLOSE TO $18,000 PER PUPIL THEY’RE GETTING, THAT’S MORE LIKE ALMOST 30%, SO I THINK THAT’S A BIG PART.>>DEFINITELY. WHEN WE MOVE INTO STATE FUNDING, THAT’S PROBABLY WHAT WE’RE MOST FAMILIAR WITH. THAT’S WHEN WE START TALKING ABOUT STUDENTS AND FOUNDATION ALLOWANCE, COUNT DAYS, AND REALLY THAT STATE FUNDING MODEL, WHICH WAS PUT IN UNDER PROPOSAL A HAS WORKED FAIRLY WELL OVER THE YEARS, GIVEN THAT WE ARE BEING PAID ON THE NUMBER OF STUDENTS THAT WE ARE SUPPORTING. I THINK THROUGH THE– THE LAST SEVERAL YEARS WE’VE SEEN SOME TYPES OF CHANGES BETWEEN THE COUNT DAYS. HOW MUCH ONE COUNT DAY IS WORTH VERSUS ANOTHER. WE KIND OF SETTLE THAT, AS YOU SEE IN THIS CHART HERE, THAT WE’RE USING 90% OF THE FALL COUNT, AND WE’RE USING 10% OF WHAT WE CALL THE SUPPLEMENTAL COUNT, WHICH IS EARLY IN THE YEAR. THE GOOD PART ABOUT THAT IS WHEN YOU GO INTO YOUR BUDGETARY TIME OF THE YEAR, SUCH AS NOW, YOU’LL GET THAT 10% OF THE FUNDING FOR NEXT YEAR. YOU ALREADY KNOW WHAT THAT IS. THE HARD PART IS, IN OCTOBER, YOU END UP SEEING THE REST OF IT, AND YOU’VE ALREADY MADE SIGNIFICANT PLANNING IN YOUR EDUCATIONAL PROGRAM, SO YOU’RE BEING FUNDED ALMOST A LITTLE BIT AFTER THE FACT THERE, SO NEEDLESS TO SAY, IT IS WHAT IT IS, AND IT DOES WORK, AND AS LONG AS IT’S BEEN CONSISTENT, WHICH IT HAS BEEN FOR THE LAST SEVERAL YEARS, SCHOOL DISTRICTS ARE ABLE TO HANDLE THAT, BUT YOU CERTAINLY CAN SEE IF YOU’RE IN A DECLINING ENROLLMENT DISTRICT, YOU CAN SEE HOW THIS WOULD HAVE SUCH AN IMPACT THAT YOU’RE EXPECTING SO MANY STUDENTS AND AT A LATER DATE YOU FIND OUT YOU HAVE LESS, AND YOU NEED TO MAKE THAT UP SOMEWHERE IN YOUR BUDGET. AND SO THAT IS A CHALLENGE, HOWEVER, I THINK WE’VE DONE A FAIRLY GOOD JOB OVER THE YEARS. THE STATE FISCAL YEAR VERSUS THE SCHOOL DISTRICT FISCAL YEAR ARE A LITTLE BIT DIFFERENT, AND THAT CREATES A CHALLENGE ON CASH FLOWS AND THE PAYMENTS THAT DISTRICTS RECEIVE FOR STATE AID. WE RECEIVED 11 PAYMENTS FOR STATE AID. AND SO NATURALLY, YOU’D SAY, WELL, THERE’S 12 MONTHS. MAYBE WE SHOULD GO TO 12 MONTHS. TRULY A SCHOOL DISTRICT’S EXPENDITURE PATTERN WOULD SUGGEST THAT MAYBE A LESSER NUMBER OF MONTHS, BUT EARLIER IN THE YEAR MIGHT BE A LITTLE BIT BETTER FOR CASH FLOW DUE TO THE FACT THAT WE HAVE A VARIETY OF EXPENDITURES EARLY IN THE SCHOOL YEAR, AND AS THE SCHOOL YEAR PROGRESSES, YOU KNOW, IN SOME CASES WE’LL CUT OFF, SO TO SPEAK, SPENDING EARLY IN THE SPRING SO WE CAN WRAP THINGS UP BY THE TIME THE FISCAL YEAR ENDS, SO 11 PAYMENTS, THAT’S WHAT WE GET. TWO OF THOSE PAYMENTS, HOWEVER, OCCUR AFTER THE FISCAL YEAR IS OVER. AND THE CHALLENGE WITH THAT IS THAT YOU STILL HAVE EXPENDITURES, AND THEN WE HAVE ONE MONTH THAT WE DON’T RECEIVE ANY CASH AT ALL. SO YOU MAY HEAR ABOUT YOUR LOCAL SCHOOL DISTRICT TALKING ABOUT A STATE AID NOTE OR A CASH FLOW NOTE, AND TRULY WHAT THAT IS IS THE FACT THAT WE’RE RECEIVING TWO MONTHS OF REVENUES, CASH REVENUES, AFTER OUR FISCAL YEAR, AND WE HAVE ONE MONTH WHERE WE ARE NOT COLLECTING SOME OF THOSE FUNDS BECAUSE WE ONLY HAVE 11 PAYMENTS, SO YOU DO SEE A DIP IN YOUR CASH FLOW, AND CERTAINLY WITH OUR MEMBERSHIP, THIS IS THE TIME OF YEAR RIGHT NOW WHERE YOU START PLANNING FOR THE FALL. SO IT IS A LITTLE BIT OF A CHALLENGE. IT’S CERTAINLY A CHALLENGE TO HAVE THE TWO FISCAL YEARS DIFFERENT FOR GRANT PURPOSES, AND JEEZ, WE’VE HAD A DISCUSSION JUST THIS WEEK ABOUT THIS. THE DIFFERENCES THAT WE RUN INTO ON THE ACCOUNTING SIDE BETWEEN HAVING A FISCAL YEAR AT JUNE 30, AND A STATE YEAR ON SEPTEMBER 30. TRADITIONALLY IT HASN’T BEEN AN ISSUE WE CAN’T GET AROUND, BUT IT ALWAYS ENDS UP BEING A QUESTION, ESPECIALLY WITH GRANT DOLLARS. CATEGORICALS–>>CONCERNING CASH FLOW, I WOULD IMAGINE IT’S BEEN SOMEWHAT EASIER THE LAST EIGHT YEARS WHEN THE BUDGET HAS BEEN APPROVED BEFORE JUNE. TO KIND OF FORECAST WHAT’S COMING IN.>>FROM A CASH FLOW PURPOSE–>>WELL, MAYBE NOT CASH FLOW, BUT–>>YEAH, NOT NECESSARILY CASH FLOW. HOWEVER, YES, YES, MUCH, MUCH BETTER TO HAVE A SOLID FOUNDATION GOING IN TO YOUR BOARD MEETING IN JUNE WITH A GOOD BUDGET. I REMEMBER YEARS WHERE WE WERE OUT IN OCTOBER, AND THINGS HAVE CHANGED A LITTLE BIT. WE HAVE SOME ACCOUNTING PROCEDURES THAT WE HAVE TO FOLLOW, WHICH TIGHTEN THAT UP ON OUR END WHEN WE DO OUR FISCAL YEAR AUDIT, AND CERTAINLY HAVING THAT INFORMATION EARLY IS BETTER, AND WE’RE HOPING THAT CONTINUES WITH THIS ADMINISTRATION AS WELL. GO AHEAD.>>JUST TO ADD TO THAT, YOU KNOW, IN SCHOOL DISTRICTS, THE WAY THEY OPERATE AND THE WAY FUNDING COMES AND THE TYPES OF EXPENDITURES THEY HAVE. WE LOOK AT THE STUDENT COUNT AND THE FOUNDATION ALLOWANCE IS A BIG PIECE OF REVENUE. YOU KNOW, FOR MOST DISTRICTS, THAT’S 80 PLUS PERCENT OF THE REVENUE THAT THEY ARE COUNTING FOR. NOT HAVING INFORMATION UNTIL, LET’S SAY, OCTOBER, IS DIFFICULT, BECAUSE YOU’VE GOT TO GUESS AS BEST YOU CAN OF WHAT YOUR STUDENT COUNT IS GOING TO BE. ON THE OTHER SIDE, THE EXPENDITURE SIDE, OVER 80% OF OUR EXPENDITURES ARE IN TOTAL COMPENSATION, SO WHERE YOUR TEACHER CONTRACT AND YOUR EMPLOYEE CONTRACTS ARE, WHERE YOUR HEALTH INSURANCE IS GOING TO COME IN AND THINGS LIKE THAT, ALL THOSE PIECES ARE PART OF THE PUZZLE A BUSINESS MANAGER HAS TO PUT TOGETHER TO HAVE THE BEST CHANCE OF HAVING A BUDGET THAT’S GOT TO BE PASSED IN JUNE THAT’S GOING TO SERVE THEM WELL, THAT DISTRICT WELL THROUGH THE REST OF THE SCHOOL YEAR. ONE OF THE REASONS WHY WE PROMOTE HAVING A SIGNIFICANT FUND BALANCE, SO WE USUALLY SAY 15-20% NOT SO REALISTIC THESE DAYS, BUT WE’VE SEEN A PUSH TOWARDS MORE DISTRICTS HAVING A LITTLE BIT BETTER FUND BALANCE, AND IT WAS REALLY GETTING KIND OF BAD THERE FOR A WHILE WHERE THERE WAS NO ROOM FOR A DISTRICT TO GET BAD NEWS ON A STUDENT COUNT AND BE OUT OF DEFICIT. SO AS WE’VE SEEN, WE KEPT TALKING ABOUT 5% OF FUND BALANCE IS THE NEW DEFICITS. LET’S PLAN TO NEVER GO BELOW 5%, WHICH IS HARD TO DO, AS YOU’RE CUTTING PROGRAMS TO KIDS THAT ARE IN YOUR CLASSROOM NOW, BUT IT’S ALWAYS IMPORTANT TO REMEMBER THAT, YOU KNOW, DISTRICTS HAVE TO PLAN FOR THE STUDENTS THAT THEY’RE GOING TO HAVE FIVE YEARS FROM NOW AND TEN YEARS FROM NOW AS WELL AS THE STUDENTS THEY’RE EDUCATING NOW, SO THAT YOU DON’T MORTGAGE THE FUTURE AND NOT BE ABLE TO SERVE THOSE STUDENTS AS WELL AS YOU’RE SERVING THE STUDENTS NOW, SO THAT WHOLE BUDGETING PROCESS AND HOW MUCH INFORMATION YOU HAVE, THE FUNDING AND HOW THE CASH FLOW GOES, REALLY FORCES DISTRICTS INTO HAVING A FUND BALANCE, OR IT’S NOT A SAVINGS PROGRAM, BUT IT’S A FUND BALANCE THAT ALLOWS A DISTRICT TO GO INTO THE NEW FISCAL YEAR WITH A LITTLE BIT OF CUSHION, SO IF YOU DON’T GET QUITE THE NUMBER OF STUDENTS YOU EXPECT, THERE’S SOME CUSHION SO YOU DON’T HAVE TO CHANGE YOUR EDUCATIONAL PROCESS AND THE PLANS YOU HAVE AND DO MID-YEAR CHANGES TO CLASSROOMS AND THINGS, WHICH CAN BE SO DISRUPTIVE, SO I KIND OF WENT OFF ON A TANGENT THERE.>>AND I THINK WE’LL PROBABLY DO THAT A COUPLE OF TIMES TODAY. VARIOUS– WHOOPS, I’M SORRY. GO AHEAD.>>JUST TO ASK A QUESTION. AND I’M SORRY, CAN YOU TELL ME AGAIN WHEN ARE THE TWO COUNT DAYS AND WHERE ARE THE PERCENTAGES? ARE THOSE THE TWO– OKAY.>>IN THE CHART, THERE’S STUDENT COUNT IN THE FALL, REPRESENTS 90% OF THE FUNDING.>>AND THAT’S IN OCTOBER, CORRECT?>>CORRECT. AND THE SUPPLEMENTAL ACCOUNT, WHICH IS GENERALLY IN FEBRUARY, IS THE 10%>>OKAY, SO THAT WAS THE ONE THAT PEOPLE WERE QUESTIONING WITH THE SNOW DAYS THIS TIME. AND MY– A QUESTION THAT I ALSO HAVE, BECAUSE I HEAR– I’VE HEARD DISTRICTS SAY THAT WITH THIS MUSICAL CHAIRS WITH CHARTER SCHOOLS THAT THERE ARE STUDENTS THAT LEAVE A SCHOOL DISTRICT, TYPICALLY A CHARTER SCHOOL, AND THEN THEY’RE GOING BACK TO THEIR HOME SCHOOL, AND IT’S AFTER THE COUNT. ARE THERE ANY– I MEAN, THEN THERE’S ONLY THAT– I WOULD ASSUME, AND THERE’S ONLY THAT 10% THAT THEY COULD GARNER FOR THAT CHILD.>>WELL, INTERESTINGLY ENOUGH, THERE WAS AN ATTEMPT TO FIX THAT, SO TO SPEAK. WE HAVE A SECTION OF SCHOOL AID NOW THAT IS 25E, AND 25E REPRESENTS JUST WHAT YOU DESCRIBED. A DISTRICT COUNTS A STUDENT AND TWO WEEKS LATER, THEY RETURN TO ANOTHER DISTRICT OR THEY JUST MOVE AND GO TO A DIFFERENT DISTRICT. THE RECEIVING DISTRICT NOW THROUGH 25E CAN RECEIVE PAYMENT FOR THE DAYS THAT THEY EDUCATE THAT STUDENT. SO IN THE OLD DAYS, YOU ARE EXACTLY RIGHT. THEY WOULD LOSE THAT FUNDING BECAUSE THEY WEREN’T THERE ON THE COUNT DATE. IN TODAY’S WORLD, THE LAST PROBABLY THREE YEARS, I THINK, THAT’S BEEN IN PLAY, 25E HAS ALLOWED THE DOLLARS TO FLOW OR FOLLOW THE STUDENT. AND SO THAT IS KIND OF A FIX THAT WAS OUT THERE. I THINK THAT FOR YEARS THERE WERE DISCUSSIONS. IT DID GO THROUGH AND IT WORKS, BUT I THINK WHAT YOU’RE FINDING STATEWIDE IS THAT, AND IF YOU LOOK A LITTLE BIT MORE REGIONALLY AT AN ISD LEVEL, YOU MAY FIND THAT IN AN ISD, THERE’S REALLY NOT A GREAT MONEY CHANGE BECAUSE OF THE NUMBER OF STUDENTS THAT ARE MOVING AMONGST THE DISTRICTS. OUTSIDE YOUR ISD, AND THERE’S PROBABLY A LITTLE BIT OF THAT HAPPENING, BUT REGIONALLY IT SEEMS AS THOUGH THE MONEY IS STAYING IN THE REGION, ALTHOUGH IT MAY GO BETWEEN DISTRICTS, BUT IT CERTAINLY DOES FOLLOW THE STUDENT NOW, WHICH IS WHAT I WOULD SAY MUCH BETTER THAN– THE ARGUMENT WAS, JEEZ, THEY WERE HERE FOR COUNT DAY AND NOW THEY’RE GONE. AND WE JUST GOT TEN MORE KIDS TO EDUCATE AND WE DON’T HAVE FUNDING. NOW IT’S NOT NECESSARILY THAT WAY ANYMORE.>>THANKS.>>YOU’RE WELCOME. SOME OTHER CATEGORICALS THAT I’M SURE YOU’RE FAMILIAR WITH, 31A AT RISK. AND ALSO MPSERS. NOW MPSERS COST OFFSET OVER THE LAST FEW YEARS, AND WE’LL SEE SOME CHARTS HERE IN A LITTLE BIT, HAS BECOME A MAJOR PIECE BEING FUNDED THROUGH SCHOOL AID FUND, AND A MAJOR PIECE OF EXPENDITURE AT A SCHOOL DISTRICT. AND SCHOOL DISTRICTS ARE NOW WHAT I’LL SAY, BROUGHT TO A LEVEL OF EXPENDITURE FOR THE UNFUNDED LIABILITIES IN THE RETIREMENT SYSTEM. SO WE’RE MAXED OR CAPPED AT A 20.96% PAYMENT FOR AN UNFUNDED LIABILITY.>>PAYMENT WAS?>>20.96. THAT IS THE LEVEL AT WHICH THE DISTRICT MUST PAY FOR THE UAL OR UNFUNDED LIABILITY. THERE IS A NORMAL COST ABOVE THAT THAT THE DISTRICT ALSO WILL USE FUNDING TO PAY DOWN. AND THEN ON TOP OF THAT, THERE’S THE STATE PORTION OF THE UNFUNDED LIABILITY, SO THE STATE NOW TAKES A PORTION OF THE RETIREMENT COST. THE INDIVIDUAL AND THE DISTRICT TAKE A PART, AND THEN THE DISTRICT TAKES A PART OF THIS UNFUNDED LIABILITY. WE’VE GOT A FEW CHARTS THAT MIGHT CLEAR IT UP FOR YOU. THE FACT OF THE MATTER, THOSE FUNDS ARE FLOWING INTO THE SCHOOL AID FUND TO THE DISTRICT, AND THEN BACK TO THE STATE, TO THE RETIREMENT SERVICES. GO AHEAD.>>SO MY UNDERSTANDING IS THAT THERE WAS A CHANGE IN HOW THAT WAS FUNDING. COULD YOU EXPLAIN THE HISTORY OF THE CHANGE AND WHY?>>THE FUNDING OF THE ACTUARIALLY, THE RETIREMENT SYSTEM ON AN ANNUAL BASIS WILL LOOK AT THE ASSUMPTIONS THAT ARE MADE IN THE SYSTEM, SO THERE’S AN ASSUMPTION THAT THE INVESTMENTS WILL EARN A CERTAIN DOLLAR AMOUNT OR A PERCENTAGE, AND DISTRICTS WILL PROVIDE ENOUGH OF THE PAYROLLS ON AN INCREASING OR DECREASING RATE TO OFFSET THE COSTS OF NOT ONLY THE RETIREES, BUT ALSO THOSE THAT ARE IN THE SYSTEM THAT WILL RETIRE SOMEDAY.>>SO ARE YOU SAYING– I’M WONDERING, BECAUSE MY UNDERSTANDING WAS THAT IT WASN’T– IT DIDN’T WORK THE WAY WITH THE DISTRICT. IT WOULD COME OUT OF THEIR GENERAL FUNDS.>>YES.>>IN THE PAST, IT WAS THE STATE THAT COVERED IT. I DON’T KNOW IF THERE WAS A CONSTITUTIONAL, YOU KNOW, REGULATORY REASON WHY, BUT THEN IT WAS SHIFTED TO THE DISTRICTS. I UNDERSTAND– THAT’S WHAT– I’M TRYING TO UNDERSTAND, AND ALSO THE– AND I UNDERSTAND THE INVESTMENT, BUT I ALSO KNOW THAT A NUMBER OF CHARTER SCHOOLS DO NOT HAVE TO CONTRIBUTE TO MPSERS WHICH I THINK MIGHT ALSO BE AFFECTING THIS. SO I WAS JUST LOOKING AT– AND YOU KNOW, THEY’RE NOT PAYING OUT THAT LIABILITY, SO WHAT– HOW DID IT GO BEFORE THAT? WHAT WAS THE PRACTICE BEFORE IT WAS SHIFTED TO THE DISTRICTS?>>YEP, I’M FOLLOWING YOU.>>OH, SORRY.>>I BELIEVE BEFORE PROPOSAL A– NOW UNFORTUNATELY, I WASN’T HERE BEFORE PROPOSAL A, BUT BEFORE PROPOSAL A, THERE WERE SOME COSTS OF FICA ON PAYROLL AS WELL AS THE RETIREMENT THAT YOU’RE SPEAKING OF, AND THOSE WERE COSTS THAT WERE BORN BY THE STATE. AFTER PROPOSAL A, THE DISTRICTS TOOK ON THE PORTION OF THE RETIREMENT SIDE AND THE FICA SIDE, AND THAT WAS BUILT IN TO THE FOUNDATION ALLOWANCES WHEN THAT WAS FIRST BROUGHT TO THE TABLE BACK IN PROP A. SO THE DISTRICTS ENDED UP TAKING ON A RESPONSIBILITY OF THE RETIREMENT COSTS AND FICA WERE FUNDED FOR IT. UP UNTIL ABOUT 3 YEARS, 4– YEAH, IT’S PROBABLY SEVERAL YEARS NOW, WHERE THE STATE CHANGED THE LAW REGARDING THE UNFUNDED LIABILITY, AND THAT’S WHERE WE ARE TODAY WITH A CAP ON IT AT THE DISTRICT LEVEL, BECAUSE IT WAS GROWING SO QUICKLY. SO EVERY YEAR YOU’D DO YOUR BUDGET, AND YOU’D SEE THAT MORE AND MORE OF YOUR DOLLARS WERE GOING TO PAY THE RETIREMENT COSTS SO THERE WAS A CAPPING OF THAT AT 20.96 FOR THE UAL. THE NORMAL COST OF HAVING EMPLOYEES AND ENSURING THAT THEY HAVE A RETIREMENT, THERE IS A COST FOR THAT, BUT THEN THE STATE DECIDED TO REALLY PUT THAT CAP ON AND PAY THE REST OF THE BILL, AND THOSE DOLLARS COME OFF THE TOP OF SCHOOL AID, SO BEFORE ANYTHING ELSE IS ALLOCATED OUT, THOSE COME OFF THE TOP. AS YOU SAY WITH THE CHARTER SCHOOL, THERE ARE SEVERAL THAT DO PARTICIPATE, BUT MANY DON’T, AND AS A RESULT OF THAT, ARE THEY REALLY RECEIVING A BENEFIT FROM THE DOLLARS THAT’S GOING TO MPSERS? MAYBE NOT AS MUCH AS IF IT WERE IN FOUNDATION, WHERE YOU WOULD HAVE A FOUNDATION ALLOWANCE INCREASE LET THE DISTRICTS DEAL WITH THE EXPENDITURE SIDE. SO THIS HAS PROBABLY BEEN WELCOMED FOR SCHOOL DISTRICTS MORE SO THAN NOT. BECAUSE NOW YOU CAN KIND OF PLAN FOR THAT BUDGET, THAT I KNOW I’M ONLY GOING UP TO 20.96. THE NORMAL COST IS ALWAYS SOMETHING THAT MAY CHANGE, BUT THE DOLLAR AMOUNT, AND WE’RE UPWARDS– THE LATEST PROJECTION HERE IS ALMOST 40% OF PAYROLL GOES TO RETIREMENT.>>I’M WONDERING IF THE EXPANSION OF CHARTER CYBERS WHERE THEY’RE NOT CONTRIBUTING INTO THIS FUND IS HELPING TO MAKE IT MORE COSTLY?>>WELL, IT CERTAINLY IS REDUCING THE NUMBER OF PAYROLLS THAT WE ARE ABLE TO SPREAD THE COST OF THE SYSTEM OVER. NO QUESTION ABOUT IT. THEY HAVE AN ASSUMPTION OF A CERTAIN LEVEL PAYROLLS WILL GROW FROM YEAR TO YEAR, AND THAT ASSUMPTION HAS BEEN REALLY UNDER PERFORMING, AND AS A RESULT, RATES GO UP FOR UNFUNDED LIABILITY. CORRECT. YEP.>>THE CHARTER EMPLOYEES DON’T GET PENSIONS, LIKE THE VAST MAJORITY OF AMERICANS THAT AREN’T GOVERNMENT WORKERS. ABOUT 13% OF PRIVATE SECTOR EMPLOYEES GET PENSION WHERE 90% OF GOVERNMENT. I MEAN THIS IS BIG. POLITICIANS MAKING PROMISES FOR THE FUTURE PEOPLE HAVE TO DEAL WITH.>>ON THAT NOTE, I’M THINKING THIS IS A REALLY HEAVY LIFT FOR YOUNG, WORKING CLASS FAMILIES. ESPECIALLY THAT HAVE NO FEDERAL FUNDING OR VERY LITTLE. AND THEN HAVE LOTS OF LOCAL FUNDING REQUIRED, BUT 40% OF WHAT THEY’RE GETTING IS ALREADY BEING TAKEN. IT’S A REALLY HEAVY LIFT.>>WELL, LET ME CLARIFY THE 40%. LET’S JUST CLARIFY THAT. A SCHOOL DISTRICT IS CAPPED AT 20.96 FOR A PORTION OF THE COST. THEY HAVE A NORMAL COST WHICH THE PROJECTIONS OF THE COMING YEAR ARE ABOUT 7.5% OR I’LL SAY 6, 6.5%. SO THE TOTAL DOLLAR AMOUNT THAT THE DISTRICT WOULD SPEND IS 27.5%. THE BILL IS 40% OR CLOSE TO IT. THE DIFFERENCE BETWEEN WHAT THE DISTRICT WILL PAY AND THE BILL IS WHAT’S COMING OFF THE TOP OF SCHOOL AID.>>AT THE BEGINNING OF THE YEAR?>>THAT’S CORRECT.>>THE STATE AID FUND.>>THAT IS CORRECT.>>THAT 20.96, IS THAT NEGOTIABLE FROM ONE YEAR TO THE NEXT? IS THIS SOMETHING THAT THE– OKAY, SO THIS IS JUST–>>THE LEGISLATURE SET THAT.>>AND THEY COULD TECHNICALLY RESET IT IF THEY THOUGHT THEY NEEDED TO TYPE OF THING?>>MOST PEOPLE I KNOW AT CHARTER SCHOOLS WOULD JUMP AT THE CHANCE TO GO TO A– GET A REGULAR JOB WHERE THERE’S A PENSION. WE’RE HAVING A REAL TEACHER SHORTAGE AND A PROBLEM ATTRACTING TEACHERS BECAUSE– IT’S SUPPLY AND DEMAND, SO IF YOU WANT TO GET TEACHERS, YOU PROVIDE THEM WITH BENEFITS AND PENSION. THOUGH MOST PEOPLE DON’T HAVE THAT. I DON’T THINK EVERYBODY SHOULD BE– I MEAN, IF EVERYBODY JUMPED OFF A BRIDGE, WOULD YOU? YOU KNOW, I MEAN, JUST BECAUSE WHAT’S GOING, IT DOESN’T NECESSARILY MEAN IT’S THE BEST WAY TO BE. TEACHERS DESERVE TO HAVE THE DIGNITY OF A PENSION AFTER WORKING IN A CLASSROOM FOR 30 YEARS, AND IT’S NOT A LOT OF MONEY THAT THEY GET. SO THAT’S– I’LL STOP TALKING ABOUT PENSION.>>WE PROBABLY SHOULD MOVE ON FROM THE PENSION TOPIC, BECAUSE WE COULD SPEND OUR WHOLE TIME ON THAT.>>YEAH, THIS COULD BE ANOTHER VISIT.>>ALTHOUGH, MARILYN, WE NEED TO–>>YEAH, WE LOST OUR COMPUTER HERE, MARILYN. I THINK YOU HAVE THE SLIDES, THOUGH, DON’T YOU?>>YES, WE HAVE THE SLIDES.>>OKAY, WE’LL CONTINUE. SO NOW WE MOVE TO THE LOCAL FUNDING, AND THE LOCAL FUNDING MIGHT BE A LITTLE BIT MORE FAMILIAR AS WELL. WE HAVE PROPERTY TAXES. THERE’S ALSO SOMETHING THAT WE’RE STARTING TO SEE AGAIN CALLED INTEREST REVENUE. ANY– THANK YOU.>>THANK YOU.>>YEAH. ANY TYPES OF INVESTMENTS THAT THE DISTRICT MAY HAVE THE ABILITY TO MAKE, NOW WE’RE SEEING MAYBE SOME MORE INTEREST OR DIVIDENDS TO BE MADE THROUGHOUT THE YEAR. WHICH IS GOOD, BUT MANY TIMES THOSE ARE PRETTY SMALL IN COMPARISON TO THE DISTRICT’S OVERALL BUDGET. THE PROPERTY TAXES THAT WE’RE REFERRING TO HERE IS THAT 18 MILL LEVY. WE’RE GOING TO WALK THROUGH HOW THE STATE CALCULATES A FOUNDATIONAL ALLOWANCE HERE IN A MINUTE, BUT THESE ARE DOLLARS THAT ARE COMING TO THE DISTRICT, NOT ON OUR HOMES, BUT ON OTHER– EITHER SECOND HOMES, OR OTHER NON-RESIDENTIAL PROPERTIES. SO THE INTERESTING THING IS WE VOTE AS TAXPAYERS FOR THE 18 MILL LEVY. HOWEVER, IT REALLY ISN’T ASSESSED ON OUR HOME. THIS IS ASSESSED ON EITHER BUSINESS PROPERTY OR WHAT THEY CALL NON-PRINCIPLE RESIDENT EXEMPT PROPERTY, NON PRE. SO IT’S INTERESTING THAT WE VOTE ON IT, HOWEVER, THIS IS A TAX REALLY FOR NON-RESIDENTIAL, AND IT’S CONFUSING AT TIMES, ESPECIALLY WHEN YOU GO OUT AND NEED TO RENEW YOUR 18 MILL LEVY, YOU HAVE TO HAVE A PRETTY GOOD CAMPAIGN TO HAVE FOLKS UNDERSTAND WHAT IT’S FOR, WHAT HAPPENS IF YOU DON’T RECEIVE IT, AND WHAT PROPERTIES ARE ASSESSED. AND IF YOU DON’T RECEIVE– IF YOU WERE TO GO OUT FOR YOUR MILLAGE, AND YOU DON’T RECEIVE IT AND YOUR TAXPAYERS SAY NO, WE DON’T WANT THAT, THE STATE OF MICHIGAN STILL DEDUCTS THAT FROM YOUR FOUNDATIONAL ALLOWANCE, SO YOU WOULD LOSE, ESSENTIALLY, FUNDING IF YOU DIDN’T HAVE THAT 18 MILL LEVY. YOU’LL HEAR OF SOME DISTRICTS BEING ROLLED BACK OR HEAVILY ROLLED BACK, AND WE’RE NOT GOING TO GET INTO THAT, NECESSARILY, TODAY, BUT IT DISALLOWS YOU FROM LEVYING THAT TOP 18 MILLS. IT’S SOMETHING LESS. THERE’S A VARIABLE THERE. IF IT’S BELOW 18 MILLS, YOU MAY LOSE FUNDING AT YOUR DISTRICT, AND GENERALLY IT’S NOT A LOT, BUT IT’S ENOUGH TO MAKE YOU THINK TWICE ABOUT HAVING TO GO BACK OUT FOR THE FULL 18 MILLS. BUT THOSE ALL COME IN ON LOCAL FUNDING STREAMS FROM YOUR LOCAL TAX COLLECTING AGENCY, WHETHER IT’S A TOWNSHIP OR THE COUNTY, OR A CITY, AND THOSE COME IN SPORADICALLY THROUGHOUT THE YEAR, DEPENDING ON WHEN YOU’RE GOING TO HAVE YOUR TAXES, WHETHER IT’S A SUMMER TAX OR A WINTER TAX, AND SO WHERE DOES THIS LEAD? IT LEADS US TO CASH FLOW. IF YOU’RE RECEIVING IT IN THE SUMMERTIME, THEN THERE’S A CHANCE THAT BY THE TIME YOU HAVE A LOW POINT IN CASH, MAYBE THAT’S MADE UP SOME OF THAT LOW POINT BECAUSE YOU HAVE HIGH PROPERTY VALUES. IF YOU’RE DECEMBER COLLECTION, YOU’LL RECEIVE THOSE SOME TIME AFTER THE FIRST OF THE YEAR, AND ONCE AGAIN, YOU HAVE TO KNOW WHEN THAT CASH IS COMING IN AND HAVE A PRETTY GOOD SENSE OF HOW THAT IS GOING TO REFLECT ON YOUR EXPENDITURE PATTERN. SO THE LOCAL SIDE, ALTHOUGH AS TAXPAYERS, WE DON’T NECESSARILY PAY THAT. WE CERTAINLY HAVE THE RIGHT TO PASS THAT OR NOT PASS THAT, AND IT HAS A MAJOR IMPACT ON THE FUNDING AT YOUR DISTRICT, ESPECIALLY IF YOU DON’T PASS THAT. LOCAL FUNDING OUTSIDE OF THESE AREAS, THERE’S REALLY NOT A WHOLE LOT ELSE THAT IS AVAILABLE.>>I HAVE A FEW QUESTIONS.>>YEP, GO AHEAD.>>UNDER OTHER LOCAL, I KNOW YOU SAID THERE’S NOT REALLY A WHOLE LOT, BUT WHAT WOULD THEY LOOK LIKE OR SOUND LIKE?>>IT COULD BE A LOCAL GRANT, YOU KNOW, FROM–>>LIKE A FOUNDATION.>>A FOUNDATION, OR KIWANIS, WHATEVER KIND OF COMMUNITY. IT COULD BE A BUSINESS THAT’S GIVING A GRANT TO THE DISTRICT FOR A SPECIFIC PURPOSE. A LOT OF TIMES THOSE ARE OTHER– OTHER LOCAL KIND OF REVENUES.>>I’VE ALSO NOTICED THAT THERE’S IN VARIOUS DISTRICTS AROUND THE STATE LEVYING FOR TRANSPORTATION, TECHNOLOGY, SPECIAL EDUCATION. DO YOU KNOW ANYTHING ABOUT WHETHER OR NOT THOSE DOLLARS ARE TRACKED IN REAL TIME AND CAN ESSENTIALLY BE FOIAED OR JUST SO THAT THERE’S SOME TRANSPARENCY TO THE LOCAL FUNDING AND WHAT IT’S PRECISELY USED FOR GIVEN THE FACT THAT IT WAS LEVIED FOR THAT PARTICULAR THING. IF THAT MAKES SENSE.>>WELL, THERE ARE ENHANCEMENT MILLS WHERE A COUNTY CAN GET TOGETHER AND VOTE IN ADDITIONAL MILLS THAT ARE RESTRICTED BY THE NUMBER OF YEARS OF THE LEVY, AND THE AMOUNT OF MILLS THAT YOU COULD LEVY. AND THOSE SOMETIMES ARE DONE ON A COMMUNITY BASIS OF SAYING WE’RE GOING TO USE THIS FOR TECHNOLOGY, OR WE’RE GOING TO USE THIS FOR TRANSPORTATION LIKE YOU SAID, BUT THAT’S A COUNTY WIDE KIND OF THING. THERE’S REALLY– I MEAN, THERE’S A RECREATIONAL MILLAGE THAT SCHOOLS CAN GET INTO, TOO, BUT FOR THE MOST PART, THERE’S NO OTHER OPERATIONAL WAY FOR A DISTRICT TO RAISE THOSE FUNDS. PROPOSAL A BASICALLY LIMITS SCHOOLS FROM LEVYING FOR OPERATIONAL MILLAGES OVER THE AMOUNT THEY GET AS PART OF THE FOUNDATIONAL ALLOWANCE, EXCEPT FOR THE ENHANCEMENT MILL AND THE RECREATIONAL MILLAGE.>>SO THERE IS OR ISN’T AN ABILITY TO TRACK THOSE DOLLARS FOR TRANSPARENCY, OR ARE YOU JUST NOT PART OF THAT AND NOT AWARE OF IT?>>GENERALLY IF THERE’S A RESTRICTION ON THE FUNDS AND HOW THEY CAN BE SPENT, THEN THEY CAN BE TRACKED SEPARATELY. BUT IF IT’S– IF THEY’RE UNRESTRICTED FUNDS LIKE THE FOUNDATION ALLOWANCE, THEN THEY WOULD JUST GO INTO THE POOL OF FUNDING AVAILABLE TO A DISTRICT THAT THEY BUDGET OUT.>>SO THEY MAY OR MAY NOT BE USED FOR THE EXPRESS PURPOSE THAT IT WAS LEVIED?>>WELL, IF THERE WAS AN EXPRESS PURPOSE, THEN IT WOULD BE USED FOR THAT PURPOSE AND THEY TRACK IT.>>[ INDISTINCT ] DEMONSTRATE THAT.>>YEAH, LET ME GO FOR A COUPLE OF THOSE LEVIES THAT I THINK I HEARD. SPECIAL ED.>>I’VE HEARD OF, AND I THINK WE TALKED ABOUT THIS IN DETROIT WHEN WE WERE THERE, I’VE HEARD ABOUT– WE HAD SOMETHING SIMILAR TO THIS. WE TALKED ABOUT TRANSPORTATION, SPECIAL ED, AND TECHNOLOGY. SO I’M NOT EVEN HEARING THAT WITHIN WHAT YOU’RE SAYING, THAT THERE’S RESTRICTIONS. BECAUSE IT SEEMS LIKE THERE’S NOT A WHOLE LOT OF RESTRICTION FOR WHAT YOU CAN GO FOR LOCALLY.>>WHEN YOU HAVE A BALLOT QUESTION GOING TO THE ELECTORS AND, YOU KNOW, THE COMMUNITY, THAT BALLOT LANGUAGE WILL PROVIDE THOSE RESTRICTIONS. SO EACH COUNTY THAT PUTS ONE OF THESE OUT WORKS WITH THEIR ATTORNEYS AND WITH THEIR DISTRICTS OF HOW THEY WANT TO SELL THAT– THAT PARTICULAR ELECTION, YOU KNOW, OR THE BALLOT QUESTION AND BECAUSE THEY MAY GET BETTER SUPPORT IF IT’S RESTRICTED FOR A PARTICULAR PURPOSE. IF THE BALLOT LANGUAGE IS RESTRICTED, THEN THE DISTRICT HAS TO KEEP THOSE FUNDS RESTRICTED, SIMILAR TO A BOND ISSUE THAT THEY MIGHT PASS. THERE’S RESTRICTED FUNDS FOR THAT, FOR THE COLLECTION OF THE DEBT MONIES TO PAY, AND THOSE ARE RESTRICTED, AND KEPT IN SEPARATE ACCOUNTS, AND ACCOUNTED FOR SEPARATELY.>>THEY ARE DEFINITELY– EACH ONE OF THOSE MILLAGES IS– GOES THROUGH THE AUDIT PROCESS EVERY YEAR.>>OH, OKAY.>>SO IF YOU’RE IN AN INTERMEDIATE SCHOOL DISTRICT, FOR EXAMPLE, YOU HAVE A SPECIAL ED, A VOC ED, AND MAYBE OPERATIONAL. ALL THOSE ARE SEPARATE, AND THROUGH THE AUDIT PROCESS, ALL OF THOSE ARE– NOW, A REAL TIME WHERE YOU AND I COULD GET ON AND SEE WHAT ONE DISTRICT HAD AT A POINT IN TIME, PROBABLY NOT NECESSARILY, BECAUSE THAT WOULD BE IN THEIR ACCOUNTING SYSTEM. FROM A– FROM A COUNTY TOWNSHIP CITY TO THE DISTRICT, I DON’T THINK THERE’S GOING TO BE THAT MUCH OF A CONNECTION. I’M NOT FAMILIAR WITH ANY SYSTEM THAT WOULD DO WHAT YOU’RE ASKING. HOWEVER, ON A FISCAL YEAR BASIS, ALL THAT GOES THROUGH THE AUDIT PROCESS. ONE OF THE BIGGEST CHALLENGES, THROUGHOUT THE YEAR, AND AT THE END OF THE YEAR IS RECONCILING YOUR PROPERTY TAXES. NOT ONLY TO UNDERSTAND THE EXPENSE SIDE, BUT TO BE SURE THAT THE LEVIES THAT YOU PUT IN PLACE, YOU ACTUALLY RECEIVE THOSE FUNDS FROM THE LOCAL ASSESSORS. OR THE– YES. AND THAT IS PROBABLY ONE OF THE BIGGER CHALLENGES OF A SCHOOL FINANCE DIRECTOR, IS MAKING SURE, ESPECIALLY WHEN YOU’RE DEALING WITH MULTIPLE TOWNSHIPS OR ENTITIES COLLECTING, YOU’RE RECONCILING EVERY ONE OF THOSE, AND TYPICALLY, THAT’S AN ONGOING THING THROUGHOUT THE YEAR, BUT AT THE END, THOSE ARE ALL AUDITED AND SO I’D FEEL PRETTY COMFORTABLE ABOUT SAYING, IF YOU’RE OUT ON A MILLAGE, ESPECIALLY, WHEN WE’RE TALKING ABOUT GENERAL FUND, THAT TENDS TO GO IN THE GENERAL FUND THROUGH FOUNDATION, BUT IF YOU’RE GOING OUT FOR A MILLAGE, SPECIFICALLY, THOSE DOLLARS, WITH THE EXCEPTION OPERATIONAL, DEFINITELY NAILED DOWN EVERY YEAR. GO AHEAD.>>AND THEY WOULD BE SUBJECT TO FOIA, AND WE COULD JUST FOIA THE [ AUDIO DROPS ]>>THROUGH TRANSPARENCY REPORTING YOU CAN PULL THE AUDIT RIGHT OFF THE DISTRICT’S WEBSITE, AS WELL AS A LOT OF OTHER INFORMATION.>>AND I JUST HAD A– SO WE JUST– MY UNDERSTANDING IS THAT DISTRICTS CAN DO MILLAGE [ INDISTINCT ] FOR INFRASTRUCTURE OR BUILDING REPAIR, OR WHATEVER THAT–>>IT’S CALLED A SINKING FUND, OR BUILDING AND SITE SINKING FUND.>>OKAY, SO THAT WOULD BE AT THE DISTRICT LEVEL.>>YES.>>AND I DON’T KNOW WHAT ELSE AT THE DISTRICT LEVEL– IS THERE ANY OTHER–>>THAT WOULD BE OPERATIONAL. THAT WOULD BE FOR MAJOR CAPITAL KINDS OF THINGS. SPECIFIC PURPOSE.>>SO THEY CAN DO MILLAGES LOCALLY PER CAPITAL. WHICH WOULD INCLUDE TECHNOLOGY?>>ON A BOND ISSUE, YOU MAY BE USING THE PROCEEDS OF A BOND ISSUE OR INDEBTEDNESS FOR TRANSPORTATION AND TECHNOLOGY THAT YOU WOULDN’T SEE A MILLAGE ON A BILL THAT SAYS “TECHNOLOGY.” IT WOULD SAY INDEBTEDNESS.>>SO IT’D JUST BE ON CAPITAL.>>YES.>>AND THEN EVERYTHING ELSE, WOULD THAT BE ON THE ISD LEVEL FOR SPECIAL ED AND ENHANCEMENT FUNDS, WHATEVER THEY ARE.>>CORRECT.>>ALL RIGHT, THANK YOU.>>I THINK TIMING-WISE, WE REALLY NEED TO–>>YEAH, WE’RE GOING TO–>>WE PROBABLY SHOULD REFRAIN FROM QUESTIONS, MAYBE, UNTIL WE GET TO THE END TO MAKE SURE THERE’S TIME.>>YEAH.>>THE GOOD PART IS, WE GOT THROUGH THE BULK OF HOW WE’RE FUNDED AT THE LOCAL LEVEL. OTHER FUNDING SOURCES, THERE ARE DOLLARS THAT DO FLOW FROM INTERMEDIATE SCHOOL DISTRICTS TO THE LOCAL SCHOOL DISTRICTS. OR EVEN PSAs IN CASES, SO THERE ARE OTHER AREAS OF REVENUES, HOWEVER, I WOULDN’T SUGGEST THAT THEY’RE A HUGE PART OF YOUR LOCAL SCHOOL DISTRICT BUDGET.>>OKAY, I’M TAKING BACK THE REIGNS.>>GO AHEAD.>>A LOT OF GOOD QUESTIONS.>>I KNOW, I KNOW. BUT IN SOME OF THE THINGS WE’RE GOING TO TALK ABOUT, WE ALREADY KIND OF GOT INTO, SO IT MAY MOVE THIS A LITTLE QUICKER, BUT KIND OF– KIND OF GOING BACK TO UNDERSTAND THE FUNDING ITSELF, I MEAN, WE TALKED ABOUT THE STATE AID IS GIVEN DIRECTLY TO DISTRICTS. WE TALKED ABOUT THERE BEING 11 PAYMENTS. WE TALKED ABOUT THERE BEING LOCAL TAXES AND HOW THOSE ARE COLLECTED, SO I THINK WE CAN ZOOM THROUGH SOME OF THIS. YOU KNOW, WE– I THINK WE TALKED ABOUT OUR PRINCIPLE RESIDENTS EXEMPT STUFF. I THINK WE’RE GOING TO KEEP MOVING HERE. REMEMBER THAT STATE AID MEMBERSHIPS, THOUGH, WHEN WE CALCULATE– YOU KNOW, WE CALL IT FTE, BUT IT’S FULL TIME EQUIVALENCE. SO WHEN WE TALK ABOUT THE NUMBER OF STUDENTS AND THE AMOUNT OF THEIR FOUNDATION ALLOWANCE AND MULTIPLYING THAT, WE’RE TALKING ABOUT THE– IT’S NOT A HEAD COUNT, IT’S A FULL TIME EQUIVALENCE, SO IF SOMEONE’S IN YOUR DISTRICT FOR HALF THE TIME BECAUSE THEY’RE– MAYBE THEY’RE DOING SOME HOME SCHOOLING, BUT THEY GET SOME CLASSES AT THE DISTRICT, THEY CAN BE HALF TIME. THEY’RE COUNTED FOR HOW MUCH THEIR TIME THEY’RE IN THE DISTRICT ITSELF, SO MAYBE A HALF TIME STUDENT. SO IT’S NOT JUST A NUMBER OF STUDENTS THAT ARE PHYSICALLY IN YOUR BUILDING, BUT IT DOES DEPEND ON HOW MUCH THEY’RE ACTUALLY ATTENDING THAT THOSE DAYS, SO WE CALL IT A FULL TIME EQUIVALENCY. WE TALKED ABOUT THE MILLAGES. I THINK WE’RE GOING TO CONTINUE ON, AND I’M JUST GOING TO SLIDE IT BACK TO YOU.>>YEAH, WE’RE GOING TO MAKE UP TIME, AND I’M GOING TO FIGURE OUT WHY THIS COMPUTER IS DOING WHAT IT’S DOING HERE. SORRY, MARILYN, I’M GOING TO HAVE TO GO OFF THE SHEETS RIGHT HERE.>>IS IT FROZEN?>>YEAH, I THINK IT JUST FROZE.>>IT’S NOT ADVANCING.>>OKAY, YOU’RE GOING TO SEE IN YOUR PACKET, THERE IS A– THIS IS CALLED THE STATE AID FINANCIAL STATUS REPORT, AND THIS IS WHAT THE DISTRICT WILL RECEIVE ON A MONTHLY BASIS WITH THEIR INDIVIDUAL PAYMENT, SO THESE ARE AVAILABLE ONLINE. SOME AREAS THAT ARE HIGHLIGHTED WITH THE ARROWS ARE THE FOUNDATION ALLOWANCE, ANOTHER AREA IS THE ASSUMED LOCAL REVENUES, AND THE OTHER AREA ON THE RIGHT SIDE IS THE STUDENT COUNT. AND THIS IS A VERY HIGH LEVEL WAY OF HOW WE FIGURE OUT HOW MANY DOLLARS FOR FOUNDATION ALLOWANCE A DISTRICT RECEIVES. SO I’LL FLIP YOU OVER TO THE CALCULATION PAGE. WE TAKE THE DISTRICT’S FOUNDATIONAL ALLOWANCE. THANK YOU. OOPS, GUESS NOT.>>IT LIKES YOU, MARILYN.>>WE TAKE THE DISTRICT’S FOUNDATIONAL ALLOWANCE. WE HAVE THE 18 MILL LEVY. THERE IS A SIX MILL LEVY ON CERTAIN PROPERTIES. THE BLENDED STUDENT COUNT WHICH IS THAT TOP NUMBER. HOW MANY STUDENTS ON A FULL TIME EQUIVALENT BASIS YOU HAVE. WE COME UP WITH THE CALCULATION. BASICALLY, IT’S STUDENTS TIMES FOUNDATIONS EQUALS FOUNDATION ALLOWANCE. SO IF YOU COME DOWN JUST A LITTLE BIT TO THE NON PRE, YOU CAN SEE WE’RE GOING TO USE SOME OF THE TAXABLE VALUES, AND WE’RE GOING TO COMP– MAKE A COMPUTATION OF HOW MUCH OF THAT FOUNDATION, HOW MUCH OF THIS $37 MILLION IN THIS CASE, WILL COME FROM OUR LOCAL REVENUES THROUGH OUR 18 MILL LEVY VERSUS FROM THE STATE OF MICHIGAN, SO YOU CAN SEE THE CALCULATIONS HERE. THERE’S AN 18 MILL LEVY ON $436 MILLION THAT WILL DRIVE $7.8 MILLION IN LOCAL FUNDS. THE OTHER AREA, WHICH IS ANOTHER MILLAGE AT SIX MILLS, WHICH IS SPECIFIC PROPERTY WILL BRING IN NEARLY 300,000. SO IN TOTAL, IN THIS SCENARIO, THIS DISTRICT WILL BRING IN $8 MILLION OF THEIR FOUNDATION, LOCALLY, AND THAT’S SPREAD OVER THE AMOUNT OF MONTHS IT TAKES TO COLLECT, WHETHER THEY’RE A JULY OR A DECEMBER TAX COLLECTION. SO IF YOU TAKE THE STATE AID FUNDING TOTAL DOLLAR AMOUNT OF $37 MILLION, THAT’S YOUR STUDENTS TIMES FOUNDATION, SUBTRACT OFF YOUR LOCAL REVENUES THAT YOU’LL RECEIVE DIRECTLY FROM THE LOCAL PROPERTY COLLECTORS, TAX COLLECTORS, YOU’LL SEE THE LEFTOVER OF $28 MILLION IS WHAT THE STATE OF MICHIGAN THROUGH THE STATE AID FUND IS RESPONSIBLE FOR PAYING THAT DISTRICT, SO THERE’S A DIVIDE BETWEEN WHERE YOU GET THE FUNDS. HOWEVER, THE FUNDS ARE ALL DETERMINED BASED ON FOUNDATION TIMES NUMBER OF STUDENTS.>>I KNOW WE’RE NOT SUPPOSED TO ASK QUESTIONS, BUT I HAVEN’T ASKED ONE YET, SO… I’M GOING TO ASK. IS THERE ANY DISTRICT THAT DOES NOT HAVE THE 18 MILLS LEVIED?>>YES. I’M FAMILIAR WITH SOME THAT DON’T, HOWEVER I WOULD SAY THEY’RE OUT IN THE THUMB AND THEY’RE ONE ROOM SCHOOLHOUSES WITH TWO STUDENTS.>>OKAY.>>BUT IN BULK, I WOULD SAY THAT I’M NOT AWARE OF ANY OUTSIDE OF THOSE SCENARIOS.>>WHY DO WE VOTE ON THIS? IF EVERYONE’S PAYING IT, I MEAN, ALL THE NON HOMESTEAD IS PAYING IT ANYWAY, WHY DO WE HAVE TO KEEP BEING ASKED TO VOTE ON IT, LIKE, EVERY FEW YEARS? WHY DOESN’T THE STATE JUST LEVY 18 MILLS ON NON HOMESTEAD PROPERTY AND CALL IT A DAY?>>WELL, BACK WHEN PROPOSAL A STARTED, THERE WASN’T ENOUGH ROOM FOR THE STATE TO TAKE ON THAT ADDITIONAL TAX WITH THE HEADLEE REQUIREMENTS AND THINGS. AND SO THAT WAS A PIECE THAT HAD TO BE DONE BY THE LOCALS. NOW THERE’S A BIG SPREAD OF LIKE BILLIONS AND BILLIONS OF DOLLARS THAT WE’RE NOT LEVYING AS PART OF WHAT WE COULD AS PART OF THE HEADLEE RESTRICTIONS, BUT THAT’S COME UP FROM TIME TO TIME BUT THERE HAS NOT BEEN A WILLINGNESS TO MAKE THAT CHANGE.>>WELL, MAYBE, JOSH, YOU CAN TAKE THAT BACK TO THE GOVERNOR’S OFFICE. THANK YOU, JOSH.>>IT WOULD BE NICE TO GET LOCAL SCHOOL DISTRICTS OUT OF THE BUSINESS OF THE TAX COLLECTION SIDE, BECAUSE QUITE HONESTLY IT IS A VERY BIG RECONCILIATION PIECE.>>THANK YOU.>>OKAY, WE’RE GOING TO KEEP MOVING. NOW WE’RE GOING TO TALK ABOUT WHERE DOES THE STATE RECEIVE THE FUNDING THAT THE STATE PASSES ON TO DISTRICTS THROUGH THEIR STATE AID, AND THESE YOU MAY OR MAY NOT BE FAMILIAR WITH, BUT THIS IS A LISTING OF THE INDIVIDUAL TAXES THAT PROVIDE REVENUES FOR THE SCHOOL AID FUND. YOU CAN SEE SALES TAX, INDIVIDUAL INCOME TAX, AND STATE EDUCATION TAX TYPICALLY ARE THE LARGEST OF THE GROUPING. YOU CAN SEE THERE’S SOME LOTTERY TRANSFER, USE TAX, TOBACCO TAX, REAL ESTATE TRANSFER, CASINO AND OTHER. SO THE BULK OF OUR REVENUES IN THE SCHOOL AID FUND COME FROM ECONOMIC FACTORS WHEN THEY’RE GOOD, THINGS ARE GOOD. WHEN THEY AREN’T SO GOOD, WELL, UNFORTUNATELY, THE SCHOOL AID FUND SUFFERS A LITTLE BIT. THE NEXT PAGE, I THINK, HAS A LITTLE BIT MORE OF A BREAKDOWN HERE. AND WHAT WE’LL HEAR EVERY YEAR, IT SEEMS AS THOUGH WE LOOK AT THE INDIVIDUAL TAXES AND HOW MUCH IS COMING TO SCHOOL AID VERSUS GENERAL FUND, AND THERE’S ALWAYS SOME DISCUSSION ABOUT THIS. PROBABLY ONE THAT GETS VERY CONFUSED AT TIMES IS LOTTERY. DOES THE MICHIGAN LOTTERY PAY FOR SCHOOLS? THE ANSWER IS YES, IT DOES, TO THE EXTENT THAT THEY HAVE THE EARNINGS. THEIR EARNINGS, THEIR NET, COMES THE SCHOOL AID FUND. IT’S ABOUT 7% OF OUR BUDGET, AND WE CERTAINLY APPRECIATE IT. HOWEVER, IT DOESN’T FUND ALL OF SCHOOLS, BECAUSE WE’RE A LOT BIGGER FUND THAN JUST LOTTERY, BUT IT’S ONE THAT GETS A LITTLE BIT CONFUSED, BUT PLEASE, KEEP PLAYING LOTTERY. YOU’LL SEE THE NEXT CHART HERE BREAKS IT DOWN. MAY BE A LITTLE BIT EASIER TO UNDERSTAND WITH A PIE CHART. THE ONE ON THE LEFT IS GOING TO REPRESENT THE FULL GENERAL FUND, AND WE’VE ARROWED THE AREA THAT COMES TO SCHOOL AID. THROUGH PROPOSAL A, THERE’S A DOLLAR AMOUNT THAT COMES THROUGH, REALLY, A CONTRIBUTION FROM THE GENERAL FUND TO THE SCHOOL AID FUND, AND IT VARIES BASED ON THE INDIVIDUAL YEAR, AND IT REALLY TENDS TO BE A BALANCER OR A BALANCING ACT BETWEEN THE FUNDS, SO IN THIS SLIDE YOU’LL SEE ABOUT $60 MILLION THAT’S COMING OVER THAT MAY HAVE BEEN ADJUSTED BY A SUPPLEMENTAL. MIGHT BE A LITTLE BIT MORE THAN THAT, BUT YOU CAN SEE IT’S ABOUT 1% OF THE GENERAL FUND AND WHEN IT DOES COME IN TO OUR SCHOOL AID FUND, ONCE AGAIN, IT’S THERE. BUT IT’S NOT A HUGE AMOUNT OF MONEY FOR US. ON THE RIGHT SIDE, YOU’RE GOING TO SEE WHAT WE ARE REPRESENTING OF THE ENTIRE STATE BUDGET. SO THE SCHOOL AID FUND, YOU’RE GOING TO SEE IN THAT LIGHT GREEN SQUARE, IS ABOUT 28% OF THE TOTAL STATE BUDGET, SO IT JUST GIVES YOU A LITTLE PERSPECTIVE ON WHERE WE STAND. WHEN WE START LOOKING AT OUR SPECIFIC FUND, THE SCHOOL AID FUND ITSELF, YOU’LL SEE THE INCOME TAX, SALES TAX, AND THE STATE EDUCATION TAX ARE THE BIGGEST BULK OF OUR REVENUES. WE CAN SEE LOTTERY THERE AT 7%. THE STATE EDUCATION TAX, OUR TAXES THAT WE DO PAY ON OUR HOMES, THOSE GO DIRECTLY FROM OUR HOME TO THE STATE OF MICHIGAN, AND THAT DOES SUPPORT SCHOOLS. THAT IS THE PART THAT WE PAY. EXCUSE ME. ON THE RIGHT HAND SIDE, YOU’RE GOING TO SEE A CHART THAT SHOWS HOW WE SPEND OUR MONEY AND WHERE THE DOLLARS GO. FOUNDATION ALLOWANCE IS THE BIG ONE. WE’VE TALKED A LITTLE BIT ABOUT THAT. NUMBER OF STUDENTS TIMES YOUR FOUNDATION ALLOWANCE. YOU CAN SEE THE BULK OF THE EXPENSE OVER HALF IS– GOES OUT IN FOUNDATIONS. YOU CAN SEE SPECIAL EDUCATION COSTS. YOU CAN ALSO SEE FEDERAL PROGRAMS COST. BUT THE ONE THAT WE’VE ARROWED IS MPSERS, AND MPSERS IS WHAT WE’VE TALKED ABOUT ALREADY WITH THE CAPPING AT 20.96, AND THEN THERE’S ANOTHER BILL THAT GOES UP TO 40%. THOSE DOLLARS ARE COMING DIRECTLY OUT OF SCHOOL AID, AND ARE BEING PASSED THROUGH THE DISTRICTS AS A REVENUE AND AN EXPENSE, SO THERE’S A NET– THERE’S NO NET CHANGE TO THE DISTRICT’S FINANCIALS, OTHER THAN BOTH THE REVENUE AND EXPENDITURES HAVE BEEN INFLATED SOMEWHAT. THAT GOES DIRECTLY TO THE STATE OF MICHIGAN AND THAT PAYS DOWN THE BULK OF THAT UNFUNDED LIABILITY.>>COLLEGES AND UNIVERSITIES, IS THAT “OTHER PROGRAMS?”>>WE’RE GOING TO GET TO THAT, BUT YES. COLLEGES AND UNIVERSITIES ALSO HAVE A SHARE OF FUNDING THROUGH THE SCHOOL AID FUND, AND I THINK AT THE END, WE HAVE, UNDER THE PRESSURES, WE’LL TALK QUICKLY ABOUT THAT.>>BUT IT’S NOT IN THIS PIE. IT’S NOT IN THIS PIE?>>IN THIS ONE, IT PROB– IT WOULD BE IN THE OTHER BECAUSE OF THE AMOUNT.>>OKAY.>>OKAY, LET ME GET DOWN TO THE NEXT– WHEN YOU LOOK AT THE SCHOOL AID FUND AND THE HISTORY OF THE OVERALL REVENUES, AND THAT WOULD BE ON THE LEFT SIDE, YOU CAN SEE THAT SOME OF THE CLAIMS THAT WE’VE HEARD IN THE LAST SEVERAL YEARS ABOUT MORE MONEY IS BEING PUT INTO SCHOOL AID THAN EVER BEFORE, AND THE ANSWER TO THAT IS, THAT’S CORRECT ON A DOLLAR FOR DOLLAR, THERE’S NO QUESTION ABOUT THAT. I THINK THERE’S SOME DEBATE WHETHER OR NOT DISTRICTS ACTUALLY HAVE THE OPERATIONAL FUNDING AT THE LEVELS THAT YOU WOULD EXPECT WITH THE STATEMENT. THERE’S MORE MONEY IN SCHOOL AID THAN EVER. NUMBER ONE REASON IS BECAUSE OF THE MPSERS AND BUYING DOWN THAT RATE. THAT’S A BILLION TWO THAT IS BEING USED IN SCHOOL AID FOR THAT PURPOSE. IN OTHER WORDS, NOT FOR OPERATIONAL EXPENDITURES AT THE SCHOOL DISTRICT. ON THE RIGHT HAND SIDE, YOU’RE GOING TO SEE A BAR GRAPH THAT REPRESENTS THE GENERAL FUNDS CONTRIBUTION TO SCHOOL AID. AS I SAID A FEW MINUTES AGO, IT’S KIND OF A BALANCING ACT BETWEEN THE TWO FUNDS, BUT YOU CAN SEE BACK WHEN PROPOSAL A STARTED ON THE LEFT, SIGNIFICANT AMOUNT OF MONEY. IT WAS $660 MILLION WAS TRANSFERRED ACROSS FROM GENERAL FUND TO SCHOOL AID. OVER THE YEARS, YOU CAN SEE IT’S GONE UP AND DOWN. THERE WAS A POINT IN 2007-8 WHERE WE WERE ALMOST OUT OF THE GENERAL FUND BUSINESS, SO TO SPEAK. THERE WAS $18 MILLION TRANSFERRED ACROSS. AS YOU GO DOWN THE LINE TO THE RIGHT, YOU’LL SEE THAT THERE HAS BEEN SPIKES IN THAT FUNDING, AND TYPICALLY THAT’S WHEN WE STARTED FUNDING COMMUNITY COLLEGES AND UNIVERSITIES. SO THERE WAS AN EXPENSE GIVEN TO US THROUGH THE GENERAL FUND, AND THERE WAS ALSO SOME REVENUE TO HELP OFFSET THAT, ALTHOUGH, REALLY, IN THE SCHEME OF THINGS, THE SCHOOL AID FUND HAS BEEN REALLY SUBSIDIZING THE GENERAL FUND TO A GREAT EXTENT FOR UNIVERSITIES AND COMMUNITY COLLEGES OVER THE LAST SEVERAL YEARS. THE NEXT SLIDE WILL REFLECT MAYBE SOME OF THE DIFFERENCES THAT WE’VE SEEN NOT ONLY IN THE LOTTERY DOLLARS, BUT ALSO IN THAT GENERAL FUND TRANSFER. AND THE BLUE LINE REPRESENTS LOTTERY REVENUES COMING TO SCHOOL AID. AND YOU CAN SEE THAT THOSE HAVE GROWN OVER THE YEARS, WHICH I GUESS WE WOULD EXPECT TO HAPPEN WITH THE LOTTERY, AND THE GAMES. YOU CAN SEE THE ORANGE LINE REPRESENTS THE GENERAL FUND TRANSFER. SO YOU CAN SEE HOW IT’S– IT KIND OF HAS AN INVERSE RELATIONSHIP BETWEEN THE AMOUNTS. AT THE END OF THE DAY, DO WE HAVE MORE MONEY OR NOT? WELL, IF ONE REVENUE SOURCE IS GOING DOWN, AND ONE IS GOING UP, WE’RE PROBABLY SOMEWHERE IN THE MIDDLE, MEANING THAT IT REALLY IS IN ADDITIONAL DOLLARS AT THIS POINT. IT’S OFFSET SOME OF THE DOLLARS THAT ARE NO LONGER BEING TRANSFERRED. THERE IS A RIGHT– ON THE RIGHT SIDE, AN ARROW, THAT REPRESENTS WHERE HIGHER ED WAS REALLY, REALLY STARTING TO BECOME FUNDED THROUGH SCHOOL AID, AND YOU CAN SEE THE SPIKE IN THE GENERAL FUND TRANSFER. DIDN’T OFFSET THE WHOLE COST, BUT THERE WAS SOME THAT CAME ACROSS. THE FOUNDATION ALLOWANCE HISTORY, WHICH IS THE NEXT SLIDE, WE’VE TALKED A LITTLE BIT ABOUT THIS, AND YOU CAN SEE IT’S A CONSTANT UPWARD MOVEMENT AT TIMES, BUT WE DID TAKE A $470 REDUCTION AND FOUNDATION. THIS WAS WITHIN THE LAST NINE YEARS, AND THERE ARE MANY DISTRICTS WHO ARE, WHAT I WOULD CALL OUTSIDE THE MINIMUM WHO HAVE NOT REGAINED THOSE DOLLARS BACK. SO IF YOU WERE AT A MINIMUM FUNDED DISTRICT, YOU HAVE RECEIVED THE 470 BACK PLUS SOME, ABOUT $1,000 OR A LITTLE BIT MORE THAN THAT SINCE THAT CUT. IF YOU WERE AT THE STATE MAXIMUM, YOU STILL HAVEN’T RECEIVED THE 470 BACK, SO THERE’S A LITTLE BIT OF AN INEQUITY THERE IN HOW THE FUNDS HAVE COME BACK TO DISTRICTS, BUT THAT EQUITY DISCUSSION’S A DIFFERENT DAY. WHAT YOU CAN SEE, THOUGH, IS THERE WAS A MOVE TO REDUCE THE FOUNDATION ALLOWANCE SIGNIFICANTLY IN THE PAST TEN YEARS, AND DISTRICTS CERTAINLY TOOK MEASURES TO CONTINUE AS AN ENTITY AFTER THAT, WHICH IS WHEN WE SAW SOME OF THE REDUCTIONS IN THE DISTRICTS. GO AHEAD.>>THE NEXT SLIDE IS REALLY ANOTHER LOOK, I MEAN, GRAPHICALLY OF SOME OF THE THINGS WE’VE TALKED ABOUT AND THAT– IT SHOWS THE FOUNDATION ALLOWANCE THERE, AND IT ALSO SHOWS, THOUGH, AT THE TOP, WITH SOME OF THE BREAKOUTS IS HOW MUCH OF THAT IS SPENT ON RETIREMENT, AND THAT AMOUNT HAS INCREASED OVER TIME. AND YOU CAN SEE IN THE PURPLE IS THE AMOUNT THE DISTRICT IS PAYING TOWARDS RETIREMENT, AND THE VERY TOP IN THE ORANGE IS THE AMOUNT THAT’S COMING OFF THE TOP IN THE SCHOOL AID FUND. NEXT SLIDE IS KIND OF TALKING A LITTLE BIT MORE ABOUT EQUITY, WHICH WE TALKED ABOUT REALLY SHORT AMOUNT OF TIME AT THE BEGINNING, BUT THERE’S A CHART HERE ON THE LEFT THAT IS COMPARING EQUITY AMONG DISTRICTS. IT’S BASED ON ’17-18’S PUPIL DISTRIBUTION, AND IT’S A– IT BASICALLY IS THE NUMBER OF PUPILS, AND EACH ONE OF THESE CATEGORIES OR STRATA OF FUNDING, AND YOU CAN SEE THAT 63% OF THE STUDENTS ARE BEING IN DISTRICTS THAT ARE BEING FUNDED AT THE MINIMUM FOUNDATION ALLOWANCE. AND ONCE YOU GET ABOVE A COUPLE MORE STRATA THERE, YOU CAN SEE THAT THERE’S VERY FEW STUDENTS THAT ARE ACTUALLY IN DISTRICTS THAT HAVE MUCH MORE FOUNDATION ALLOWANCE IN THOSE AT THE MINIMUM, AND REALLY, THE MAX NOW IS SUCH A TIGHT PIECE THERE THAT YOU CAN SEE THOSE BOTTOM THREE LARGER LINES ARE WHERE MOST DISTRICTS ARE BEING FUNDED AT THIS POINT. WHEN WE STARTED PROPOSAL A, THERE WAS A… ABOUT A THREE TO ONE KIND OF DIFFERENCE BETWEEN THE FUNDING BETWEEN HIGHEST AND LOWEST DISTRICTS. NOW THAT IS MORE OF A THREE TO TWO, AND SO THAT HAS TIGHTENED UP, AND IT’S ALSO IMPORTANT TO RECOGNIZE BACK WHEN PROPOSAL A STARTED, THERE WAS A MINIMUM, A MAXIMUM FROM THE STATE, AND THEN THERE WAS THE HOLD HARMLESS DISTRICTS ON TOP OF THAT, BUT THERE WERE A NUMBER OF DISTRICTS AT THE BOTTOM THAT WERE WELL BELOW WHAT THE MINIMUM WAS AT THE START OF PROPOSAL A, SO THERE WAS SOME DISTRICTS THAT REALLY GOT A SHOT IN THE ARM OF ADDITIONAL FUNDING JUST WHEN PROPOSAL A STARTED IN ADDITION TO GETTING, YOU KNOW, TWICE AS MANY YEARS AS THE DISTRICTS AT THE TOP OF THE SCALE, TO KIND OF BRING THOSE STUDENTS UP. SO A LOT OF DISTRICTS DID VERY WELL UNDER PROPOSAL A. AND IT’S GETTING TO WHERE– WE’RE SO MUCH TIGHTER NOW. THERE’S LESS AND LESS OF THAT, BECAUSE THERE’S SO MANY PEOPLE– DISTRICTS AT THE MINIMUM, THAT WHEN YOU HAVE ADDITIONAL MONIES TO SPEND, THERE’S SO MANY THAT WHEN YOU DO THE 2X OR THE 1.5X OR WHATEVER WE END UP WITH THIS YEAR, THERE’S NOT AS MUCH OF A DIFFERENCE BETWEEN THOSE TWO ANYMORE. BUT IT’S DOWN TO ABOUT LESS THAN $600, LESS THAN $550, IS THE DIFFERENCE BETWEEN THE HIGHEST PAID AND THE LOWEST PAID THROUGH THE STATE. THERE’S STILL THE HOLD HARMLESS DISTRICTS ABOVE.>>THIS JUST APPLIES TO THE PER PUPIL STATE AID FUND.>>I’M SORRY?>>THIS JUST APPLIES TO THE PER PUPIL STATE AID FUND.>>YES. AS WE TALKED ABOUT EARLIER, TOO, WE’VE KIND OF HAD THE ISSUE OF DECLINING BIRTH RATES IN MICHIGAN. WE ALSO HAVE HAD AN EXODUS OVER THE YEARS OF PEOPLE LEAVING FOR WORK OUTSIDE OF THE STATE OF MICHIGAN, AND SO WE’VE SEEN THE NUMBER OF STUDENTS THAT WE’RE EDUCATING IN MICHIGAN GO DOWN OVER TIME. WE SEE THAT CONTINUING AND ACTUALLY ACCELERATING A LITTLE BIT IN THE NEAR TERM AS THE DEMOGRAPHERS HAVE BEEN REPORTING TO US, AND TO MANY OTHER PEOPLE. WE STILL SEE THE PUBLIC SCHOOL ACADEMIES ARE ESTIMATED TO INCREASE OVER THE NEXT COUPLE YEARS, THIS YEAR AND NEXT YEAR. BUT ALSO, THAT SCHOOLS ARE GOING TO BE DECLINING SOMEWHERE BETWEEN 6,300 AND 5,500 STUDENTS OVERALL. I USED TO ALWAYS WANT TO THINK ABOUT THIS AS THE ECHO OF THE BABY BOOM. YOU KNOW WE HAD A YEAR, A SET OF TIME, WHERE WE JUST WENT UP, AND NOW WE’RE ON THE DOWNWARD END OF THAT. HOPEFULLY, THAT’LL TURN AROUND AGAIN HERE IN THE FUTURE AND WE’LL BE BUILDING BACK UP WITH THE ECHO, MAYBE. BUT YOU KNOW, WE JUST KNOW THAT THERE’S– FAMILIES ARE HAVING FEWER CHILDREN, AND THERE’S FEWER– THEY’RE DOING THEM LATER IN LIFE. THEY’RE HAVING THEIR CHILDREN LATER IN LIFE. SO WE’VE SEEN THE DECLINE, AND THAT’S AFFECTING SCHOOLS. OVER, I’D SAY, ABOUT 75% OF DISTRICTS ARE IN DECLINING ENROLLMENT. SO THEY MIGHT BE GETTING, MAYBE, NOT EVEN AN INFLATIONARY INCREASE IN THEIR FOUNDATION ALLOWANCE, BUT DISTRICTS ARE HAVING TO MAKE REDUCTIONS FROM THE FACTS THAT THEY ARE HAVING FEWER STUDENTS THAN IN THEIR PRIOR YEAR. AND IT’S HARD FOR A DISTRICT AS WELL– IF YOU’RE DOWN, LET’S SAY, 50 KIDS THROUGHOUT YOUR K-12 SET OF GRADES, YOU MIGHT HAVE 5 KIDS OUT OF FIFTH GRADE OR SOMETHING LIKE THAT, AND YOU CAN’T REALLY REDUCE A CLASSROOM FOR FIVE CHILDREN. AND WHAT IT’S MEANING IS THAT DISTRICTS ARE REALLY TIGHT ON FUNDING ARE HAVING TO DO THAT. THEY’RE CUTTING A SECTION AND RAISING THE CLASS SIZES IN MANY OF THESE GRADES, AND SO THE DECLINING ENROLLMENT WITH MONEY TIED TO THE NUMBER OF KIDS YOU HAVE REALLY FORCES DISTRICTS TO MAKE DIFFICULT DECISIONS AS WE ALL HAVE BEEN AWARE OVER THE YEARS. BUT IT ACCELERATES THE FACT THAT WHEN WE TAKE A LOOK AT SCHOOL FUNDING OVER TIME, WE HAVEN’T BEEN KEEPING UP WITH INFLATION, BUT ON TOP OF THAT, DISTRICTS ARE HAVING FEWER STUDENTS, SO THEY’RE SEEING EITHER THEIR FUNDING ACTUALLY GO DOWN OR THAT THEIR INFLATIONARY TYPE INCREASES ARE ACTUALLY LESS THAN THAT. KIND OF THE WHOLE POLITICAL THING WHEN YOU HAD REPUBLICANS TALKING ABOUT THE FACT THAT FUNDING IS GOING UP AND IT’S AT RECORD NUMBERS, AND THE DEMOCRATS WERE SAYING THAT SCHOOLS WERE CUTTING, AND SO IT’S A COMBINATION OF THINGS. BOTH PARTIES ARE CORRECT. IT’S JUST GOTTEN TIGHTER, AND THE WAY THE SCHOOLS ARE FUNDED, MEANING THAT AS YOU HAVE LESS KIDS, YOU’RE GETTING LESS MONEY. BUT THERE ARE SOME DISTRICTS THAT ARE GROWING, AND THOSE DISTRICTS ARE DOING WELL FUNDING WISE BECAUSE AS THEY ADD 50 KIDS AND THEY MAY OR MAY NOT BE HAVING A CLASSROOM FOR THAT, OR THEY’RE ADDING ONE INSTEAD OF TWO, THEN THEY’RE ACTUALLY ABLE TO HAVE MORE MONEY TO IMPLEMENT OTHER KINDS OF PROGRAMS AND THINGS. IT’S THE OPPOSITE SIDE OF THE COIN WHEN EVERYTHING’S GOING DOWN THAT YOU’RE HAVING TO CUT PROGRAMS IN ORDER TO MAKE THINGS BALANCE. AS WE TAKE A LOOK AT SOME OF THE FUNDING PRESSURES SCHOOLS HAVE RIGHT NOW, WE SPENT A LOT OF TIME TALKING ABOUT MANY THINGS, BUT ONE OF THOSE WAS RETIREMENT AND IT TRULY IS A REALLY BIG DRAG ON THE AMOUNT OF THE FUNDS WE HAVE PRESENTLY TO EDUCATE KIDS. THOSE EXTRA FUNDS GOING TO RETIREMENT REALLY ARE PULLING DOWN THE ABILITY FOR SCHOOLS TO ADD PROGRAMS TO THEIR EDUCATING STUDENTS. AND IN THIS KIND OF GRAPH YOU CAN SEE ON THE LEFT HAND SIDE HOW MUCH OF THE SCHOOL FUNDING FROM STATE FUNDS IS GOING TO THE MPSERS PROGRAM FOR RETIREMENT. IT’S THE BLUE AT THE TOP.. YOU CAN SEE THAT’S GROWING EVERY YEAR. IT’S OVER– WELL, IT SAYS NOW IT’S PROBABLY AT $1.2 BILLION OR OVER $1.2 BILLION. BUT ON THE RIGHT HAND SIDE, THERE’S A LITTLE BIT OF A GRAPH THERE THAT TALKS ABOUT– AS BOB TALKED ABOUT, THE GAP BETWEEN NORMAL COSTS AND THE 20.96. THAT LOWER IN GREEN, AND I KNOW YOU DON’T HAVE COLOR, BUT IT’S THE EMPLOYER’S SHARE AFTER PUBLIC ACT 300 OF 2012. THE BLUE STRIPED IN THE MIDDLE IS THE AMOUNT THAT’S COMING FROM– OFF THE TOP OF THE SCHOOL AID FUND. AND SO YOU CAN KIND OF SEE HOW THOSE LOOK THERE. BUT THAT ONLY GOES TO FISCAL YEAR 2020 AS AN ESTIMATE. THE NEXT PAGE KIND OF SHOWS A LITTLE BIT OF A DIFFERENT PICTURE, MAYBE FURTHER INTO THE FUTURE. YOU CAN SEE THAT THE AMOUNT THAT WE’RE SPENDING ON OUR PENSIONS IS WELL ABOVE 30% NOW, AND IT WILL CONTINUE FOR QUITE A FEW YEARS UNTIL POTENTIALLY 30– 2035, 2036. AND THAT’S BECAUSE THEY’RE BASICALLY PAYING OFF THIS DEBT OVER 20 YEARS, AND THEN EVERY YEAR WE PAY OFF ANOTHER YEAR, IT’S GETTING SHORTER AND SHORTER, BUT ONCE WE DO HIT THAT MODE OF SAYING THAT THIS IS FULLY– THIS UNFUNDED LIABILITY IS PAID OFF, THEN YOU CAN SEE WHERE INTO THE FUTURE, THERE’S A HUGE DROP IN THE AMOUNT OF FUNDS THAT ARE REQUIRED TO FUND THE RETIREMENT SYSTEM, THAT LOWER– YOU’VE GOT THE PENSION AND YOU’VE GOT RETIREE HEALTH, AND THEN TOTAL IN BLUE, AND THE BLUE’S ABOUT A LITTLE OVER 5%, WHICH IS NOT A BAD PERCENTAGE TO BE PAYING TOWARDS THE PENSION OF A– OF AN EMPLOYEE. ACTUALLY, IT’S PROBABLY PRETTY LOW COMPARED TO WHAT THE STATE IS PUTTING AWAY FOR THEIR EMPLOYEES. BUT IT IS– IT SHOWS WHERE THE RETIREMENT RATE CAN GO. NOW, THIS WHOLE UNFUNDED LIABILITY CAME ABOUT BECAUSE WE DIDN’T MEET THE EXPECTATIONS AND THE ASSUMPTIONS THAT WE HAD ON THE RETIREMENT SYSTEM, AND THAT HAPPENED BECAUSE THE STOCK MARKET, REDUCTIONS, AND THINGS LIKE THAT. BECAUSE WE WERE ALMOST, IN THE YEAR 2000, WE WERE ALMOST 100% FULLY FUNDED IN OUR PENSION. IT HAPPENED AFTER 9/11 WHEN MICHIGAN ACTUALLY WENT DOWN SO MUCH THAT THE INVESTMENTS DIDN’T DO WELL, AND AGAIN, IN 2008-9, WE SAW THAT HAPPEN AGAIN, AND THAT’S WHAT WE’RE– THAT’S WHAT WE’RE RECOVERING FROM. ONCE THOSE ARE PAID OFF, THE AMOUNT OF FUNDING GOING TOWARDS THAT SHOULD CHANGE SIGNIFICANTLY. BUT WHO KNOWS BETWEEN NOW AND THEN, BECAUSE LIKE WE SAID, THESE ARE ESTIMATES THAT– THEY’RE TELLING US HOW MUCH WE HAVE TO PAY AS DISTRICTS AS A PERCENT OF PAYROLL, AND THEN AT THE END OF THAT YEAR, WE FIGURE OUT WHETHER– WAS THAT ENOUGH? WAS THERE ENOUGH PAYROLLS THAT GOT PROCESSED TO PUT THE MONEY IN THAT THEY WERE EXPECTING OR NOT, SO EVEN THOUGH WE SAY THIS WILL BE DONE IN 2035-36, THERE COULD BE ANOTHER ISSUE WHERE WE HAVE ANOTHER DROP IN THE STOCK MARKET AND IT INCREASES THE UNDER FUNDING EVEN MORE. IT COULD BE THAT THE LEGISLATURE DECIDES TO LENGTHEN OUT, INSTEAD OF IT BEING, LIKE, 19, 18, 17 YEARS. THEY MAY TAKE IT TO 30 AGAIN OR 25, WHICH COULD LOWER THE AMOUNT WE PAY OVER TIME. BUT ALL THOSE THINGS CAN HAPPEN, AND SO THIS IS KIND OF A PICTURE OF WHERE THINGS WOULD BE IF EVERYTHING WORKS OUT EXACTLY LIKE ASSUMPTIONS SAY, SO DON’T HOLD US TO IT, BUT THERE IS, YOU KNOW, A SILVER LINING IN ALL THIS MONEY BEING PUT TOWARDS THIS. ONE IS THAT EVENTUALLY IT WILL GET PAID OFF, BUT MORE IMPORTANTLY, THE PROMISES WE’VE MADE TO THE EMPLOYEES FOR BOTH PENSION AND HEALTH WOULD BE FULLY TAKEN CARE OF FOR OUR RETIREES AND THE PEOPLE WHO ARE WORKING WHO WILL BECOME RETIRED. AN IMPORTANT FACT TO KEEP IN MIND IS THAT THE PENSION PART OF THE RETIREMENT SYSTEM IS CONSTITUTIONALLY GUARANTEED, BUT THE HEALTH INSURANCE PART OF THE PENSION IS NOT. SO THERE’S ALWAYS A CHANCE THAT THOSE BENEFITS COULD BE CHANGED OR ELIMINATED, BUT NO SINGLE DISTRICT COULD MAKE THAT CHANGE ON THEIR OWN BECAUSE THEY’RE ALL A PART OF A PROGRAM WHERE, WHILE WE PAY IT ALL IN, THE STATE LEGISLATURE CONTROLS THE BENEFITS AND THEY WOULD BE IN CONTROL OF HOW THIS ALL WORKS OUT. SO, I WILL SWITCH GEARS TO BOB HERE.>>OKAY, WE’RE IN THE HOME STRETCH.>>WE’VE GOT LIKE FIVE MINUTES LEFT.>>WE GOT A HARD STOP AT 11:30, SO I’M GOING TO MAKE THIS NEXT SLIDE PRETTY EASY. WHAT YOU’RE SEEING HERE IS SOMETHING THAT IS REFERRED TO AS A BALANCE SHEET, AND THIS IS AN ESTIMATE ON, LET’S JUST CALL IT A CHECKBOOK. AT THE TOP, AND I KNOW IT’S A LITTLE DIFFICULT TO SEE, EVEN FROM MY SEAT HERE, BUT WHAT WE’RE SEEING IS BEGINNING BALANCES COMING FORWARD, AND I’M GOING TO FOCUS ON THE MIDDLE COLUMN HERE. WE SEE 362 MILLION COMING FORWARD FROM THE PRIOR FISCAL YEAR, FROM ’17-18, WHICH MEANS THERE’S SOME MONIES LEFTOVER. IF WE FOLLOW IT ALL THE WAY DOWN TO THE BOTTOM, WE’RE GOING TO SEE THAT THE TOTAL ENDING BALANCE, THERE’S $187 MILLION LEFT, SO THAT MEANS THAT WE HAVEN’T OVERSPENT WHAT’S AVAILABLE, HOWEVER, THAT RED NUMBER THAT’S ABOVE THAT, THE CURRENT YEAR REVENUES AND EXPENDITURES, IT SHOWS THAT WE HAVE OVERSPENT WHAT WE HAVE COLLECTED IN THAT GIVEN YEAR. SO ONCE AGAIN, WE HAVE MONIES LEFTOVER FROM THE PRIOR YEAR, WE SPENT FUNDS. AT THE END OF THE DAY, WE DO HAVE DOLLARS LEFTOVER, BUT WE OVERSPEND THE REVENUES FROM THAT CURRENT YEAR. SO WE SEE A SCHOOL DISTRICT DOING THAT, AND WHAT DO WE SAY? OH, THEY’RE SPENDING DOWN FUND BALANCE. THEY HAVE A STRUCTURAL DEFICIT. SO THAT’S WHAT WE’RE LOOKING AT IN THIS SCENARIO FOR ’18-19. BUT YOU CAN SEE IN THE ’19-20, AND THIS WAS BASED ON THE CONSENSUS REVENUE ESTIMATING CONFERENCE, WHICH HAPPENED IN JANUARY AS A FRAME OF REFERENCE. BUT YOU CAN SEE THAT WE HAVE 186-7 MILLION COMING FORWARD, AND AT THE END, AT THE BOTTOM, THERE’S 263 MILLION LEFTOVER. THAT’S A GOOD SIGN, ESPECIALLY WHEN THAT CURRENT YEAR REVENUE OVER EXPENDITURES IS A NUMBER THAT IS NOT NEGATIVE, SO THAT MEANS THAT OUR REVENUE SOURCES ARE GENERATING ENOUGH REVENUES TO SUPPORT THE BUDGET THAT HAS BEEN DISPLAYED HERE, AND THE BUDGET, THAT COLUMN ON THE RIGHT IS A BUDGET THAT IS EVERYTHING THAT WE KNOW ABOUT THIS YEAR IN THE CURRENT SCHOOL YEAR, PLUS 147, THE RETIREMENT INCREASES THAT ARE NECESSARY TO KEEP DISTRICTS HARMLESS, AND WE STILL HAVE A LITTLE BIT OF MONEY LEFTOVER, SO THAT’S A GOOD THING BASED ON OUR REVENUE SOURCES. NOW, I WANT TO GET BACK TO MISS PUGH’S QUESTION EARLIER ABOUT HIGHER ED. YOU CAN SEE DOWN AT THE BOTTOM HERE, AND I’VE GOT SOME QUICK SLIDES COMING UP, THIS IS WHERE YOU WILL SEE THE DOLLAR AMOUNTS FOR HIGHER ED, BETWEEN COMMUNITY COLLEGE AND UNIVERSITIES, AND IT’S DOWN NEAR THE BOTTOM JUST AHEAD OF TOTAL EXPENDITURES. YOU CAN SEE THAT THE NUMBER HAS INCREASED. IT WAS 636 MILLION, THEN IT WENT TO 908 FOR THE CURRENT YEAR, AND THIS PROJECTION WAS 912. SO THOSE ARE SIGNIFICANT DOLLARS THAT ARE BEING USED OUT OF THE SCHOOL AID FUND TO FUND HIGHER ED THAT ARE NO LONGER AVAILABLE FOR K-12, PSA, OR ISD OPERATIONAL FUND.>>WHAT ARE THE PROGRAMS ASSOCIATED WITH THAT? IS IT DUAL ENROLLMENT AND STUFF LIKE THAT?>>WELL, DUAL ENROLLMENT, THE DISTRICTS ARE ACTUALLY BILLED FOR THEIR DUAL ENROLLMENT. SO JUST BECAUSE IT’S COMING OUT OF SCHOOL AID HERE FOR THEIR OPERATIONAL FUNDING, DISTRICTS STILL PAY A BILL TO THE COMMUNITY COLLEGE OR UNIVERSITY FOR DUAL ENROLLMENT. THAT DIDN’T– THAT DIDN’T NEGATE OUR EXPENDITURES.>>HUH.>>YEAH, THERE’S A LOT OF THIS.>>WE LIKE THE WAY YOU THINK.>>I LIKE THE WAY YOU’RE REACTING. LOOK AT THE NEXT COUPLE OF SLIDES, AND THEN WE’LL WRAP UP. THIS SHOWS THE SLIDE THAT MISS PUGH WAS ASKING FOR EARLIER– THE SCHOOL AID FUND AND THE PORTION OF THE SCHOOL AID FUND DEDICATED TO COMMUNITY COLLEGE AND HIGHER ED. YOU CAN SEE IT’S $908 MILLION FOR THIS YEAR. WE CAN LOOK AT THE TOTAL FUNDING, UNIVERSITY FUNDING. THERE IS STILL A BILLION DOLLARS IN OPERATIONAL FUNDING COMING OUT OF GENERAL FUND FOR UNIVERSITIES, SO THERE’S A SIGNIFICANT AMOUNT OF EXPENSE, IF YOU WILL, THAT IS IN GENERAL FUND FOR UNIVERSITIES, BUT COMMUNITY COLLEGES, THIS WILL BE THE SECOND YEAR IN A ROW THAT WE ARE FULLY FUNDING COMMUNITY COLLEGE STATE DOLLARS OUT OF SCHOOL AID FUND. SO IT’S A LITTLE CHANGE. YOU CAN SEE THE BLUE LINES ON THE LEFT SIDE OF BOTH OF THESE CHARTS REPRESENT GENERAL FUNDING, AND YOU CAN SEE THE OTHER COLORED LINES IN THE RIGHT SIDE ARE COMING FROM SCHOOL AID FUND. IN OTHER WORDS, USING DOLLARS OUT OF SCHOOL AID TO SUPPORT HIGHER EDUCATION COMMUNITY COLLEGE. THIS LAST CHART IS MAYBE THE MOST SHOCKING ONE OF ALL. IF YOU TAKE THE COMMUNITY COLLEGE REVENUES AND UNIVERSITY REVENUES FROM SCHOOL AID FUND, TOTAL THOSE, AND ON THE VERY RIGHT SIDE DIVIDE THAT BY THE NUMBER OF K-12 PUPILS, THIS REPRESENTS THE NUMBER OR THE DOLLAR AMOUNT PER PUPIL OF K-12 AND PSA PUPILS, THE DOLLAR AMOUNT PER PUPIL THAT IS GOING TO FUND HIGHER ED. SO FOR THE ’18-19 YEAR, IT’S $614. SO LET ME PUT THAT IN PERSPECTIVE. WHEN WE TALK ABOUT SCHOOL AID FUND AND THE INCREASE IN FOUNDATION ALLOWANCE, WE’VE RECEIVED $120-240 IN THE LAST COUPLE OF YEARS. AND AT $240 AT A MINIMUM, DISTRICTS WERE– “OH, GREAT, “WE’RE GETTING SOME FUNDING.” AND IT’S STARTING TO BE SIGNIFICANT, HOWEVER, WE’RE SENDING $908 MILLION OUT TO HIGHER ED, WHICH IS $614 A STUDENT, OUR STUDENTS. SO WE ARE HAPPY WITH 240, BUT THERE’S 16– I’M SORRY, 614 KIND OF GOING OUT THE BACK TO SUPPORT THESE OTHER AREAS OF THE GENERAL FUND. SO IT’S SOMETHING THAT WE TRACKED OVER THE LAST SEVERAL YEARS, AND YOU CAN SEE THE DOLLAR AMOUNTS THAT WE’RE TALKING PER PUPIL, AND IT’S SIGNIFICANT, AND I THINK THERE’S BEEN MAYBE SOME OFFERS THROUGH THE ADMINISTRATION’S LATEST BUDGET PROPOSAL THAT MAY CHANGE A LITTLE BIT ABOUT THAT. HOWEVER, IN TODAY’S WORLD, THIS IS WHAT WE’RE DEALING WITH, AND IT’S SIGNIFICANT DOLLARS. AND I’M DONE, WITH THE EXCEPTION OF QUESTIONS.>>PAM.>>SO I’M LOOKING AT THE CHART ON PAGE 31. YEAH. AND YOU TALK ABOUT THE PERCENTAGES OF SCHOOLS… IS THAT PAGE 31 OR 21? YEAH, I THINK IT’S PAGE 21, SO I’M LOOKING AT THE CHART ON THE LEFT, THE EQUITY AMONG DISTRICTS.>>YEP.>>AND I’M THINKING OF THE MOST– NOT THE MOST RECENT STUDY, BUT THE STUDY THAT WAS DONE JANUARY 2018, AND THAT PROPOSED BUDGET IS 11– FOR THE BASE, IS 1,150, CORRECT? SO WOULD THAT– AND I DON’T KNOW IF YOU CAN SPEAK TO THAT. DO YOU KNOW WHAT I’M SPEAKING OF? SO I’M COMPARING THE– OKAY, I’M LOOKING AT THE EQUITY AMONG DISTRICTS SLIDE AND THE PUPIL DISTRIBUTION, AND YOU’RE TALKING ABOUT WHAT THE BASE RIGHT HERE, WITH THE FOUNDATION ALLOWANCES AND HOW IT’S SPREAD AMONG THE DIFFERENT…>>ARE YOU LOOKING AT THAT SLIDE THERE?>>YES.>>SO YEAH, IT SHOWS YOU HOW MANY PUPILS, WHAT PERCENTAGE OF PUPILS ARE BEING FUNDED THROUGH– AT THOSE DIFFERENT LEVELS OF FUNDING, SO ONCE WE GET ABOVE THOSE FIRST THREE THOSE ARE ALL FUNDED WITH THE STATE FUNDS, PLUS WHAT THEY LOCALLY COLLECT, SO $11,000 IS ONE OF THOSE SCHOOLS THAT COULD BE A SMALL, ONE ROOM SCHOOLHOUSE, POTENTIALLY THAT’S– OR AN ISLAND SCHOOL OR SOMETHING THAT HAS A REALLY HIGH FOUNDATION ALLOWANCE BASED ON HOW MUCH THEY’RE COLLECTING. THEY PROBABLY HAVE A FORMULA, YOU KNOW.>>OKAY, AND I’M THINKING OF THE RECENT STUDY THAT PROPOSES THAT SCHOOLS SHOULD RECEIVE $11,500– I’M SORRY. $11,500.>>THE FINANCE RESEARCH COLLABORATIVE STUDY.>>YES, THANK YOU.>>THE SCHOOL FINANCE RESEARCH COLLABORATIVE?>>YES.>>AND SO I’M JUST LOOKING AT HOW WE’RE FALLING SHORT OF WHAT IS BEING PROPOSED THERE.>>YES.>>AND THAT’S NOT EVEN INCLUDING THE $117– I MEAN, THE DIFFERENTIATED FUNDING FOR THE TYPE OF STUDENTS THAT THEY’RE SEEING, AND I GUESS, JUST POINTING OUT, I MEAN, I GUESS I’M JUST BRINGING LIGHT TO THE PURPOSE OF THE GOVERNOR’S BUDGET AND SOME OF THE THINGS THAT ALL OF US HAVE ADVOCATED FOR, AND I’M LOOKING AT THAT $614 DOLLARS PER STUDENT THAT WE’RE LOSING. SO I GUESS WE’RE FALLING SHORT OF WHAT WE’RE HEARING IS BEING PROPOSED, OR WHAT WE’RE HEARING SHOULD BE RECEIVED BASED– FOR A BASELINE, LET ALONE IF THERE ARE THE OTHER– THE IMPOVERISHED OR SPECIAL EDUCATION STUDENTS. THEN I’M LOOKING AT THE AMOUNT OF MONEY THAT IS GOING TO THE COMMUNITY COLLEGE AND UNIVERSITIES, AND HOW MUCH WE COULD BE BRINGING IN, AND THEN I GUESS IF YOU COULD SPEAK TO WHY IS IT THAT THAT FUNDING IS COMING OUT OF THE– IF YOU COULD SPEAK TO IT, WHY IT’S COMING OUT OF THE SCHOOL AID FUND.>>WELL, THE SCHOOL FINANCE RESEARCH COLLABORATIVE, THE BASE FUNDING ON THAT WAS MORE IN THE $9,500 RANGE.>>I’M SORRY, 95, THANK YOU.>>AND THEN YOU ADD ON THE DIFFERENT PIECES TO THAT FOR EXTRA FUNDING. AND THAT’S BASED ON THE STUDY THAT BASICALLY– THAT TRIED TO GET TO WHAT IS NECESSARY FUNDING WISE TO MAKE SURE THAT EVERY STUDENT HAS A CHANCE TO BECOME– TO MEET STATE STANDARDS. SO WHICH IS– YOU KNOW, WHICH IS THIS OVER HERE, AND OVER HERE, WE HAVE THE HISTORICAL VERSION OF HOW WE’RE FUNDED, SO THERE’S NO CORRELATION BETWEEN THE TWO, NECESSARILY, BUT GOING FROM ONE TO THE OTHER IS NOT NECESSARILY GOING TO BE AN EASY RAMP, BUT IT’S NOT AS MUCH SO MUCH ABOUT TALKING ABOUT HOW MUCH MORE FUNDING WE NEED. IT’S ABOUT WHAT ARE THESE SERVICES THAT ARE NECESSARY TO HELP KIDS GET TO BE, YOU KNOW, UP TO STATE STANDARDS AS OPPOSED TO HOW MUCH MONEY WE’RE TRYING TO GET. IT’S MORE ABOUT WHAT KIND OF SERVICES DO WE NEED TO PROVIDE THAT WE ARE NO LONGER PROVIDING AS THE STATE HAS CONTINUED TO DECLINE ACADEMICALLY, AND IT’S– WE’RE NOT PROVIDING THE SAME SERVICES WE USED TO, AND SO THAT WHOLE STUDY IS TRYING TO GET OUT THERE THAT THE TYPES OF SERVICES THAT ARE NECESSARILY FOR KIDS TO BE ABLE– TO MAKE STATE STANDARDS, ESPECIALLY WITH THE DIFFERENT WAYS THEY’RE COMING TO OUR DISTRICTS AND THE ADDED NEEDS THAT THEY HAVE, AND WHETHER OR NOT UNIVERSITY FUNDING CAN BE PULLED OUT OF THE GENERAL FUND. YOU KNOW, OR PAID FROM A GENERAL FUND TOTALLY INSTEAD OF THE SCHOOL AID FUND, YOU KNOW, THAT’S FOR PEOPLE WHO GET PAID MORE THAN I DO, BUT IT’S– THOSE ARE POLICY DECISIONS ABOUT HOW YOU’RE GOING TO FUND DIFFERENT PARTS OF EDUCATION.>>MY QUESTION, I GUESS, THEN, IS WHY DID WE SEE– YOU SPEAKING TO WHY– I DON’T KNOW IF YOU SAW THE DIFFERENCES IN– I THOUGHT SOME– YEAH. WHERE YOU SHOW IT ON PAGE– OR SLIDE 19, OR PAGE 19. BUT YOU SHOWED WHERE THERE IS A DIFFERENCE. NOW, I’M LOOKING AT THE WRONG THING. I THOUGHT SOMEWHERE WE TALKED ABOUT THE DIFFERENCE BETWEEN THE AMOUNT THAT WAS COMING OUT OF THE SCHOOL AID FUND FOR COLLEGES AND UNIVERSITY. IS IT THAT ONE? YEAH. OH, THAT IS IT. SO PAGE 19, AND IT WAS 2012, AND THE DIFFERENCE– AND WHY IS IT– WHAT IS THE GAP THAT THIS IS FILLING? WHAT WOULD YOU SAY THAT THIS IS FROM?>>2012.>>NOT IF IT CAN OR CANNOT BE DONE, BUT WHAT HAS BEEN THE DIFFERENCES? WHY IS THE FUNDING COMING OUT–>>UNFORTUNATELY MINE AREN’T NUMBERED, SO I’M– WE’RE TRYING TO GET TO THE SAME SLIDE YOU’RE LOOKING AT. [ INDISTINCT CHATTER ]>>TOWARDS THE BACK OF THE PACKET, AND IT’S THE SLIDE THAT SHOWS WHERE THE FUNDING OF COMMUNITY COLLEGES IS COMING FROM THE STATE AID– [ INDISTINCT CHATTER ] THE ONE PRIOR TO THAT.>>THE ONE PRIOR TO THAT.>>THE THIRD TO THE LAST.>>THIS ONE.>>SO WHAT’S YOUR QUESTION?>>WHY ARE WE SEEING THIS LARGER– I CAN’T SEE WHAT COLOR. BLUE– THAT LIGHT BLUE AREA. WHY DID THAT GO FROM NONE IN 2011, TO 2018 IT GREW.>>THOSE ARE POLICY DECISIONS THAT HAVE MADE– BEEN MADE BY THE LEGISLATURE IN THE FUNDING OF HIGHER ED. THOSE ARE POLICY DECISIONS VERSUS REVENUE SOURCES. IT’S THE USE OF SCHOOL AID FUND REVENUES TO SUPPORT THAT PART OF THE STATE BUDGET.>>I MEAN, OUR LEGISLATIVE FRIENDS ARE COMING, BECAUSE I KNOW WE’RE CRUNCHED FOR TIME, BUT IT’S GOOD THAT THEY SEE THIS.>>CAN I JUST ADD TO THAT DISCUSSION ABOUT– I MEAN, DUAL ENROLLMENT IS NOT A NEGATIVE THING. I THINK IT’S A POSITIVE THING FOR STUDENTS TO HAVE ACCESS TO THE EDUCATIONAL LANDSCAPE ENVIRONMENT THAT WORKS FOR THEM OR THAT CHALLENGES THEM, BUT WHEN IT’S COMING FROM TWO DIFFERENT– I’M UNDERSTANDING WHY THIS IS PROBABLY SOMETHING THAT NEEDS TO BE WORKED OUT.>>I KNOW IN THE DAYS THAT I WAS WORKING IN A SCHOOL DISTRICT, DUAL ENROLLMENT WAS A POSITIVE, AND FROM THE DISTRICTS I TALKED TO, THEY STILL VIEW IT AS A POSITIVE AND FULLY SUPPORT–>>GOOD, BECAUSE I THINK THAT THAT COULD BE CHALLENGED.>>IT DOES TAKE SOME KIDS, AND SOME FUNDING GOES AWAY FROM THE DISTRICT TO THE COMMUNITY COLLEGE OR UNIVERSITY, WHICH THEY MAY OR MAY NOT BE ABLE TO ELIMINATE A TEACHER BECAUSE OF THAT. THERE’S JUST LESS PEOPLE IN SOME OF THE CLASSES AT THE HIGH SCHOOL, BUT I’VE NEVER SEEN WHERE A DISTRICT MAKES A DECISION TO KEEP A CHILD IN THE HIGH SCHOOL JUST BECAUSE THEY DON’T WANT TO PAY FOR THEM TO GO TO A DUAL ENROLLMENT PROGRAM. IT’S GENERALLY– I’VE SEEN BECAUSE THAT PARTICULAR DISTRICT DOESN’T HAVE THE CLASS THAT THE STUDENT WANTS TO TAKE. IT COULD BE FOREIGN LANGUAGE OR IT COULD BE A TYPE OF SCIENCE OR, YOU KNOW, MATH OR CODING, OR WHATEVER.>>NOW, I’M SORRY TO HAVE TO CUT OUR DISCUSSION OFF. IT HAS BEEN MOST INFORMATIVE AND ENLIGHTENING TO HAVE THE PRESENTATION TODAY, SO DAVE AND BOB, THANK YOU VERY MUCH FOR THIS VERY DETAILED AND COMPREHENSIVE UNDERSTANDING OF SCHOOL FINANCE, AND I’M SURE WE WILL BE REVISITING THIS TOPIC IN FUTURE BOARD MEETINGS, SO THANK YOU AGAIN FOR YOUR PRESENTATION TODAY. THANK YOU FOR YOUR RESPONSIVENESS IN ANSWERING OUR QUESTIONS. IT’S BEEN A GREAT PRESENTATION, AND WE APPRECIATE YOUR TIME, AND WE APPRECIATE SHARING YOUR EXPERTISE WITH US TODAY. SO THANK YOU.>>THANK YOU.>>WE ARE NOW GOING TO MOVE TO LUNCH WITH OUR LEGISLATORS. WE WILL BE IN THE UP CONFERENCE ROOM, WHICH IS ON THE LOWER LEVEL. SORRY, ON THE UL LEVEL. SO YOU WILL NEED TO TAKE THE ELEVATORS AND GO DOWN TO THE UL LEVEL. WHEN YOU EXIT THE ELEVATOR YOU WILL WALK TOWARD THE CAFETERIA, AND THE UP CONFERENCE ROOM WILL BE ON YOUR RIGHT HAND SIDE, AND WE’LL SEE YOU THERE MOMENTARILY.

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