Bill
HB 5617
Provides explicit, line-item FY2026-27 funding and inflation controls for Michigan’s 28 community colleges, including operations, ITEMS, and retirement costs.
HB 5617 (2025-2026) Michigan: Appropriations for Community Colleges for FY 2026-2027
Overview
- Purpose: To amend the state’s School Aid Act of 1979 (as amended by 2025 PA 15) to specify the FY 2026-2027 appropriations for Michigan’s 28 community colleges, including operating funding, specific program costs, retirement costs, and certain one-time or restricted payments. The bill also updates payment schedules and related administrative provisions.
Main Purpose and Intent
- Provide the targeted, line-item funding for community colleges for the fiscal year ending September 30, 2027, including operations, restricted revenues, and specific program costs.
- Align appropriation structures and reporting requirements with current fiscal conditions and policy priorities (e.g., tuition restraint, MPSERS retirement costs, andITEMS funding).
Key Provisions and Changes
1) Appropriations and Funding Sources
- Gross appropriation for community college operations: $493,032,100.00; adjusted gross appropriation remains $493,032,100.00.
- The entire appropriation (except certain items) is drawn from the state restricted revenues and the State School Aid Fund (SAF); no General Fund/GP money is designated for operations in this section.
- The annual total for community college operations (subsection 2) is $363,570,600.00 (with $100.00 shown as a placeholder/typo in the text and $363.57 million as the main base).
2) Individual College Allocations
- The bill enumerates explicit operating allocations for each of Michigan’s community colleges (e.g., Alpena, Bay de Noc, Delta, Grand Rapids, Henry Ford, Lansing, Macomb, Mott, Washtenaw, Wayne, etc.), detailing:
- Operations funding
- Performance funding (shown as $0.00 in most cases)
- North American Indian Tuition Waiver costs
- Totals are provided for each college and sum to the statewide operating total.
3) Retirement and Other Program Costs
- MPSERS (Michigan Public School Employee Retirement System) UAAL (Unfunded Actuarial Accrued Liability) state share: $89,500,000.00, with a decrease of $4.7 million proposed in the Executive and concurred by the House, bringing total to $84.8 million SAF.
- MPSERS Normal Cost Offset: $19,600,000.00, with a decrease of $1.25 million in SAF, bringing total to approximately $18.4 million SAF.
- North American Indian Tuition Waiver: $2,200,000.00 SAF (to be accrued to June 30, 2026).
4) One-Time and Infrastructure Funding
- ITEMS (Infrastructure, Technology, Equipment, Maintenance, and Safety): The bill adds ongoing ITEMS funding of $14,906,300.00 SAF, to be distributed to each college (minimum $1.0 million; remainder by 2024-25 FYES). This is in addition to base operations funding.
- A separate note references a previously one-time ITW-related funding, with adjustments in prior-year language.
5) Tuition and Reporting Requirements
- Tuition Restraint: Requires in-district tuition/fee increase restraint (2026-27 cap: greater of 4.0% or $199; 2027-28 cap proposal different in the bill but House version intends 4.0% or $199 for 2026-27).
- Reporting and transparency: Updates to reporting timelines and archiving requirements; requires posting of legislative directed spending lists and quarterly reporting by departments administering grants.
Payment and Timeline Details
- Section 206 outlines payout schedules: baseline 11 monthly installments (October 16, 2025/2026 onward) for most funds; Section 201(4)(b) funds (e.g., certain restricted payments) distributed quarterly (Nov, Feb, May, Aug) for FY 2026-27.
- Institutions accrue certain July/August payments to their respective fiscal year ends.
Impact and Affected Parties
- Affects all 28 Michigan community colleges by setting explicit operational budgets and laying groundwork for ITEMS funding.
- Impacts state retirement costs for community college employees (MPSERS UAAL and normal cost offsets).
- Influences tuition affordability through restraint requirements and potential performance funding eligibility.
- Increases the state’s oversight and reporting requirements for grant administration and data reporting.
Effective Date
- Payments and allocations are structured to begin and accrue for fiscal year 2025-2026 through 2026-27, following the schedule in the bill.
Compiled from official sources — confirm details with the bill’s official record.
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