WeVote
Log In

Bill

Bill

HB 4577

Appropriations: school aid; appropriations for K-12 school aid; provide for. Amends secs. 11 & 17b of 1979 PA 94 (MCL 388.1611 & 388.1617b).

2025-2026 Regular Session Introduced by Tim Kelly

The bill raises the per-pupil foundation to $10,025 and increases overall K–12 funding, while restructuring MPSERS support and adding targeted grants and one-time funds.

REFERRED TO COMMITTEE ON APPROPRIATIONS
#appropriations:schoolaid
0
WeVote Research Nonpartisan
Bill Summary · HB 4577

HB 4577 — School Aid Appropriations (FY 2025–26) — Summary

Status: Passed House (H‑3 substitute) June 11, 2025; referred to Senate Committee on Appropriations. Introduced: March 12, 2025 (Rep. Tim Kelly).

Purpose

HB 4577 is the FY 2025–26 State School Aid appropriation and a broad package of amendments to the State School Aid Act of 1979. It funds K–12 operations, categorical grants, and related state educational programs, and makes substantive formula, one‑time grant, and retirement‑related changes affecting districts, public school academies (PSAs), and intermediate school districts (ISDs).

Appropriations / Fiscal totals (House version)

  • Gross FY 2025–26 appropriation (House reported): about $21.9 billion (an increase of ~5.5% from FY 2024–25 YTD).
  • Specific line items in Sec. 11 (as passed House): approximately $17.77 billion from the State School Aid Fund and $78.83 million GF/GP, plus targeted amounts from several reserve/transport/other funds. (House Fiscal Agency tables reflect the full gross total above.)

Key provisions and changes

  • Foundation allowance

    • House provides a per‑pupil foundation increase of $417 (4.3%), raising the foundation allowance from $9,608 to $10,025 per pupil; cyber schools are included in this increase (contrast: other versions reduced cyber allowances).
    • Reflects cost adjustments: House reduces foundation costs by $359.0 million SAF to reflect updated membership and taxable value estimates.

  • New per‑pupil payments (Sec. 22f)

    • $3.076 billion total ($40.8 million GF/GP):
    • ~$2.7 billion to districts (~$1,975 per pupil),
    • $314.4 million SAF to ISDs (~$228 per pupil),
    • $40.8 million to eligible nonpublic schools.
    • Conditions: districts must pledge to support at least one school resource officer (SRO) and one mental‑health support staff member; reporting requirements on fund use; nonpublics allowed to share SROs.

  • Roll‑up hold‑harmless (Sec. 22h)

    • House provides $130.9 million SAF (note: earlier drafting showed $138.8 million; HFA notes $130.9M is correct) to hold districts/ISDs harmless for funding reorganizations into Sec. 22f.

  • School Consolidation & Infrastructure Fund (Sec. 11x(5))

    • One‑time $286.5 million for competitive grants (priority: roofing/HVAC), consolidation grants, per‑pupil incentives for class-size reduction, and incentives for Read‑by‑Grade‑3 programs (requires literacy coach and MDE‑approved reading assessment). PSAs eligible.

  • MPSERS (school employees’ pension) funding changes

    • House reduces state SAF support for K–12 MPSERS by a large amount (House package ~ $1.2 billion SAF reduction compared with FY 2024–25 YTD in HFA tables). Changes include eliminating certain one‑time reserve payments, adjusting payroll growth assumptions to 0%, modifying reimbursement mechanisms for certain retiree‑related normal‑cost contributions, and other technical shifts. (Executive and Senate versions proposed different reductions—see HFA analysis for comparisons.)

  • Payment schedule (Sec. 17b)

    • Monthly distribution dates specified (20th of Oct–Aug); installments generally 1/11 of entitlement; districts directed to accrue July/August payments to the prior school fiscal year; superintendent may authorize limited advances (no more than 30 days earlier) for short, nonrecurring needs.

  • Statutory scope

    • The passed substitute (H‑3) simultaneously amends many sections of the State School Aid Act and adds new sections (e.g., 16, 22f, 22h, 32y, 95b, 164k) to implement the funding and program changes.

Who is affected

  • 537 local school districts, 285 public school academies, 56 ISDs — through foundation increases, per‑pupil payments, categorical grants, and MPSERS changes.
  • Nonpublic schools — eligible for a portion of the new per‑pupil payments with specified conditions.
  • State agencies — Michigan Department of Education, MiLEAP, CEPI and others for program administration.

Procedural / timing notes

  • House adopted substitute H‑3 and passed the bill with immediate effect on June 11, 2025 (roll call 56–53). The bill was transmitted to the Senate and referred to the Senate Appropriations Committee.
  • House Fiscal Agency analysis provides comparative tables (Executive, Senate, House) and identifies drafting issues (e.g., the roll‑up hold‑harmless amount).

Additional notes

  • The bill is both an appropriation and a substantive statutory rewrite in many areas of the school aid act; final fiscal and policy outcomes will depend on Senate action and any conference changes.
  • For detailed line‑item and technical language (MPSERS mechanics, eligibility rules, reporting requirements, and statute‑by‑statute changes), consult the H‑3 substitute text and the House Fiscal Agency analysis.

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.