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SB 858

Appropriations: school aid; fiscal year 2026-2027 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 Darrin Camilleri

SB 858 updates and standardizes Michigan’s K-12 funding for FY 2025–2027, clarifying how funds from multiple sources are allocated and distributed to districts on a predictable mon

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Bill Summary · SB 858

Summary of SB 858 (Michigan, 2025-2026): Appropriations for K-12 School Aid, FY 2026-2027

Purpose and Intent

  • SB 858 proposes to amend 1979 PA 94 (the state school aid act) by updating appropriations for K-12 education and related state purposes for fiscal years ending September 30, 2025, 2026, and 2027.
  • The bill adjusts the mix and level of funding from multiple funds and sets out the timing and process for distributing state school aid payments to local districts and intermediate districts.

Key Provisions and Changes

Sec. 11 – Statewide Education Funding Totals (FY 2025–FY 2027)

  • Establishes specific appropriations for the fiscal year ending September 30, 2025, from multiple funds:
    • State School Aid Fund: $17,936,546,300
    • General Fund: $78,830,600
    • Community District Education Trust Fund (up to): $41,000,000
    • School Transportation Fund (up to): $125,000,000
    • Enrollment Stabilization Fund (up to): $71,000,000
    • School Meals Reserve Fund (up to): $30,000,000
    • Great Start Readiness Program Reserve Fund (up to): $18,000,000
    • MPSERS Retirement Obligation Reform Reserve Fund (up to): $481,400,000
    • Educator Fellowship Public Provider Fund (up to): $30,000,000
  • For the fiscal year ending September 30, 2026:
    • Total appropriations increase in line-item format, with specified portions from:
    • State School Aid Fund
    • General Fund
    • School Consolidation and Infrastructure Fund (up to): $100,000,000
    • School Transportation Fund (up to): $125,000,000
    • Enrollment Stabilization Fund (up to): $71,000,000
    • Great Start Readiness Reserve Fund (up to): $18,000,000
    • Educator Fellowship Public Provider Fund (up to): $30,000,000
    • State School Aid Pupil Support Reserve Fund (up to): $97,037,400
    • General Pupil Support Reserve Fund (up to): $600,000
  • For the fiscal year ending September 30, 2027:
    • Nominally appropriates $100.00 from several funds (State School Aid Fund, General Fund, School Consolidation and Infrastructure Fund, School Transportation Fund, Enrollment Stabilization Fund, Great Start Readiness Reserve Fund, Educator Fellowship Public Provider Fund, State School Aid Pupil Support Reserve Fund, and General Pupil Support Reserve Fund)—likely placeholders indicating annual baseline caps or formula-driven amounts rather than fixed dollar figures.
  • All available federal funds are presumed to be appropriated as allocated in this article for fiscal years ending 2025, 2026, and 2027.

Sec. 11a (Referenced) and Sec. 12–29e References

  • The bill references reserve funds and dedicated accounts (e.g., school aid stabilization fund, MPSERS reserve, educator fellowship fund) and continues to govern how non-state school aid funds may be used within these appropriations.

Sec. 17b – Payment Schedule and Administrative Procedures

  • Establishes a streamlined, monthly installment schedule for distributing entitlements to school districts and intermediate districts:
    • Installments issued by the 20th of each month from October through August (with specific dates listed: Oct 20, Nov 20, Dec 20, Jan 20, Feb 20, Mar 20, Apr 20, May 20, Jun 20, Jul 20, Aug 20).
    • Payments are based on an entitlement of 1/11 per month, with July and August accruals applied to the prior fiscal year (i.e., school year ending June 30).
  • The State Treasurer processes payments via warrants or electronic funds transfers, timely to the business day if the scheduled date falls on a non-business day.
  • The Department may adjust payments to rectify underpayments due to legal changes or computational errors.
  • Grants to districts and intermediate districts are generally paid on the same installment schedule, subject to the above timing.
  • Optional advance releases of funds may be authorized for temporary, nonrecurring needs if approved by the superintendent, the State Treasurer, and the State Budget Director, with a cap of advancing no more than 30 days earlier than the established payment date.

Who Is Affected

  • Local school districts and intermediate districts that receive state school aid and related funds.
  • State departments and offices (Department of Education and Treasury) responsible for administering and disbursing school aid.
  • Beneficiary funds (e.g., MPSERS, Great Start Readiness, school transportation, enrollment stabilization, and various reserve funds) that allocate and manage dedicated dollars.

Procedural and Timeline Aspects

  • Introduces annual appropriations for three fiscal years (2025, 2026, 2027) and codifies the order of expenditure (general fund before state school aid fund) per Sec. 11(2).
  • Addresses year-end fund balance treatment: unexpended general fund allocations revert to the school aid stabilization fund (Sec. 11(3)).
  • Sets a recurring, monthly distribution schedule for district funding (Sec. 17b) and provides mechanisms for adjustments and potential early releases.

Summary

SB 858 primarily updates and clarifies the allocation and timing of Michigan’s K-12 school aid appropriations for FY 2025–2027, incorporating multiple dedicated funds, expanding or reaffirming reserve fund roles, and codifying a predictable monthly distribution schedule to districts. It emphasizes ensuring proper fund hierarchy (expend general fund before the state school aid fund), preserving unspent dollars in stabilization reserves, and providing administrative flexibility for adjustments and emergency fund advances.

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

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