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HB 6277

Education: financing; limitations on mills levied for school operating purposes; revise. Amends secs. 20 & 22a of 1979 PA 94 (MCL 388.1620 & 388.1622a).

2023-2024 Regular Session

HB 6277 caps annual per-district funding growth by tying changes to the statewide target or CPI, standardizing the 2024–25 target at $9,608 and shaping state/local shares according

bill electronically reproduced 12/10/2024
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Bill Summary · HB 6277

Summary — HB 6277 (Education financing; revise limitations on school operating mills / amend MCL 388.1620 & 388.1622a)

Status: Enacted (listed as Public Act 25‑129). Introduced Dec 10, 2024; passed both chambers June 2025; transmitted to Secretary of State June 25, 2025; signed by the Governor July 8, 2025.

Purpose / intent

HB 6277 amends the State School Aid Act of 1979 (sections 20 and 22a) to (1) set the statewide target foundation allowance for the 2024–2025 school year and (2) prescribe rules for calculating each district’s foundation allowance and the state/local funding share. The changes limit year‑to‑year growth of individual district foundation allowances by linking increases to either the change in the statewide target or the U.S. Consumer Price Index (CPI), whichever produces the lesser increase under specified rules.

Key provisions

  • Target foundation allowance for 2024–2025: $9,608.00 per pupil (sec. 20(1)).
  • Foundation allowance calculation (sec. 20(3)):
    • Districts already at the prior year target receive the current target ($9,608).
    • Districts above or below the prior target receive an increase equal to the lesser of:
    • (a) prior year foundation allowance + any per‑pupil supplemental amount (sec. 20m(2) from the prior year) + the change in the statewide target; or
    • (b) prior year foundation allowance × (percentage increase in the U.S. CPI for the relevant calendar year as reported by the May Revenue Estimating Conference).
    • Foundation allowances are rounded up to the nearest whole dollar.
  • State vs. local share (sec. 20(4)):
    • Generally, the state portion equals the lesser of the district’s foundation allowance or the target, minus the local portion.
    • For districts described in the above increase rules, the state portion is calculated as: target foundation allowance − district supplemental per pupil (sec. 20m) − local portion.
    • For districts subject to a constitutional millage reduction (Art. IX, §31), the department must compute the state share as if that millage reduction had not occurred.
  • Special rules:
    • Receiving districts that continue to levy operating taxes for a dissolved district: taxable value per pupil excludes the dissolved district’s property value.
    • Community districts that are coterminous with a qualifying school district use that qualifying district’s foundation allowance.
    • Allocation basis: generally based on a pupil’s district of residence, with specific rules for pupils enrolled elsewhere under sections 105/105c and for K–5/6/8 pupils attending districts for grades not offered at residence district.
    • Public school academies (charter schools): allocation per non‑special education membership pupil equals the target ($9,608), except cyber “school of excellence” academies operating under section 552 receive $9,150. For academies starting after the pupil count day, per‑pupil amounts are prorated by instructional hours (cannot exceed the otherwise applicable amount).

Who is affected

  • Local public school districts (including reconfigured/merged districts)
  • Public school academies (charters), including cyber schools designated as schools of excellence
  • Community districts and receiving districts handling dissolved district liabilities
  • Pupils (allocation basis may change for some inter‑district enrollments)
  • Local taxpayers may be indirectly affected via computed local share and millage treatment

Fiscal and procedural notes

  • The bill ties allowable per‑district increases to CPI growth or target change, potentially constraining growth in state aid obligations for higher‑grant districts while moving lower‑grant districts toward the statewide target under controlled increments.
  • The bill references supplemental per‑pupil payments under section 20m; effect on district revenues depends on how those supplements are calculated and funded.
  • The text provided includes amendments to sec. 20 in detail; the bill also amends sec. 22a (MCL 388.1622a), though the summary text for that section is not included here.

Practical impact

HB 6277 standardizes the 2024–25 per‑pupil target and establishes a CPI‑linked cap on district allowance growth formulas and state aid calculations. Districts currently above the statewide target will see increases limited by the CPI cap or the target increase, possibly slowing revenue growth for those districts; districts below the target will move upward under the same capped rule. Special rules for charters, community districts, and dissolved‑district tax treatment clarify allocation and taxable value calculations.

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

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