The Federal Stimulus drive in conference hosted by MASA and MSBO on May 26th appears to have been a success.  For handouts and detailed information distributed at the conference please click here. We will also be conducting various webinars in the future to clarify programs, applications and procedures surrounding the use of ARRA funds. While many questions surrounding the state budget situation fund still remain, I am hopeful that this update will bring you up to speed on a few things.

First, the State of Michigan has officially applied for the first round (67%) of budget stabilization dollars. This grant is in the process of being vetted by the U.S. Department of Education, was given verbal approval and will likely be granted in the coming days.  Prior to receivership of these dollars MDE will begin the local application process. The application available to local districts will likely become available by June 10th (tomorrow) on the MEGS reporting system and could be awarded to districts within a week or two of receivership. Make sure you look for this correspondence and have someone available to begin the application immediately. MDE has indicated that additional guidance will accompany this application. In addition, the Michigan School Business Officials will be sending out further guidance clarifying accounting and reporting criteria to business officials later this week. Continue to monitor for that information.

The dollars in this application will only be appropriated for the 2008-09 school year and will be used to backfill a shortfall to the School Aid Fund of nearly $429 million.  The legislature will work concurrently with the application process to pass a negative supplemental in the coming days that will both create a hole in the foundation grant of nearly $265 per student and simultaneously restore it using federal grant dollars. 
Moving forward, the 2009-10 School Aid budget projections show a shortfall for nearly $940 million, this equates to approximately $590 per student. This second round of stabilization dollars will require an additional application after the legislature passes the 2009-10 budget. There will not be enough stimulus dollars to restore the entire 2009-10 projected shortfall, which means there will be additional cuts to categorical programs this year. To complicate matters, some legislative leaders are discussing even larger cuts to 2009-10 in order to shift ARRA dollars to 2010-11 to make future cuts less severe. It is likely a budget will not be agreed upon later this summer. MASA will continue to monitor and update you as further information becomes available.

Michigan Budget Stabilization Fund Summary

• Federal Grant application reviewed and approved by United States Department of Education this week.
• Michigan Department of Education to make available stabilization grant applications to local districts (Wednesday, June 10th).  Districts can begin to work on their applications, but will not be able to submit them until revised allocations are finalized.
• The legislature to pass supplemental legislation to appropriate budget stabilization dollars this week.

Additional Information
MDE RECOVERY WEBSITE
MASA RECOVERY WEBSITE