LANSING – Governor Jennifer Granholm’s veto Tuesday of $246 million in federal money for K-12 schools because of the way the Legislature distributed the money to districts likely means those schools with lower per pupil funding will receive more than they would have.
Granholm signed HB 5872 (PA 205), which overall had $316 million in federal money designed to preserve public school employee jobs, but vetoed the section that distributed $246 million by giving $154 per pupil back to each district to restore the cut each received in the 2009-10 fiscal year budget.
The governor cited a letter from the U.S. Department of Education, which was dated Tuesday, indicating the federal government could seek repayment of the funds, based on how the state allocated the money. A letter from Joseph Conaty, the U.S. Department of Education’s director for academic improvement and teacher quality programs, said the state either needs to award the money on the basis of its main funding formula or through shares of Title I.
“I look forward to working with the Legislature on enactment of a new appropriation for Michigan schools that allocates funds using Michigan’s primary funding formula rather than attempting to restore prior reductions in education funding in a manner that is prohibited by federal law,” Granholm wrote in her veto message. “If we work together, we can ensure that all schools receive their fair share of this federal assistance.”
When the bill cleared the Senate, the Senate considered, but rejected, spending all $316 million through the formula. That version, which appears to be what Granholm is recommending, would mean higher-funded districts receive as little as $110 per pupil and lower-funded districts get as much as $220 per pupil. As a result, some districts would not get their full $154 cut restored for the upcoming fiscal year.
Under the version that was passed by the Legislature, just $65.8 million of the money was done through the formula and the rest through $154 per pupil to each district.
Granholm press secretary Liz Boyd said the administration had received an informal indication from the federal government that the state’s allocation would run afoul of their rules. They asked for a letter putting those concerns in writing, but it did not arrive until Tuesday because of Columbus Day on Monday, which is a federal government holiday.
Boyd noted that while Granholm signed the bill Monday, she did so with the understanding the letter would arrive on Tuesday, so the governor’s office did not file the bill with the secretary of state – the action that makes a bill officially law – until Tuesday morning once the letter was received.
“Our administration was aware that this was a potential problem and we warned the Legislature about it during target-setting,” she said.
Boyd noted that the alternate version that failed in the Senate, offered by Sen. Ron Jelinek (R-Three Oaks), the Senate Appropriations Committee chair, would have appropriated the money correctly.
Rep. Terry Brown (D-Pigeon), chair of the House Appropriations School Aid Subcommittee, said he expected the Legislature would move quickly after the election to correct the issue. Brown said he was surprised, but not shocked by the veto, saying the Granholm administration was not thrilled with the way the bill came out of the Legislature.
“We believed we met the requirements of the law,” he said. “At the end of the day, it looks like they want us to do it another way.”
Don Wotruba of the Michigan Association of School Boards said his group also was surprised by the veto, saying it thought the bill complied with federal rules. He said he also expected disbursement of the money to go through the formula, benefiting districts with lower pupil funding levels.
“It is not as an equitable way to do this appropriation as we would have liked,” he said.
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