LANSING – Governor Jennifer Granholm announced Thursday (December 10th) that the $127 per-pupil reduction in school aid payments to school districts is being paused.  The decision is due to school districts spending less than authorized in 2009 and because of an unexpected increase in non-homestead property tax values.  A formal letter from Budget Director Bob Emerson advising lawmakers of the pause in the reduction was sent to the chairs of the Senate and House Appropriations Committees Thursday.

Without the pause, state officials would have processed the reduction in the December 20 school aid payments Thursday.  In preparation for the payment reduction, the governor asked budget and treasury officials for the latest information on the state School Aid Fund, which precipitated Thursday’s announcement.

“The unexpected change in the School Aid Fund, which has led us to pause the proration ordered on October 22, provides temporary relief for school districts around the state,” Granholm said.  “Throughout these uncertain economic times, our focus has been on giving school districts the most up-to-date information available so they can adjust their budgets accordingly.  School districts still face tough decisions about how best to deal with significant funding cuts, but we are pleased that the closing of the books for 2009 has brought some short-term relief.”

Granholm emphasized that while today’s announcement is likely to be welcomed by teachers, parents and students across the state, it does not affect the $165 per-pupil cut contained in the 2010 budget or the potential for a multi-million dollar shortfall in the 2011 school year.

“The crisis of how we fund public education is real,” Granholm said.  “While the hard work of school officials across the state to cut their budgets has resulted in a larger than expected carryforward from the last fiscal year, we must continue to find a way to ensure stable and adequate funding for public education next year and beyond.”

Granholm announced the expected proration on October 22 after treasury officials warned that declining state revenues could lead to a potential $212 million shortfall in the FY 2010 school aid budget.

Source:  News release from Governor Jennifer Granholm