Commissioner's Newsletter
December 2, 2003
To: School Administrators
Re: Governor Releases Funds for Education
Gov. Holden announced this morning that he is releasing a total of $83 million in funding for public education. This action was made possible because the state is receiving this amount of federal funding for social services earlier than usual. As a result, state money that would have been used for Medicaid expenses can be released and used to cover some of the withholdings that had been imposed on education for this fiscal year.
Of the $83 million released today, $75 million will be allocated to school districts through the Foundation Formula; $8 million will be released to higher education institutions. This represents the same proportion in which funding had been withheld from K-12 and higher education for this year.
The December payment to school districts will be made on December 22. That payment will reflect the additional $75 million in basic formula aid. There will be no adjustments at this time to the categorical payments (transportation, gifted and remedial reading).
We estimate that, with the additional funds, the proration factors in the December payment will be approximately .89 (Lines 1A and 14A) and .84 (Lines 1B and 14B). Overall, we estimate that the additional $75 million will mean an increase of about 1.5 percentage points in the state-level proration factors. As you know, the proration factors change monthly as a result of corrections in districts’ data. The monthly memos you receive from the School Finance Section will keep you informed about additional or more precise adjustments in the proration factors.
The governor emphasized that today’s action does NOT signal any change in the basic outlook for the state’s budget for this year or next year. This infusion of federal funds helps free up some money that will be helpful to many districts across the state. However, we encourage you to remain very cautious in your spending for the current year and your planning and budgeting for next year.