MOE Waiver Request — Michigan, Documentation of the State’s Fiscal Burdens
Summary
This is a maintenance-of-effort (MOE) data submission for fiscal year 2020 that describes Michigan's fiscal burdens from the pandemic. It reports that the State's Consensus Revenue Estimating Conference on May 15, 2020 projected a decline of $3.2 billion in combined general fund and school aid fund revenues, and that the rainy day fund had a balance of about $1.2 billion. It states that Michigan could not meet its fiscal year 2020 maintenance-of-effort. The Governor requested a $70 million fiscal year 2021 supplemental appropriation for community colleges and universities, which the Legislature passed on September 22, 2021.
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- Congressional materials
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- Department Of Education Pdf Www Ed Gov C190B01498
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- Department Of Education Pdf Www Ed Gov C190B01498
Cite this document
“MOE Waiver Request — Michigan, Documentation of the State’s Fiscal Burdens.”
Original at www.ed.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/department-of-education-pdf-www-ed-gov-c190b01498/
, SHA-256 2127c45c3de0de7c4e80a543dfc2ef122cea8ee362bcb800a652ae3c9914ece5.Full text
businesses); and
2. Documentation and data supporting the description of the State’s fiscal burdens (e.g., revenue data, appropriation
tables, unemployment statistics, etc.) including any State action that impacted State revenue (e.g., tax increases or
decreases).
3. In addition, in its waiver request, a State should submit information on the relevant factors listed below to support
its request. The Secretary may ask States for additional information after States submit the MOE waiver request
form.
In determining whether to grant a State an MOE waiver, the Secretary may consider factors such as:
Has the State increased support for education?
The Department understands that it is possible that a State has maintained or increased overall funding for education and the
proportion of the State budget for education has still declined because of increases in other areas of the budget (e.g., public health). In
these cases, the Secretary may consider:
• Has total State funding for K-12 education and for higher education (calculated separately) increased from the prior fiscal year?
• Has total State funding for K-12 education and for higher education (calculated separately) increased over time (e.g., since
baseline years)?
• Has per-pupil State funding for K-12 education and for higher education (calculated separately) increased from the prior fiscal
year?
• Has per-pupil State funding for K-12 education and for higher education (calculated separately) increased over time (e.g., since
baseline years)?
• Has the State appropriated an increase in State funding for K-12 education and for higher education for future fiscal years?
Are there exceptional circumstances that caused the State to be unable to maintain support for education?
If a State’s support for education declined, the Secretary may consider:
• Are there specific severe effects of the COVID-19 pandemic on the State’s economy that necessitated reductions in support for
elementary and secondary education and for higher education?
• What steps did the State take to avoid and/or minimize such reductions?
• Did the State use Coronavirus State and Local Fiscal Recovery Funds awarded by the U.S. Department of the Treasury under
section 9901 of the ARP Act to support elementary and secondary education and higher education?
• How did reductions in support for elementary and secondary education and for higher education compare to other budget
categories?
• Did the State take steps that reduced or will it take steps to proactively reduce its financial resources in a way that impacted or
will impact its ability to meet MOE requirements (e.g., tax changes (and in what context), additional contributions to rainy day
funds)? If so, what was the impact of the reduction (e.g., to what extent were its resources reduced or will its resources be
reduced)?
Has the State used or will it use ESSER, GEER, or Higher Education Emergency Relief (HEER) funding to replace State
funding for education?
It is important for the Department to understand the State’s use of pandemic-related Federal funds when reviewing a request for a
waiver. The Secretary may therefore consider:
• Will all unallocated ESSER or GEER funds relevant to the waiver be used to provide net new resources to K-12 schools and to
higher education and not be used to replace existing State commitments to K-12 education and to higher education?
• Will all unallocated HEER funds be used to provide net new resources to higher education and not be used to replace existing
State commitments to higher education?
• Has the State previously used any ESSER, GEER, or HEER funds to replace State funding for education?
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To the best of my knowledge and belief, all of the information in this MOE data submission are true and correct and the
failure to submit accurate data may result in liability under the False Claims Act, 31 U.S.C. § 3729 et seq.; OMB
Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement) in 2 CFR part 180, as adopted
and amended as regulations of the Department in 2 CFR part 3485; and 18 USC § 1001, as appropriate, and other
enforcement actions.
Ann Richmond 9-29-2021
Governor or Chief State School Officer or Authorized Representative (Typed or Printed Name) Telephone
(b) (6) 9-29-2021
Signature of Governor or Chief State School Officer or Authorized Representative Date
Public Burden Statement
According to the Paperwork Reduction Act of 1995, no persons are required to respond to a collection of information unless such collection displays
a valid OMB control number. The valid OMB control number for this information collection is 1810-0745. Public reporting burden for this
collection of information is estimated to average 2 hours per response, including time for reviewing instructions, searching existing data sources,
gathering and maintaining the data needed, and completing and reviewing the collection of information. The obligation to respond to this collection
is required to obtain or retain benefit under section 18008 of the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act, Division M,
Section 317 of the Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSA) Act, and Section 2004(a) of the American
Rescue Plan Act of 2021 (ARP Act) If you have any comments concerning the accuracy of the time estimate, suggestions for improving this
individual collection, or if you have comments or concerns regarding the status of your individual form, application or survey, please contact Britt
Jung, Office of State and Grantee Relations, Office of Elementary and Secondary Education, U.S. Department of Education, 400 Maryland Avenue,
SW, Washington, DC 20202-6450, email: SGR@ed.gov directly.
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1. A description of the extent to which the State experienced fiscal burdens in preventing, preparing for, and
responding to the coronavirus and an explanation of how those fiscal burdens affected the State’s ability to
maintain fiscal effort (e.g., the status of and any changes to the State’s rainy day fund, whether the State
experienced a decline in revenues, or an increase in other emergency expenses resulting from the pandemic, such
as expenses related to health care, unemployment insurance, or support for small businesses);
• May 15, 2020: The State held its semiannual Consensus Revenue Estimating Conference (CREC) to report on
anticipated revenues for fiscal years 2020, 2021, and 2022. The CREC projected a decline in combined general
fund and school aid fund revenues of $3.2 billion with less than 5 months remaining in fiscal year 2020 and an
estimated revenue reduction of another $3.1 billion for FY 2021. This decline in revenue was coupled with an
expected wage and salary employment decrease of between 9.1% and 11.7%. The State’s rainy day fund had a
balance of about $1.2 billion.
• August 6, 2020: Public Act 146 of 2020 is signed into law to balance the fiscal year 2020 budget. Virtually all areas
of state spending are reduced on top of a withdrawal from the rainy day fund of $350 million and increased
reliance on pandemic related federal funding like enhanced federal Medicaid match funding Reductions. This
included an 11% ($200m) reduction to community college and university operations. A like amount of federal
CRF funds are appropriated to assist universities and community colleges with pandemic response expenses.
• August 24, 2020: A rare August CREC is held to assist fiscal year 2021 budget development. Due to a combination
of factors, including higher than anticipated tax revenues, the fiscal year 2020 projected budget shortfall of $3.2
billion was reduced to a shortfall of $936 million and the outlook for fiscal year 2021 improved but with an
estimated revenue decline of $2.5 billion remaining. As a result of these new projections and having now
oversolved fiscal year 2020, significant one-time revenues are available for the next fiscal year.
• September 30, 2020: Governor signs the fiscal year 2021 budget. Funding for universities and community
colleges is restored to pre-reduction levels thanks to the smaller than expected shortfall and carry forward
balance from solving fiscal year 2020 both revealed in August.
• January 15, 2021: The January CREC is held which shows fiscal year 2020 revenues ended the year just $200
million shy of original pre-pandemic projections and projects fiscal year 2021 revenues improved again by $1.3
billion, leaving them just a billion below pre-pandemic estimates . With the budget shortfall resolved, significant
one-time funding is available but since the books have closed on fiscal year 2020, this funding may only be
applied to fiscal years 2021 and 2022.
• February 11, 2021: The Governor releases her fiscal year 2022 budget and along with it proposes a fiscal year
2021 supplemental appropriation of $70 million to provide additional support to community colleges and
universities to belatedly satisfy the shortfall in fiscal year 2020 ESSER maintenance of effort requirements.
• September 22, 2021: The fiscal year 2022 budget is passed. The budget includes additional investment in higher
education and including the additional $70 million proposed by the Governor for community colleges and
universities in fiscal year 2021 supplemental appropriations.
Due to the timing of the revenue events above, Michigan could not meet its fiscal year 2020 maintenance-of-effort. Since
Michigan has demonstrated its MOE on a per-pupil basis for both k-12 and higher education, we determined that an
additional $70 million in state support for community colleges and universities would put us above our baseline per-pupil
MOE level. Unfortunately, since the State had closed its books on fiscal year 2020 it was too late to appropriate those
additional funds. The Governor therefore requested a fiscal year 2021 supplemental appropriation of $70 million to
provide additional support to community colleges and universities. This requested supplemental appropriation was
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passed by the Legislature on September 22, 2021 and will be signed by the Governor into law on September 29, 2021.
2. Documentation and data supporting the description of the State’s fiscal burdens (e.g., revenue data,
appropriation tables, unemployment statistics, etc.) including any State action that impacted State revenue
(e.g., tax increases or decreases).
The graphs below illustrate the forecasted revenues for the State’s two main accounts. As you can see, projected revenues
took a major downturn in May 2020 and these were the projections used to make decisions on balancing the fiscal year
2020 budget.
As illustrated below, at the start of the COVID-19 pandemic, U.S. and Michigan employment experienced a dramatic decline
that occurred rapidly. In the lead up to Michigan’s Consensus Revenue Estimating Conference held in May 2020, Michigan’s
unemployment rate rose from 3.7 percent in March to 23.6 percent in April 2020. April 2020 was the highest unemployment rate
for the state since comparable data began being recorded. Michigan’s nonfarm payroll employment declined by 1.06 million
jobs in March and April 2020, far surpassing the gains made in the previous ten years. Additionally, information on initial
unemployment claims confirmed the rapidly rising level of unemployment in the state and nation. This unprecedented decline
in employment in Michigan and across the U.S. contributed to a forecasted revenue decline for fiscal year 2020 at the May 2020
Consensus Revenue Estimating Conference.
At the May 2020 Consensus Revenue Estimating Conference the House Fiscal Agency, Senate Fiscal Agency, and the
Administration forecasts predicted that Michigan would experience somewhere between a 9.1 percent to 11.7 percent decline in
wage and salary employment in 2020. The actual decline for 2020 was 9.2 percent for Michigan, in line with expectations.
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