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The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us)



STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL


Opinion No. 5992

October 6, 1981

SCHOOLS AND SCHOOL DISTRICTS:

State School Aid Act--Computation of deduction for vocational programs of out-of-formula school district

An out-of-formula school district which receives a 50% reduction in state school added cost reimbursement for vocational programs in 1980-1981 and reduces its added cost expenditures for vocational education programs will experience a corresponding reduction in its state school aid added cost reimbursement for such programs.

The Honorable Alvin DeGrow

State Senator

The Capitol

Lansing, Michigan

You have requested my opinion on a question which may be phrased as follows:

Pursuant to 1979 PA 94, Secs. 21(1) and (4) and 61(1), as amended by 1980 PA 320, may an out-of-formula school district that receives a 50% reduction in state school aid added cost reimbursement for vocational education programs in 1980-1981 reduce its added cost expenditures for vocational education programs without experiencing a corresponding reduction in its state school aid added cost reimbursement for such programs?

In the State School Aid Act of 1979, 1979 PA 94; MCLA 388.1601 et seq; MSA 15.1919(901) et seq, Secs. 21(1) and (4), and 61(1), as amended by 1980 PA 320, the Legislature has provided:

'Sec. 21. (1) Except as otherwise provided in this act, from the amount appropriated in section 11, there is allocated to each district an amount per membership pupil sufficient to guarantee the district for 1980-81 a combined state-local yield or gross allowance of $357.00 plus $46.24 for each mill of operating tax levied. For purposes of this section, only taxes levied for purposes included in the operation cost of the district as prescribed in section 7 shall be considered operating tax. The net allocation for each district shall be an amount per membership pupil computed by subtracting, from the gross allowance guaranteed the district, the product of the district's state equalized valuation behind each membership pupil and the millage utilized for computing the gross allowance.

(4) If the net allocation computed for a district pursuant to subsection (1) is a negative amount, it shall be applied as a deduction against any funds otherwise due the district under all other sections of this act, except for funds due under section 97 to a district that is acting as the legal fiscal agent for a consortium of districts, or of districts and intermediate districts, for the purpose of operating a professional staff development or career education in-service program, and funds due under sections 53 and 143. However, the deduction made under this subsection shall not exceed 50% of a district's total state aid entitlement under all other sections of this act or $15,500,000.00 statewide.'

Sec. 61. (1) From the amount appropriated in section 11, there is allocated $20,300,000.00 for 1980-81 to reimburse districts and secondary area vocational-technical centers for secondary-level vocational-technical education programs on an added cost basis. The definition of what constitutes those programs and reimbursement shall be pursuant to rules promulgated by the state board. Applications for participation in the programs shall be filed in the form prescribed by the department. The department shall determine the added cost for each vocational-technical program area. The allocation of added cost funds shall be based on the type of vocational-technical programs provided, the number of pupils enrolled, and the length of the training period provided, and shall not exceed 75% of the added cost of any program, except that extended day and summer school programs shall be allocated 100% of added costs. . . .'

In 1979 PA 94, Sec. 21(4), supra, reference is made to the net allocation computed for a school district pursuant to 1979 PA 94, Sec. 21(1), supra. 1979 PA 94, Sec. 21(1), supra, contains the formula for determining the per membership pupil amount of state school aid to be paid to school districts receiving such aid. Under the formula, for each membership pupil a school district receives $357, plus $46.24 for each mill of operating tax levied, in combined state and local funds, referred to as the gross allowance guaranteed the district, minus the product of the district's state equalized valuation per pupil and the millage levied for operating purposes.

Some high property tax valuation school districts generate more property tax revenues per levied per pupil than the amount of guaranteed state and local funds contained in 1979 PA 94, Sec. 21(1), supra, and thus do not receive any state school aid funds under section 21(1). These districts are the so-called out-of-forumla districts.

Pursuant to 1979 PA 94, Sec. 21(4), supra, if the net allocation for a district under section 21(1) is a negative amount, i.e., its local property tax revenues per pupil per mill exceed the guaranteed amount of combined state and local funds per pupil per mill levied, such negative amount is to be deducted from any funds otherwise due the school district under 1979 PA 94, supra. However, the deduction for an out-of-formula district may not exceed 50% of the school district's total state aid entitlement under all other sections of 1979 PA 94, supra.

In 1979 PA 94, Sec. 61(1), supra, the Legislature has provided for state school aid reimbursement of the added costs of vocational education programs incurred by school districts. The added cost state school aid reimbursement for vocational education programs is limited to 75% of the added cost of any program incurred by the school district.

If a school district spends $32,000.00 in added costs for vocational education programs for 1980-1981, (1) the 75% state school aid reimbursement pursuant to 1979 PA 94, Sec. 61(1), supra, would be $24,000.00. Pursuant to 1979 PA 94, Sec. 21(4), supra, a district object to the maximum deduction thereunder, 50%, would receive $12,000.00 in state school aid added cost reimbursement under 1979 PA 94, Sec. 61(1), supra. (2) Thus, $20,000.00 of the $32,000.00 added cost expenditures for vocational education would come from local property tax revenues that were not reimbursed by state school aid funds.

It has been contended that, in a situation like that set forth above, since the local district is only receiving $12,000.00, it should be able to reduce its unreimbursed expenditures for added cost vocational education programs for 1980-1981 to $4,000, i.e., 25% of $16,000.00.

However, pursuant to 1979 PA 94, Sec. 61(1), supra, a school district that only expended a total of $16,000.00 in added costs for vocational education programs would only be eligible for $12,000.00 or 75% state school aid added cost reimbursement for vocational education programs. Further, pursuant to 1979 PA 94, Sec. 21(4), supra, the 50% deduction would reduce the state school aid added cost reimbursement to $6,000.00.

The deduction required by 1979 PA 94, Sec. 21(4), supra, is applied to funds otherwise due the district under the statute. Pursuant to 1979 PA 94, 61(1), supra, the reimbursement funds due thereunder are computed on the basis of actual added cost vocational education expenditures by the school district. Once the amount due the school district under 1979 PA 94, Sec. 6(1), supra, and other sections of the statute has been ascertained, then the deduction required by section 21(4) of the same statute is applied to such amount.

The Department of Education has interpreted 1979 PA 94, Secs. 21(1) and (4) and 61(1), supra, as applying only to the actual added cost vocational education expenditures incurred by a school district. Thus, if a school district receiving a 50% deduction under 1979 PA 94, Sec. 21(4), supra, reduces its actual added cost expenditures for vocational education programs, it will receive a corresponding reduction in its state school aid added cost reimbursement for such programs. The construction given a statute by the agency charged with administering the statute is entitled to respectful consideration and will not be rejected without cogent reasons. Board of Education of Oakland Schools v Superintendent of Public Instruction, 401 Mich 37, 41; 257 NW2d 73, 75 (1977).

It is my opinion, therefore, that, pursuant to 1979 PA 94, Secs. 21(1) and (4) and 61(1), supra, an out-of-formula school district that receives a 50% reduction in state school aid added cost reimbursement for vocational education programs in 1980-1981 and reduces its added cost expenditures for vocational education programs will experience a corresponding reduction in its state school aid added cost reimbursement for such programs.

Frank J. Kelley

Attorney General

(1) During 1980-1981, state school aid added cost reimbursement for vocational education programs was paid to school districts on an estimated basis. Once the actual vocational added cost expenditures of school districts become known, state aid payment adjustments are made in the subsequent year so that school districts only receive vocational education added cost reimbursement based upon their actual added cost expenditures.

(2) The deduction contained in 1979 PA 94, Sec. 21(4), supra, is applied to the total dollar amount the school district would otherwise receive under other sections of such statute. For a school district that received a 50% deduction under 1979 PA 94, Sec. 21(4), supra, the practical effect would be to reduce the state school aid added cost reimbursement for vocational education the school district would otherwise receive under 1979 PA 94, Sec. 61(1), supra, by 50%.

 


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