Conference committee reaches compromise on K-12 funding

A joint House-Senate conference committee in the state legislature reached an agreement on Thursday night to reduce the severity of the cuts in K-12 funding found in the original school budget bill that failed to pass the House last week as time ran out on budget negotiations.

The agreement is to reduce the cuts in school aid by $105 million, dropping the loss from $219 to $165 per pupil. That $105 million now must be made up by boosting revenue and a vote is expected to take place on Friday on a package that includes a reduction in the Earned Income Tax Credit for low-income families and a $50 million reduction in the tax credit for the movie industry.

In order to get those concessions, however, the Democrats had to agree to one of the GOP’s most persistent policy goals — the phase out of the surcharge on the Michigan Business Tax over the next three years.

The committee also reduced the cut in aid to intermediate school districts, which helps fund special education programs among other things, from 40 percent to 20 percent.

Both houses will now have to pass the compromise, which is hardly a certainty, and Gov. Granholm would have to sign it. If all that happens, perhaps the single largest obstacle to reaching a final budget agreement will have been cleared.