LANSING - Governor Jennifer M. Granholm today signed the state school aid budget bill for the 2010 fiscal year, but warned that the budget presented to her by the legislature is seriously underfunded.

"The school aid budget presented to me is inadequately funded," Granholm said.  "If this school aid bill were a check drawn on a bank, it would be returned for insufficient funds.  To bring the budget into balance, I have vetoed $54 million in appropriations.  But even these reductions will not fully resolve the shortfall.

"While my approval of this budget will allow public schools to keep operating and school districts to continue making scheduled bond payments, the legislature has much more work to do to complete a balanced funding plan for our schools."

If State Treasurer Robert J. Kleine indicates later this week that reduced revenue will result in a further shortfall in the state school aid fund, state law requires a proration in payments to school districts beyond the $165 per pupil reduction already approved by the legislature.

The school aid budget as presented to the governor authorizes the expenditure of $12.9 billion to support Michigan's K-12 education system in fiscal year 2010, including $10.8 billion from the state school aid fund, $1.6 billion in federal funds for education, $450 million in federal Recovery Act funds, and $38.1 million from the state's general fund.

This represents a decrease of $382 million, or 2.9 percent, in total expenditures from the prior state fiscal year.  More than $260 million of that decrease is achieved by the across-the-board reduction of $165 in per pupil funding.

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