Schools Brace for Another Possible State Aid Cut

October 31, 2009

Governor Jennifer Granholm announced on Oct. 22 that the payments to the school districts would be cut by an additional $127 per student in 30 days unless the Michigan Legislature found additional revenue to fund the payments. This comes after an earlier announcement that State Aid payments would be cut by $165 per student.

"We’re facing a crisis in funding K-12 education in our state," Governor Granholm said. "The K-12 school aid budget that is just days old is woefully underfunded. The Legislature needs to act now to find the revenues that are critical to our schools.

"We won’t solve the serious school-funding problem we have in Michigan today unless we are honest about its magnitude," Granholm said.

If a new revenue source is not found, the $127 per student cut will be taken out of State Aid payments beginning with the Dec. 20 payment.
Portland hit hard

In the Portland School District, the loss of additional $127 per student puts the total deficit at $722,653 when combined with the $165 per student cut and the loss of 48 students during the fall student count.

"It is absolutely devastating," said Portland superintendent Charles Dumas. "If we were to rely solely on our fund balance to make up the deficit, we were going to spend nearly half of it to make up for the first cut and enrollment decrease. But if you figure this cut in with it, we would end up spending half to three-quarters of our fund balance on this budget."

Dumas added the timing of the cut could not be worse as the district is four months into the school’s fiscal year and had made many purchases to get ready for the school year. "Right now, we are scrambling to see what cuts can be made this late," said Dumas. "We still do not want to make cuts that will impact the students or their programs. But at this point, the classrooms are set, the bus routes are set, contracts with our unions have been approved. There is really not much we can do at this point. We have to try and hurry up to make some brutal decisions that you don’t want to hurry and make."

Dumas said the district’s board of education is already having some discussions on action that can be taken for this year, as well as anticipating similar problems next year.

"We have had some discussions and working on some ideas that are feasible and will keep classes going for students," said Dumas. "Right now we want to explore all of our options before we go public with anything. And then you also have to look to next year when we figure our fixed costs will go up and we will have another reduction in State Aid."
P-W holding on

In the Pewamo-Westphalia School District, the loss of $116,000 in State Aid has grown to approximately $205,000 with the additional $ 127 per student cut.

P-W superintendent Ron Simon said making cuts to deal with the additional loss of revenue would be difficult.

"We are four months into our fiscal year and most of the decisions regarding staffing and hiring have already been made," said Simon. "We do have some positions that are unfilled and will remain unfilled for this year. If the cut does happen, we will also put a freeze on all non-essential spending and then look for ways to do more with less, which is what many businesses are already doing."
Changes needed

Dumas added that it may take some action by the legislature to help schools get out of the problem.

"My message to the legislators is that we understand that we have to make cuts and will, but we are also fenced in as to what we can do," said Dumas. "State law requires us to have 1,098 hours of instruction so we cannot reduce the schedule. Plus we have new state graduation requirements so we cannot affect the staff because we have to offer these classes. We do not want to change the class sizes because of our contracts. And we cannot deficit spend because we would have our State Aid taken away."

Simon agreed that changes were needed.

"The state needs to figure out how to fund schools," said Simon. "There needs to be a consistent source of revenue for schools. Once we know what that is, we would then have to prepare our budgets to live within our means. Right now, we just have to figure out how to do things different."

However, Simon added that the state needs to do some reforms on their end.
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"I think the state needs to look at reforming the school retirement system and to health insurance," said Simon. "There is only so much we can do at the local level."

Dumas said the district’s board of education is already having some discussions on action that can be taken for this year, as well as anticipating similar problems next year.
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"We have had some discussions and working on some ideas that are feasible and will keep classes going for students," said Dumas. "Right now we want to explore all of our options before we go public with anything. And then you also have to look to next year when we figure our fixed costs will go up and we will have another reduction in State Aid."
P-W holding on

In the Pewamo-Westphalia School District, the loss of $116,000 in State Aid has grown to approximately $205,000 with the additional $127 per student cut.

P-W superintendent Ron Simon said making cuts to deal with the additional loss of revenue would be difficult.

"We are four months into our fiscal year and most of the decisions regarding staffing and hiring have already been made," said Simon. "We do have some positions that are unfilled and will remain unfilled for this year. If the cut does happen, we will also put a freeze on all non-essential spending and then look for ways to do more with less, which is what many businesses are already doing."
Changes needed

Dumas added that it may take some action by the legislature to help schools get out of the problem.

& #x0A; "My message to the legislators is that we understand that we have to make cuts and will, but we are also fenced in as to what we can do," said Dumas. "State law requires us to have 1,098 hours of instruction so we cannot reduce the schedule. Plus we have new state graduation requirements so we cannot affect the staff because we have to offer these classes. We do not want to change the class sizes because of our contracts. And we cannot deficit spend because we would have our State Aid taken away."

Simon agreed that changes were needed.

"The state needs to figure out how to fund schools," said Simon. "There needs to be a consistent source of revenue for schools. Once we know what that is, we would then have to prepare our budgets to live within our means. Right now, we just have to figure out how to do things different."

However, Simon added that the state needs to do some reforms on their end.

"I think the state needs to look at reforming the school retirement system and to health insurance," said Simon. "There is only so much we can do at the local level."