Archive for September 28th, 2009

Actions in Lansing Could Force Dearborn Schools to Cut Additional $6 Million This Year From Budget

Monday, September 28th, 2009

dbn-schoolsLess than five months after the Dearborn School Board of Education approved a budget that included $10.2 million in cuts, the district now could be forced to slash an additional $6 million this school year as a result of actions by our elected officials in Lansing.

And if that isn’t bad enough, for the 2010-2011 school year the state of Michigan could be eliminating as much as $500 per student.

In a recent letter to his staff, Dearborn School Supt. Brian J. Whiston outlined what the school district could face in the coming days. Below is a copy of the letter:

 

Greetings,

The State of Michigan has only a few days until the October 1 deadline to finalize the state budget and I’m sure that information coming out of Lansing has changed since this letter was drafted. However, despite the ever changing news, I would like to take a brief moment to try and recap where we are as a district regarding our budget and what the news from Lansing will mean to all of us here in the Dearborn Public Schools.

Where the District stood as of September 3 in regard to the 2009-10 Budget

Budget assumptions made to create the 2009-10 budget:

                       Original (6/30/2009)       Revised (9/3/2009)

Compensation      $5,000,000                               $5,000,000

State Aid Reduction($100/pp)  1,800,000                —-

State Aid Reduction($265/pp)      —-                     (4,800,000)

Stimulus Restoration($265/pp)    —-                      4,800,000

31-a At-Risk Reduction(25%)         —-                    1,500,000

Pension Increase(16.54% to 16.94% )1,000,000        400,000

Inflation(benefits, utilities, etc)  1,000,000               1,000,000             

Special Education (Act 18 deficit) 1,000,000            1,000,000

2009 Fund Balance      750,000                            750,000

 TOTAL Deficit     $10,550,000                           $9,650,000

Here is brief explanation of each item:

$5 million in compensation – The district will spend $5 million more in 2009-10 than in 2008-09 to pay for the salaries of all employees.

$1.8 million state aid reduction ($100/per pupil) – At the time the 2009-10 budget was being put together (January – June of 09) the district was told by sources in Lansing to expect anywhere from a $75 to $125 cut in per pupil funding (called the Foundation Grant). We chose to use a $100 figure in building the budget. The actual reduction in per pupil funding is $265 per student. The state of Michigan will use federal stimulus money to “plug” that hole and make up the $265 cut to keep per pupil funding at the 2008-09 level. Please read the information below to understand how this has changed in the last few weeks.

• 31-a At-Risk reduction – Originally these funds were not going to be touched but, over the summer, 31-a funds became a target for reductions. The district was told that 25% of 31-a funding could be cut.

• Pension increase (16.54% to 16.94%) – This is the amount the district pays to the state that goes into the pension fund. Again, back in the spring of 2009, we were being told to expect a 1% increase. There is actually good news here as the increase is only going to be .4 %.

• Inflation (benefits, utilities, etc.) – This is a projected increase in expenses due to inflation.

• Special Education (Act 18 deficit) – The county provides Special Education services to students in all districts through a series of “Center Programs.” A few years ago voters in Wayne County approved a millage that covered the cost of these Center Programs. However, expenses will once again outpace revenue and the county will be asking each school district to “pay them back” for the use of the Center Program. The district projects that we will need to pay the county $2 million from the general budget in 2010-11. The plan is to take $1 million from the general budget this year and $1 million next year to cover the $2 million.

• 2009 fund balance – The district used $750,000 from the fund balance for the 2008-09 budget. If we don’t reduce the 2009-10 budget by $750,000, we will once again be short.

The original projected deficit for 2009-10 was $10.5 million. After revisions to the revenue and pension assumptions, the total deficit was reduced to $9.6 million. Since the number is based on estimates we chose to reduce $10.2 million and use that figure as the projected deficit amount.

What has happened since June?

Over the summer the House of Representatives passed a state budget for 2009-10 and then State Senators went to work on their version. A committee made up of both Senators and Representatives are working to finalize a budget to present to the Governor for her approval. The following shows how the current budget discussion in Lansing will impact Dearborn Public Schools. The budget discussions in Lansing are changing by the day and by the hour. The information below could look the same or very different before the October 1 budget deadline in Lansing. We will continue to keep you updated as information becomes available.

Where we are at on September 23 with the 2009-10 Budget

Current discussions in Lansing regarding reductions and their impact on our district:

             Possible Reduction, Option C

 31-a At-Risk      $1,500,000

$218 per pupil     $4,000,000

GSRP                $1,623,000

                       $7,123,000

Already budgeted  ($1,500,000)

                         $5,623,000

Carry over            $2,000,000

TOTAL Reduction  $7,623,000

Here is brief explanation of each item:

• 31-a At-Risk – The discussion in Lansing has once again turned to cutting part or all of the 31-a funding our district receives. This money is used to provide support and instruction to at-risk students across the district.

• $218 per pupil – In the first set of numbers the federal stimulus money was used to keep districts from losing per-pupil funding. However, even with federal stimulus dollars the state doesn’t have enough money to provide the current level of funding and therefore needs to reduce the Foundation Grant by $218.

• GSRP (Great Start Readiness Program) – The GSRP program is for children who are not yet in kindergarten but have been identified as being academically at-risk. This program is structured instruction taught by certified teachers that make sure children enter kindergarten at the same academic level as their peers. The proposed cut would eliminate the program.

• Already budgeted – In June, and again in September, the district made assumptions on state revenues. The September revision assumed a $1.5 million reduction in state funding. This amount was part of the $9.6 million deficit and expenses were already reduced to address the $1.5 million projected loss.

• Carry over – This amount is being carried over from the 2008-09 budget due to several reasons including a reduction in revenue late in the year, planned cuts that were not fully implemented, and unanticipated costs.

• Total Reduction- Depending on what budget proposal lawmakers in Lansing finally agree to, the district could face $7.6 million in reductions. This is above and beyond the $10.2 million that was already cut from the 2009-10 budget when it was approved back in June. It’s important to remember that state law sets our budget year starting July 1 while the state’s budget year begins October 1. The state provides us with the money to operate but has not determined how much they are going to give us until we are one quarter into our fiscal year.

What are we doing now?

The district administration, including all principals, has been working since late August to identify additional areas to reduce the budget. Even if all funding is restored we still have a structural problem that will continue to impact our budget year after year until it is addressed. In addition, any federal money that was used to make up shortfalls in the 2008-09 budget and the 2009-10 budget will not be around for the 2010-11 budget. It is very likely that the 2010-11 school year will be hit with a big reduction in per student funding, possibly as much as $500 per student.

Although we face some difficult decisions, I am confident that the recommendations from our staff, principals and administrators will continue to focus on improving instruction and providing a quality education to the students in our district. How we run our district and how our students attend school may look different, but please know that the work of our district, educating children, will always drive our budget decisions.

Regards,

Brian J. Whiston

Superintendent