Traverse City Record-Eagle

Region

July 9, 2010

State aid for school districts lagging

Per-pupil increase is offset by cuts, educators say

BY LINDSAY VANHULLE lvanhulle@record-eagle.com

TRAVERSE CITY — School districts in Michigan will have $11 added to their per-student state aid for 2009-10 and 2010-11, but some local administrators said it isn't enough to overcome a hefty cut last year.

Gov. Jennifer Granholm signed next year's school aid budget, approved by the Legislature last week and adopted well before the Oct. 1 start of Michigan's fiscal year.

Schools' fiscal year began July 1 and their 2010-11 budgets already are adopted.

Granholm vetoed several line items, including some allocations for new programs and "proposed appropriations which are contingent upon passage of legislation to increase state revenues," she wrote in a letter dated Wednesday.

Districts across the state were reduced $165 per student this past year, meaning they still will operate with a structural cut this fall — even after the $11 bump.

The minimum per-student allocation becomes $7,162. The figure is down $154 from $7,316 in 2008-09. Traverse City Area Public Schools and many other regional school systems are among the state's lowest-funded.

TCAPS budgeted no increase in per-student funding this year. The district is planning for $85 million in expenses and a roughly $4.2 million shortfall, which could be reduced further if employees agree to accept about $3 million in compensation cuts.

"We're still being funded at a level that's less than 2008," said Paul Soma, chief financial officer. "That's kind of the challenge of making something (sound) like good news. It's more like less bad news."

The state schools budget also increases the rate districts have to pay into Michigan's retirement system from 16.94 percent to 19.41 percent. Administrators, including Soma and Superintendent Lee Sandy of Kalkaska Public Schools, anticipated the figure and budgeted for it.

The rate could be lowered later once the effects of recent retirement reforms are known.

The higher rate creates about $150,000 in added costs for Kingsley Area Schools, Superintendent Lynn Gullekson said. The $11 change itself represents about $16,500.

"That gives you an idea of the bigger picture," he said. "It's a step in the right direction, but it's still not going to help overcome the increase in costs that the state's passing on to the school districts."

Kingsley budgeted about $11.7 million in expenses and a projected surplus of $19,338. The district cut more than $500,000 next year, including a bus route, and lost seven employees to retirement.

At least 17 employees retired in Kalkaska, Sandy said. His approved $14.2 million budget includes a $1 million deficit, but Sandy said it was based on a "worst scenario" and will be positively adjusted by $400,000.

The net $154 per-student cut will mean $237,000 in less revenue next year, he said.

Legislators also continue to discuss whether to use an estimated $230 million School Aid Fund surplus to offset a deficit in the state's general fund.

Soma said the debate likely will continue until the latter budget is adopted.

Sandy, for one, wants the funds kept for education.

"They still have money sitting there that they could have made us whole," he said. "That money is the schools' money, and not anybody else's."

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