Washtenaw County schools, residents continue school budget discussions
The stark reality facing the Saline school district, Superintendent Scot Graden says, is the district will become insolvent by the middle of next year if cuts aren't made.
That’s a future Graden doesn’t want to see.
“The board of education and I have made it clear that this is NOT an option,” Graden wrote in a recent e-mail to district parents. “We have begun the process of assessing the ramifications of our current shortfall and exploring the options for solving (it).”
Saline isn't the only local school district facing such dire straits. The buzz over school funding is continuing strong, nearly two weeks after voters turned down a 2-mill countywide enhancement millage that would have raised $30 million for the 10 traditional school districts in Washtenaw County.
School officials and school boards are weighing massive cuts in their programs, teachers are worrying about layoffs, residents are organizing reform efforts and community meetings are being scheduled.
In school board meetings across Washtenaw County since the vote, more details about budget shortfalls are emerging.
The deficits aren’t the product of the failed millage vote. Instead, they're the outcome of nearly $300 per student cuts from each school district’s state funding over the last month. Ann Arbor has seen almost double that amount cut per student.
Per-pupil state aid is a school district’s main source of revenue.
“Based on up-to-date staffing, adjustments in special education reimbursement, declining enrollment and a $292 per-pupil reduction, we have a $2 million shortfall for the (current) 2009-2010 school year,” Graden wrote. “And based on a conservative estimates-per-pupil state funding cut of $300, an expected decline in enrollment (the size difference between the graduating class and a typical incoming kindergarten class), and increases in salaries, health care, energy, etc., we project an additional shortfall of $3.4 million next year."
That's a combined $5.4 million deficit in the next 18 months, Greden said, noting as a point of reference that the district's current fund balance is $3.4 million - 6.5 percent of its $53 million total budget. Independent auditors recommend a 10 percent to 15 percent fund balance for a district of Saline's size, Graden said.
Graden has scheduled a “Community Conversation” about finances for 6:30 p.m. to 8:30 p.m. Monday night in the Liberty School auditorium.
Saline’s school board also voted last Tuesday to direct Graden to reopen the district’s contract with teachers.
Similar conversations will begin soon in all the area’s school districts, superintendents said.
Albert Berriz jokes the work of running his company, McKinley Inc., is piling up as he has meetings on school financing.
Berriz was one of the key drivers behind the millage defeat. He spent at least $75,000 of his company’s money to fund the anti-millage campaign.
And he took flack for the move from those who said he was doing so to save his real estate company a lot of money on taxes.
Not true, he said.
“I’ve never been unwilling to tax myself if there’s a good reason for the tax,” he said, pointing to his support of Ann Arbor’s greenbelt millage.
But he says school districts haven’t done enough to manage their budgets before asking people for more money in a tough economic time.
Berriz outlined several steps he believes districts should take now:
- Look closely at consolidation to make sure buildings are running efficiently at capacity. He doesn’t see a reason buildings should be running 75 percent full. “There’s going to be survivors and losers. I do believe that the probability that this county will have 11 district overheads (including the Washtenaw Intermediate School District) is not high, but the kids don’t have to suffer in that. They can still get a good education.”
- Competitively bid out support services and health insurance coverage. He said he pays more for health insurance for his company’s 1,200 employees than he does in property damage insurance on his properties, a main reason he bids his company’s insurance regularly. That generates savings for his company, money he think the school districts can also realize.Â
- Open up Ann Arbor as a schools of choice district, drawing in students from around the county. Thay would increase revenues in Ann Arbor and also work to further diversify schools.
Berriz also said districts should become more transparent about their finances and the moves they intend to make.
“What I’m trying to get (school officials) to understand is that when they are transparent people trust them," he said. "When they are opaque (as they are now), people’s fears that something is wrong are magnified.”
He knows his ideas are controversial.Â And that tough times are likely to continue.
“These topics are all about the center because they don’t affect the kids,” he said.Â “The likelihood that you will see a building boom in any (Washtenaw County) township is less than zero. There’s going to be no new construction. The value of the existing tax base will continue to decline. Plus, on the sales tax, there’s less disposable income now."
Berriz said he also knows there’s the potential for emotional pleas from parents to save the programs their kids are involved in.
“We don’t have to be a divided community on this topic. We can come together and move forward.”
Ann Arbor school board Treasurer Randy Friedman worries that division may already being happening.
“There were two main reasons people voted against the millage," he said. "One is they said I don’t want to raise my taxes in tough times. That’s a very honest view that I understand and I sympathize with. While it is painful to see taxes go up, it’s even more pain to see education deteriorate. (However) that’s a legitimate and fair argument (against the millage)."
The other argument,Â Friedman said, is theÂ school district is being mismanaged. He said people were misled and didn't understand the district's finances.
“They said there needed to be more transparency. I’m sorry. There’s plenty of transparency and transparency doesn’t pay teachers," he said. "There have been consistent efforts in this district to pare down our administration.”
FriedmanÂ said he’s afraid the district is on the verge of a return to several years ago, where board meetings were filled with divisiveness and superintendents were regularly run out of town. But he said he hopes it will be the opposite, and the community will come together.
“In the short-term, there’s going to be cuts that need to be made and how the community responds will be the key in if we look back in three years and say we did a hell of job of solving this problem or if we look back and say we fought when we should have thought,”Â FriedmanÂ said.
Not all the efforts are taking place at the local level.
Several parents, district employees and school board members traveled to Lansing to lobby lawmakers for restoration of funding and health care reform.
Also, one of the main anti-millage citizen groups has turned into The Coalition for Responsible Schools for All Students, a political action committee lobbying for education reform.
The group is holding its first public meeting from 6 p.m. to 8 p.m. tonight, Nov. 15, at the Ann Arbor Community Center, 625 N. Main St.
On the agenda is the latest information on school funding from Lansing, a recap of election results and a discussion about the future for local schools.
David Jesse covers K-12 education for AnnArbor.com. He can be reached at email@example.com or at 734-623-2534.