Many school costs locked inPublished 9:44am Tuesday, November 3, 2009
By JOHN EBY
Dowagiac Daily News
“Local control” seems an oxymoron when it comes to much of the school budget.
“We have no impact on numbers that are given to us every year,” Assistant Superintendent for Business and Operations Hal Davis explained to the Dowagiac Board of Education work session at Pathfinder alternative education center Monday night.
For example, Michigan Public School Employees Retirement System (MPSERS) pension costs increased from 11.66 percent in 1999-2000 to 16.94 percent for 2009-2010 – a 45.28-percent increase over 10 years.
“Everybody who’s retired gets the same benefit they did,” Davis said, “it just costs more. For every dollar in payroll, I pay 17 cents to the state. On every employee. If you had $10 million in salary, you’d pay $1.7 million for retirement. That’s every school employee – bus drivers, secretaries, aides, anybody on the school payroll.”
Turning to the state aid foundation grant for each student, Davis showed its progression from $5,700 in 1999-2000 to $6,000 in 2000-2001, $6,500 in 2001-2002, $6,700 in 2002-2003, $6,626 in 2003-2004, $6,700 in 2004-2005, $6,875 in 2005-2006, $7,085 in 2006-2007, $7,204 in 2007-2008, $7,316 in 2008-2009 and $7,151 in 2009-2010 – $165 less.
“So while my retirement costs increased 45 percent,” Davis said, “the amount the state has given me has only gone up 25 percent.”
MESSA monthly health insurance rates over the same time frame increased 170 percent, from $612 in 1999-2000 to $1,653 for 2009-2010.
“I point this out,” Davis told the school board, “because we don’t get to set these rates. We don’t get to say we’re going to pay X amount for retirement or health care costs. They’re given to us by other outside agencies or the state. They just say, ‘Make it work.’”
Getting down to district level five-year trends, Davis showed how revenues in 2005 were $21.5 million compared to expenses of $22.3 million.
“There were a couple of years of deficit in there,” he said, but by 2009 showed $22.5 million in revenue against 22.2 million in expenditures.
“We increased our revenues by about $1 million,” he related, “and we decreased our expenses by about $1.1 million, so I take offense when state legislators say to us, ‘You need to figure out better ways to spend your dollars and cut your costs.’ ”
Davis stated, “Each year the state has either maintained or increased our state aid foundation allowance, even if by a slight amount of 1 or 2 percent. This is the first year in my career we’re actually decreasing. We may do it again at semester and we’ll probably do it even more next year.
“So, for 2009-2010, you adopted a budget with a $183,500 deficit. The state approved another budget that will cost us another $259,806. We were 12 off on our fourth Wednesday count, which will cost us another $87,792. We budgeted 2,462 (students) and it’s going to be about 2,450. If they can’t find a fix for the $127 (mid-year) cut (Gov.) Jennifer Granholm proposed in her executive order, it will cost us another $311,150. We’re looking at an $850,248 deficit this year.”
To equate raw numbers with real life significance, Davis pointed out the district spends some $500,000 per year on utilities.
“We know we can’t teach kids if we shut off the lights and heat the whole year. We could take two-thirds of the buses off the road. Maybe only rural areas (would get transportation). It’s the equivalent of about 10 teachers.”
Or, “That’s double what our athletic program costs.”
Dowagiac booked a $3.9 million fund balance June 30, 2005, which fell to $2.85 million in 2007, but rebounded to $4.3 million this year.
The number of students declined from 2,682 in 2005 to 2,523 in 2009, but “we reduced the number” of teachers (by 14, from 171 to 157) and staff (by six, from 132 to 126) to correlate with our declining enrollment. The $850,000 is immediate. Beyond that, for 2010-2011, Peg’s heard numbers all the way from $400 ($980,000) to $700 a student ($1.715 million). You’ve got a pretty healthy fund balance right now, but if it comes out at 700 and you don’t correct the $800,000, there’s $2.5 million of your fund balance gone in two years. I personally don’t trust the state to come up with a funding solution so we can maintain our school district programs the way it needs to be done.”
Davis showed with charts how the $613,530,186 in 2001-2002 lottery profits grew to $740,735,155 in 2007-2008, “but it’s a fallacy that the lottery replaces anything. Every time lottery funds go up, the general fund contribution goes down. That’s like taking money from one pocket to another.”
The combination over the same period actually fell from $1.2 billion to $769 million.
State school aid also flatlined at $12.2 billion to $12.9 billion for the past six years.
“Very little growth,” Davis said. “Proposal A doesn’t work anymore.”