State funding cut may take $640K bite from Niles schools

Published 2:14 am Saturday, December 16, 2006

By By ANDY HAMILTON / Niles Daily Star
NILES – Niles Community Schools could be facing budget cuts next year.
The announcement is expected to come Monday at 7 p.m. at the Westside Administrative Services Center, 111 Spruce St., during the regular meeting of the board of education. Superintendent Doug Law said Friday the district might face budget cuts if per pupil funding from the state is lower than originally projected.
"It doesn't spell a critical situation for us," Law said. "It's something that will have to be solved in the long-term. Short-term, we'll be able to get through the crisis."
Niles originally predicted for their budget $233 per student funding, Law said, and added rumors from Lansing have indicated funding could come in as low as $160 per pupil. A state revenue meeting is scheduled for January to evaluate the public school funding situation, after which the legislature has 30 days to find an alternative source, other than state sales tax, for the money, Law said.
If per pupil funding comes in as less than expected, Law said the district could have about $640,000 less than predicted in the budget. If the state money is short then a chunk could come out of the district's fund equity to balance and budget cuts could follow next year, he added.
"The difficult part of that is we won't know that until the end of February when we have three months of school left and basically no time to do anything," Law said.
Law pointed to two factors that could prevent Niles from cutting budgets – possibly through privatizing some services. First, he said, the district has "a fairly decent fund equity," and secondly, the recent lease of bandwidth to SourcIT of Grand Rapids for $620,000.
Niles looked into privatizing bus drivers two years ago but never took action. Law said instead the district agreed to a two-year contract with the drivers that, in part, stated Niles would not privatize the service through the length of the agreement. That contract expires June 2007, Law said.
"The board has not put out RFP's [requests for proposals] at this point and they will wait until the second semester to explore that possibility," Law said.
He also added he has given the board 10 to 12 possible budget areas to cut in the district to consider if the state does reduce per pupil funding.
"I think everything has to be on the table," he said.
Even with the bandwidth deal, Law said he expects the district to have a budget deficit for the first time in five years. Niles originally adopted a fund balance of $1.2 million and later reduced that amount to $1 million, Law said.
"We believe this will be well under a half-million dollar deficit," he added.
Also on the agenda for Monday's meeting is raising the district's daily pay rate for substitute teachers.
If passed, Law said the rate would increase $10 to $80 per day starting Jan. 8.
The current rate is the lowest in the county, Law said, and the jump would place the Niles compensation at the area average.
"It's to keep us competitive," Law said.
He also added the district has at times been short on substitute teachers, possibly because of the pay rate. Niles, along with school systems in Edwardsburg, Cassopolis and Dowagiac, uses the AESOP automated teacher replacement computer program, and substitutes could be choosing work at better paying districts, Law said.
"We are also looking for more people to be substitute teachers," he added.
Anyone interested in substitute teaching at Niles Community Schools can contact director of personnel John Tanke at 683-6662.