Budget process, governor's veto
leaves local schools reeling
One budget cut is painful. Two downright hurt. Expecting the possibility of many more to come is excruciating, and Grosse Pointe Public Schools can relate, after Gov. Jennifer Granholm blindsided state schools with budget cuts.
“The state knew there was a significant budget shortfall back in May and June when schools were reviewing and approving their budgets,” said Christian Fenton, assistant superintendent for business and support services.
Granholm signed the School Aid Act bill into law Monday (Oct. 19), which cuts funding by $165 per pupil. But in an unexpected move the following day, the governor used her line-item veto to eliminate Section 20J funds, an additional $198 cut per pupil. The cutting still isn't over, however: Late yesterday (Oct. 22), Granholm took another chunk of money away from the schools–$212 million statewide, or another $127 per pupil. School officials estimate the grand total is roughly $4 million per year.
“The governor’s 20J cut took everyone completely by surprise and reeks of a politically vindictive move against the state senate," said Brendan Walsh, president of the local board of education. “There is no other way to put it other than to say it reflects poor leadership.”
Out of 550 public school systems, 39 of them received 20J funds.
“The 20J funds represent over $1.6 million in our annual school budget,” said Dr. Suzanne Klein, superintendent of Grosse Pointe Public Schools.
“This is in addition to the $165 per student reduction for the 2009-10 school year recently approved by the legislature, which translated to over $1.3 million dollars for the district.”
The system will be able to ride out the fiscal crisis for a period of time.
“In Grosse Pointe, we have been fiscally conservative and have a healthy fund equity,” said Walsh. “This could get us through some tough times, but it is not a long-term financial strategy. No doubt this will result in massive employee layoffs across the state.”
Unfortunately, the combined loss of $363 per pupil in Grosse Pointe Schools is not the final cut by any means. The possibility of more budget cuts and the decline of tax revenues such as sales tax and income tax are not helping matters either.
“Gov. Granholm said when she signed the budget that slashed the 20J funds that school districts can anticipate as much as another $120 per pupil cut in this fiscal year and as much as $700 per pupil next year,” said Walsh.
“Sales tax and income tax account for 60 percent of the state’s School Aid Fund. Another 18 percent of the School Aid Fund is based on property tax revenues and those are also expected to fall as taxable value declines. Additional K-12 funding cuts are almost certain.”
Rebecca Fannon, the schools' spokeswoman, said the district will continue to budget conservatively, "keeping cuts as far from the classroom as possible. Unlike many other districts, our fund equity is within the suggested range of 15-20 percent of the operating budget, as established by the Michigan School Business Officials.”
Aside from the new law and the veto on 20J funding, the millage proposals on the Nov. 3rd ballot could further affect the budget and direction of Grosse Pointe schools. The millage proposals are the only bases for funding available to local school districts that are approved, collected and appropriated locally.
“Given the recent funding cuts, the loss of these millages would be even more devastating,” said Walsh.
“The two millage renewals account for roughly $25 million per year. So as bad as the state decisions impact us, the local millages would impact us literally eight times worse.”
The loss of 20J funds have understandably stirred emotion within Grosse Pointe Schools.
“The Governor changed the rules for political expediency,” said Fenton.
“We are doing our part by cutting budgets and watching our expenses. The State is not doing their part by two major reductions at the very beginning of the year.
“It is outrageous.”
