Chesaning Schools adjust budget to compensate
CHESANING – “According to Moody’s we are no longer in a recession!” announced Chesaning Union Schools (CUS) Finance Director Scott Sawyer during the Dec. 21 meeting of the CUS Board of Education. Although, he added that he didn’t believe the State of Michigan has recovered the 500,000 jobs lost between 2006-2007. “We’ve been consistent,” he said.
Sawyer prepared the schools’ 2009-2010 budget in June. At that point unemployment in the State of Michigan was at 15.2 percent. He told the school board he suspects the actual unemployment rate is even higher.
He talked about the costs that are increasing. The cost of insurance is up 20.9 percent, even though teachers agreed to accept lesser health insurance with higher deductibles. Retirement costs are up 9.4 percent.
On the flip side, revenues are down. The State of Michigan is saying that schools are receiving $7,316 per student. But then they cut $165 per student. In addition, $527 per student comes from local property taxes, but they count local tax revenue as revenue the state provides, Sawyer explained. In actuality, the state is really giving the schools $6,343 per student in revenue.
“As of last year, state aid was supported by stimulus money,” he continued. The stimulus money, which amounts to $281 of the funding per student, can only be used to fund certain things according to the federal government.
“We have to plan our budget in June. We don’t know what the state is going to pay us,” Sawyer stated. “Now we’re half way through our fiscal year and I still don’t know what our income is going to be.”
Chesaning Union Schools have increased by one student over last February, he reported to the school board. Sawyer told the Citizen that presently Chesaning has an un-audited student population of 1,795.41. He explained that students who do not attend Chesaning Schools fulltime are counted as a fraction of those attending full-time. For instance, special education students and students from Our Lady Parish School who attend some classes at Chesaning Schools would be counted as partial students.
Sawyer used a chart to illustrate the “Funding Cliff” he predicts as the state continues to reduce its funding to schools and replaces funds with more and more stimulus money over the next few years. He predicts that when the stimulus money is gone, the state will not be capable of replacing those funds.
Chesaning Union Schools are in better financial condition than most school districts, Sawyer explained. For fiscal year 2009, Chesaning Schools carried a fund balance of $2,350,606, which is 15.4 percent of the schools’ budget.
For fiscal year 2010, Sawyer is projecting a fiscal year fund balance of $2,021,171, which is 13.1 percent of the schools’ budget.
“The districts our size average a fund balance of 11.3 percent,” Sawyer said, comparing those districts with Chesaning’s usual fund balance of 15.4 percent.
“You’re going to see some WILD things due to cuts,” Sawyer told the school board. He anticipates that there will be three categories of schools: 1) Those that go into deficit this year, 2) Those schools that go into deficit next year, and 3) Those that will make it to 2011-2012. “We may go into deficit in three years,” Sawyer said adding, “I’m confident in saying we’re not in a great financial state, but we’re better than other districts.”
Trustee Martin Maier asked, “How do we increase the number of students to increase state funding? Hemlock just increased the pay-to-play by $75 per sport. All we need is for three students from Hemlock to move here.”
Trustee Kevin Fesler said, “I heard Owosso will expect to layoff 35 teachers.” He felt Chesaning Schools may be able to gain some students on the fringes.
Sawyer said he had heard of some districts that had rolled back salaries by 10 percent.
School Board President Jennie Carlton commented, “I don’t think it’s out there that we DON’T charge our students payto play.”
“As more districts struggle, we need to promote what we have,” Sawyer responded.
Sawyer proposed an option he believes could help schools statewide. He explained that the Michigan Education Special Services Association (MESSA) is a third party administrator for teacher health insurance. MESSA buys Blue Cross Blue Shield health insurance at a discount. “They’re a nonprofit, that’s not paying claims,” Sawyer said. MESSA has $364 million in reserve, according to Sawyer, “and that doesn’t include this year’s figures,” he stated. “The majority of this money was accumulated over the past three years,” Sawyer continued, “It’s all public money. It’s taxpayers’ money.”
He explained that the teachers are receiving great benefit programs, but [MESSA is] over charging us for benefits!”
“The state is pushing to consolidate services,” Sawyer said, explaining that Chesaning Schools already do that with technology, working with the Saginaw Intermediate School District. It eliminates some administrative costs. However, he cautioned that if we’re the cheapest in the county, and Bay City is higher the costs could be averaged. “Why would we want to be averaged out with Bay City?” Sawyer asked.
“We’ve already been looking at [consolidating] for the past three years and doing it where it made sense,” Sawyer said.
“Right now we’ve shut off spending except for emergencies,” Sawyer said.
Carlton added, “We have to thank our staff. We’re very lucky to be where we are.”
Sawyer agreed, saying, “Our teachers are chipping in -- We’ve got great kids with good test scores. Our kids are thriving.”
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