A financial rollercoaster
Schools may get $3.1 mil reprieve
June 02, 2010 - The schools' financial puzzle pieces have changed again.
Five weeks ago, Lake Orion Board of Education members sought to lower the amount in the district's fund balance from 15 percent of yearly expenses to 12 percent, to free up some cash. Those funds could have helped save programming or jobs, but the move would leave the district with less of a cushion for payroll and emergency purchases.
|School board Treasurer Jim Weidman discusses the schools’ financial difficulties. Photo by Megan Collier (click for larger version)|
Now, the proverbial budgetary noose tightening around schools across the state is loosening a little, say district officials, and taking extra from fund balance isn't needed. Money could even be coming back to the district from the state if May's sales tax revenues are as good as indicated by state officials.
This would mean the expected $9 million in cuts in Lake Orion could be more like $6 million.
According to Jillynn Keppler, assistant superintendent of administrative services in Lake Orion, a gray cloud promising a $268-per-student cut in funding has cleared up, freeing $2.1 million.
"Obviously, this is very positive news. …The [state legislation] has not passed yet, but I do know that most districts are switching to a flat projection for next year. That is the best information we have at this time," said Keppler.
She says there's also a bill moving through state legislature that could reimburse $65 of a $165 cut in per-student funding from this year and next year, leaving Lake Orion schools with a cool $1 million more than estimated just five months ago.
It took some minutes for boardmembers to grapple with the positive financial forecast at their May 26 meeting after such a wild "rollercoaster" from January until now.
"One take-away is to make sure that next January, we don't overreact to that number," said Boardmember Bob Gritzinger.
Treasurer Jim Weidman warned his peers and the public not to get too comfortable.
"While the [state's] school aid fund is 'flush' with cash, the general fund is going to be short $500 million this year, and a $1 billion next year. When push comes to shove, and they have to extinguish some other fires, gotta go where the money is. I have continuing concerns that this good news is only a temporary condition," he said.
In the mean time, district administrators continue to expect a rise in retirement fund contribution costs to 19 percent. The increase in costs jumped the district's needed budget cuts from $8 million to $9 million, before receiving the good sales tax news from the state, which rollercoastered the cuts back down to $6 million.
Keppler says the rise in retirement costs is still an estimated number because it's impossible to predict exactly how many employees will retire statewide.
Reporter, Lake Orion Review