Source: Sherman Publications

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District layoffs soar, deficit $2.8 M

by David Fleet

April 27, 2011

The Goodrich School Board voted 7-0 on Monday night to issue 25 pink slips to district teachers in an effort to rectify a projected $2.8 million budget shortfall for the 2011-12 school year.

The layoff notices are based on seniority and which teacher is qualified to teach a specific subject. The employees, along with the Goodrich Education Association, were notified prior to the May 1 contract deadline. The district currently employs 109 teachers.

Goodrich School District Superintendent John Fazer said the current situation with funding in the state is critical.

"We don't want to be fighting for our economic lives," he said. "We had better learn how to succeed with what we have. I know emotions run high in these times. We just have to be smart."

Fazer said that based on the initial budget proposal by Gov. Rick Snyder, Goodrich is projecting a $ 2.8 million deficit for 2011-12 with a current fund balance of $2.5 million.

"We anticipate dipping into the fund balance but will have to make significant reductions in the budget for next year," said Fazer, following the vote. "If we are not fiscally responsibly our fund balance will disappear with in 18 months. The state is projecting a loss of $300 per student in addition to the $170 of federal stimulus funding that was not replaced. School districts also have to cover the $230 per student for the increase in retirement payments. This all is in addition to the ongoing new operational expenditures that a district has in the way of wage/step and insurance increases and energy needs which exceed another $200 per student. This quickly adds up to $900 per student in financial deficit. Could this lead to bankruptcy and take over by the state at some point?"

"Definitely yes," he said.

Reductions and re-structuring will be necessary in all districts statewide including Goodrich, added Fazer.

"Initially we had to make layoffs to meet contractual requirements. We now will determine the restructuring based on the financial information as we receive it from the Governor's office," he said.

According to news reports 43 Michigan school districts and charter schools were in deficits as of June 30, 2010. Roughly 150 more had fund balances at less than 5 percent of their annual operating expenditures.