Source: Sherman Publications

The future of funding
In the wake of a failed bond proposal, LOCS officials wary as they begin tackle of big changes from Lansing

by Laura Colvin

March 09, 2011

One thing was certain as school board members took their first official look at Gov. Rick Snyder’s budget proposal: Lake Orion Community Schools is facing a busload of questions and no easy answers.

The board last met Feb. 23 – in the wake of a failed Feb. 22 bond proposal – and heard speculation about what the proposal – specifically changes to education funding – could mean for Lake Orion schools.

“It’s important to understand this is the first set of numbers we’re seeing,” said Jillynn Keppler, assistant superintendent of administrative services. “History has proven the first set of numbers tends to be worse than what we actually end up with, but this shows us where the governor and his administration are headed and it’s important for us to take head.”

Snyder’s plan, released Feb. 17, calls for a restructuring of the State Education Fund, which currently provides support to K-12 public education in Michigan.

The new plan – renamed the State Education Act, would still employ school aid fund revenue generated by the 1994 passage of Proposal A, but would also receive general fund dollars.

But more significantly, the new plan would lasso and support the state’s entire education system, from preschool through community college and higher education, rather than K-12.

Although loopholes and incentives are built into Snyder’s proposal, school administrators fear results won’t be difficult to predict; fewer dollars stretched greater distances.

Overall, the education section of the governor’s plan

Allots 12.2 billion for K-12 funding statewide

$296 million for community colleges, including a $196 million draw from the state aid fund

$1.3 billion for higher education, including a $700 million draw from the SAF

A $719 million cut over last year to the 2011-2012 foundation allowance statewide

In Lake Orion, the 2010-2011 foundation allowance came in at $8,132 per pupil

In 2011-2012, that number could shrink to $7,832, a reduction of about $300 per student in addition to the already-anticipated $170 per student reduction

Reductions in funding and services, Keppler explained, are also likely to arise from proposed cuts to Intermediate School Districts (ISD), which, in Oakland County could mean considerable reductions to special education programs.

Significant and more frequent hikes to the MPSERS rate are a huge concern, as well, Keppler pointed out.

“We are required to be a part of this,” she said. “This is not an option. This is not a negotiated component. It is a legal mandate we must participate in.”

Currently, the district is shelling out 20.66 cents in pension funding for every dollar of teacher salary paid.

Snyder’s plan calls for an increase to 24.46 percent in 2011-2012 – which equates to $238 per pupil – and another hike, to 27.37 percent – or 27.37 cents on every dollar of teacher salary paid – in 2012-2013.

Last year, MPSERS took a $7 million bite out of the district’s overall budget.

Keppler summarized that Snyder’s proposal adds up to a net reduction of $708 in per pupil in Lake Orion – approximately a $5.5 million hit to the LOCS 2011-2012 budget.

Trustee Bob Gritzinger asked about the potential for a legal challenge to Synder’s plan.

“Funds from Proposal A were designated for the school aid fund,” said Gritzinger, who’s preparing to step down after a 12-year tenure on the board. “That was a statewide ballot imitative passed by voters. (Snyder’s proposal) is an attempt to modify that funding stream and move money to pay for other entities. That’s a taking of funds; a rewriting of something passed by the voters.”

Interim Superintendent Marion Ginopolis said the Michigan Association of School Administrators was indeed looking into the issue, but the outcome was anything but certain.

“We all know we have to make reductions,” Ginopolis said. “But when we start funding the community colleges and higher education institutions out of the state aid fund, that’s questionable; that was never the intention.”

Those institutions, she pointed out, are able to raise money through tuition increases.

“We do not have that opportunity,” she said.

Still, Ginopolis reminded the board “nothing is carved in stone.”

“I do anticipate some revisions to (Snyder’s proposal, but not a lot,” she said. “I do believe this time we are really going to have to look at these kinds of reductions.”

The governor is scheduled to talk April 1 about the state’s education system.

“I don’t anticipate much talk of change in the numbers,” Ginopolis said. “But primarily his vision of education for the future.”

At his Feb. 17 budget proposal presentation, Snyder said he didn’t expect the state to turn around on a dime and recover overnight.

“This is a comprehensive plan to lay a new, sound foundation for Michigan’s reinvention and put an end to the significant budget deficits the state has experienced for the past decade,” he said. “It reflects difficult but necessary decisions that will result in a shared sacrifice, but ultimately will benefit citizens, families and communities through the economic growth and job creation that is generated.”

One “shared sacrifice” could lead to some $300 million in incentive funds, beginning in 2013, for school districts that require employees to share health care costs at levels comparable to those paid by state employees.

Keppler told the board state employees with a grandfather clause currently pay 10 percent of their health care benefit costs, while newer employees pick up 20 percent of the tab.

By 2013, she said, all state employees are expected to be paying in at 20 percent.

In Lake Orion Community Schools, Keppler said:

Central office administrators and directors all pay five percent of health care benefit costs

Teachers and non-bargaining employees chip in 2.5 percent

Secretaries contribute one percent and

AFSCME union members – district support staff – “are currently in negotiation”