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Posted on Thu, May 26, 2011 : 5:59 a.m.

Ann Arbor schools deficit projected to grow, but no additional cuts or layoffs expected

By Kyle Feldscher

An expected loss of an additional $1.4 million will grow the Ann Arbor schools’ budget deficit next year, but no additional cuts beyond those already in the district's proposed budget will be made, and the budget may include no layoffs, according to district officials.

There’s good news too: The district could get as much as $4 million back from the state if the school aid budget passed in the Senate Wednesday is a part of Gov. Rick Snyder’s final budget.

The additional loss of funding is expected to come from a decrease in special education reimbursement from the Washtenaw Intermediate School District, which can be blamed in part by a loss of one-time funds from the American Reinvestment and Recovery Act. Interim superintendent Robert Allen said the district would cover the expected additional loss in funding with the district’s fund balance, commonly referred to as a rainy day fund.

The district was already planning to use fund balance to cover the amount of deficit not filled by budget cuts and revenue increases. Using approximately $1.7 million in fund balance will bring the district’s reserves to about $17.87 million. The district faces a defict of about $16.5 million for 2011-12.

  • To download a PDF of the district’s full proposed budget, click here.

The board scheduled a study session on the budget for the afternoon of June 3 to finalize details before the June 8 vote on the final version. A time is yet to be set for that study session.

The budget calls for the elimination of 70 full-time teaching positions, and Allen said the district is six or seven positions away from cutting the positions without having to lay off any additional teachers. Allen said it is likely those final positions would be eliminated through attrition.

“Historically, there are additional retirements and separations between now and when school starts,” Allen said. “There’s a very good chance that those positions could be absorbed also.”

The proposed budget also includes the elimination of high school busing.

The school district could be in line to receive additional funding from Lansing if the budget passed by Senate lawmakers Wednesday ends up passing the House of Representatives and is signed by Snyder.

Snyder originally proposed a new $300 per pupil cut on top of an unrestored $170 per-pupil cut to K-12 school districts, which is the assumption on which Allen and other school officials built the budget.

Allen said estimates from the state now show the district would receive about $146 per pupil from the state to help with rising retirement costs, which are expected to be about $253 per pupil for each district in 2011-12. The $146 per pupil translates into about $2.4 million coming back to the district, Allen said.

The state average will be about $100 per pupil for each district. School districts will contribute 24.46 percent of an employee’s gross pay to retirement funds in 2011-12, a number which is projected to grow to 27.37 percent in 2012-13 and 28.87 percent in 2013-14, according to Allen.

Trustee Irene Patalan said the retirement rate increases, which are set by the state and out of local district control, were getting out of hand.

“Those are big, huge pieces of our pie,” she said.

The district could get additional money returned by the state for amending certain practices as well.

If the district adopts four of the five “best practices” set by the state, AAPS could receive an additional $100 per pupil, which translates to about $1.6 million in Ann Arbor, Allen said.

“At this point, we’re not sure what decision they’re going to reach,” Allen said. “The difference is at this point there’s a two-week window when they can back out and change their minds.”

The “best practices” as provided by the state on Wednesday are:

  • The district pays no more than 90 percent of health benefits for employees
  • The district is the “policy holder” for employee health insurance policies
  • The district develops or continues service consolidation plans
  • The district obtains competitive bids for at least one non-instructional service over $50,000 in value
  • The district provides a report card or dashboard with financial and performance data on its website

Allen said he believes the district already qualifies for two of those “best practices” but needs more specific information from the state to know for sure.

Trustee Glenn Nelson said he would be thrilled if the additional funding coming back from the state meant AAPS could avoid layoffs.

“I’m perfectly comfortable with that,” Nelson said of approving a budget with no layoffs, “given the prospects for the $2.4 million.”

The proposed budget did have one new cut to take the place of a proposal taken off the table by trustees at their last meeting.

The district will reduce substitute teacher costs by $600,000 to replace the principal sharing proposal, which was eliminated by the board on May 11. The sharing plan called for Abbot and Wines Elementary Schools and Pittsfield and Angell Elementary Schools to share principals.

Allen said substitute teacher costs would now be included in each building’s budget for principals to figure out, which would give a more accurate reading of how much money is needed for each school.

“It’s almost unfair to have a line-item in the budget that they’re responsible for and they never see,” Allen said.

Kyle Feldscher covers K-12 education for AnnArbor.com. He can be reached at kylefeldscher@annarbor.com or you can follow him on Twitter.

Comments

snapshot

Fri, May 27, 2011 : 5:10 a.m.

Hey cette, if charter schools got the same kind of funding the "other" public schools got they'd put them to shame. Ann Arbor gets 5.8 million of the recent "special ed" millage and 9 charter schools get to split 190,000. Ann Arbor public school teachers seem to have this arrogant attitude that they are "better" than the charter schools. If the funding was on equal ground these schools and teachers would put you slackkers with your cushy salaries and pensions to shame. To shame cette. They out teach, care more, work harder, and do way more with way less. Send some more money their way and get ready to eat their educational dust. There's a reason parents send their kids to charter schools to begin with, could you be one of them?

ViSHa

Fri, May 27, 2011 : 12:09 p.m.

The best thing about charter schools is they don't have to use Everyday Math. And you may call it cherry-picking, but if AAPS would grow a pair and get tough on kids/families that disrupt the learning for the whole class (instead of sending them to the office for quiet time, games, etc..), many more kids would succeed and parents wouldn't even consider charter schools.

local

Fri, May 27, 2011 : 11:04 a.m.

Have friends who go to charter schools in Ypsilanti and they do it because Ypsi schools are a mess. With that being said, they have mentioned on numerous occasions how kids seem to flow in and out of these schools. That there kids class has 20 kids one day and then 22 another day. That right after state count days, the class sizes seem to change again. I think these schools can kick out trouble students, almost like private schools, but wait to get the numbers for state funding. Something seems a little fishy to me. I wish we could get true investigative reporting on numbers, movement, and an honest perspective from multiple teachers who teach in these schools. At some point, it would be nice to know what is really going on and how we probably can't compare them to public schools.

cette

Fri, May 27, 2011 : 10:52 a.m.

I am not a teacher I am a parent of a kid who's been in charter and in traditional public school..If a charter says they can do the same on less money, but then they don't, they should be called out on it. They operate with public money, for supposedly, any child in the state of Michigan. For God's sake's , they have to either buck up, and do what they promised or 'fess up and tell the truth...

cette

Fri, May 27, 2011 : 10:37 a.m.

No way, no way are charters better than traditional public schools. They do not give the same level of service for all kids, they are cherry pickers, and they are not delivering on their claim they are better. They do however, run their staff more ragged for less money, for less security. Have at it, and run real numbers on what is happening at those charters, which are thinly veiled attempts to go around the voucher system. What is going on in charters will be the coming scandal in the next few years as it becomes clearer the games they play.

debling

Fri, May 27, 2011 : 3:33 a.m.

More 1/2 measures. When will we get serious about this. "The district faces a deficit of about $16.5 million for 2011-12." - no district should have any deficit, ever, period. You pay for the programs you need and what is left goes to employee compensation (which is 80-90% of the cost anyways). Either staff, wages, benefits are cut to achieve a balance. "School districts will contribute 24.46 percent of an employee's gross pay to retirement funds in 2011-12" - ridiculous. A competitive retirement package would include matching employee pension contributions $1 for $1 up to 10% of an employees salary, no more. "the district pays no more than 90 percent of health benefits for employees" - in industry 20-25% of the cost would be borne by the employee. the health plan is far to generous. The district is better off setting a total $ cap it will put into the health plan instead of guaranteeing at % of the bill.

a2flow

Fri, May 27, 2011 : 10:32 a.m.

ooops... meant has capped health care costs...if the costs go up, the employees pay the difference, not the district.

a2flow

Fri, May 27, 2011 : 10:30 a.m.

@debling... Two things...retirement costs are mandated by the state not the district. This has nothing to do with the current crop of teachers. It's for current retirees/projected requirement costs. Ann Arbor has capped their retirement expenses. Right now, people that elect better insurance are paying approximately $4000 a year. This was validated by the Mackinac Center, which is usually anti-union. It will never be confused as an arm of the MEA or public school teachers. Ann Arbor was viewed as a model of how health care could be run.

Momma G

Thu, May 26, 2011 : 9:49 p.m.

If HS busing is eliminated, the parents will find a way to get them to school unless they don't care whether their kids go to school. That is a sad reality, too. How about eliminating "cabs" for students who live outside the district or who live in other "neighborhood" schools. If they are "special education" students, provide them coverage at their "home" schools. Afterall, "special education" students are paid for out of federal or state funding.

AMOC

Fri, May 27, 2011 : 9:47 p.m.

Momma G- The only students riding in cabs ARE either special education students or advanced students who must go to a different school building during the day. There are no students who live outside the district who are transported by AAPS.

maestra27

Fri, May 27, 2011 : 10:25 a.m.

@ Momma G With regard to your comment above, there is a federal law called the McKinney-Vento Homeless Assistance Act that requires public schools to provide transportation for students who fit the definition of "homeless." When you see a student being transported to and from school in a taxi, it's often a situation where that student meets certain criteria and qualifies for that service under the McKinney-Vento Act. Public schools do not have a choice but to comply with this law.

DonBee

Fri, May 27, 2011 : 3:48 a.m.

Unfortunately it will increase the "achievement gap" in the district. In general there is a gap by ethnic group in the district on how much parents participate and care. With the elimination of busing the parent's responsibility will increase. Families with lower income will struggle with transportation. In both cases I am speaking of the "in general" instance, I know people in who are struggling with low income and people who are part of the achivement gap identified ethnic groups who are very focused on getting their children the best possible education. I am sorry that this decision will hit those people harder in many cases than any other.

TC

Thu, May 26, 2011 : 6:43 p.m.

For limited government Republicans these guys sure interfere a lot in local government.

Mike

Fri, May 27, 2011 : 1:50 a.m.

That's what limited governement is. If conservatives didn't interfere it would be spend and raise taxes, teachers need a raise and health care better than the taxpayers, no more staus quo.

ellybelle

Thu, May 26, 2011 : 6:35 p.m.

So why approve this northside evaluation assessment for 92,000.00 when money is supposed to be carefully allocated ? It seems to me that a lot of money gets spent here and there for a variety of things that add up to a LOT . But then theres concern of cutting major things like principals and teacher assistants and buses. Maybe the School Board needs some independant financial advisers who actually HAVE kids in the ann arbor schools and actually CARE what money is being spent on.

Mike

Fri, May 27, 2011 : 1:54 a.m.

If we had independent financial managers like in Detroit it would mean as a community that prides itself in being so educated and wise we would have failed miserably.

Jrileyhoff

Thu, May 26, 2011 : 5 p.m.

If high school busing is eliminated, the schools should not charge students for a parking permit.

DonBee

Fri, May 27, 2011 : 3:42 a.m.

Prices for parking are scheduled to rise in the fall, not be eliminated.

kms

Thu, May 26, 2011 : 4:09 p.m.

Another budget saving proposal was sharing a couple of elementary school principals which is now off the table. Eliminating high school bus transportation seems like a much more drastic proposal. I can't imagine the consequences of this: kids not able to get to school on time or at all, kids lingering on school grounds because they don't have a ride home, the district losing dozens of students who will chose charters or private schools, a lack of incoming students when families chose to buy homes in other nearby cities that still have buses, the 2x daily traffic snarls on major roads near the high schools as parents try to pick up kids. Has this really been thought through? Are parents OK with this? The reason the BOE canceled the principal sharing idea was because enough parents protested.

Mike

Fri, May 27, 2011 : 1:52 a.m.

Easy answer is you'll be willing to pay more taxes in a special millage elction for busing than you would be to pay for more pricipals. The people who negotiate this stuff aren't stupid, they just assume we are and that we'll cave and pay.

A2Girl63

Thu, May 26, 2011 : 2:47 p.m.

Did they agree to cut high school busing. I too am concerned as I do not have AATA access.

Mike

Fri, May 27, 2011 : 1:55 a.m.

You'll probably get a chance to reinstate it if you're willing to pay higher taxes in a special millage elction.

Kyle Feldscher

Thu, May 26, 2011 : 3:14 p.m.

A2Girl63 - They did not cut high school busing officially last night, but it is expected that it will be cut at the next board meeting on June 8.

cette

Thu, May 26, 2011 : 2:11 p.m.

Goodness, DonBee, if you think you are going to get your money's worth at a charter, have at it...Best of luck of to you and your kids, you'll need it. Why don't take all your negative energy and start figuring out a way to get your kids to school, and quit cheerleading all the cuts to the school district?

snapshot

Fri, May 27, 2011 : 5:17 a.m.

Goodness Cette, you're coming off like an arrogant educator who is wishing ill upon charter schools and the good that they do. Is it all about the kids for you? Read on and reply.

DonBee

Fri, May 27, 2011 : 3:40 a.m.

Cette - I never said I was moving my children to the charter, we will figure it out if we have to. And besides it would be easier to move them to Plymouth-Canton under schools of choice, the P-C bus stops less than 300 yards from our driveway. As to negative energy. I suppose since you are school employee anyone who questions any school spending for any reason is exerting negative energy. As to cheerleading cuts, remember I was one of the first to suggest here that the special education millage was needed. But, that old news, so I guess you don't care. As to cuts in the school, yes we need to make cuts, mostly in the number of school districts and the amount spent on administration in the districts. I want to see more teachers in the classrooms and more support for what happens in the classroom. I want to see fewer accountants, HR folks, logistics people, and others that could be consolidate at the WISD level or even (horrors) outsourced to an organization that does not have the benefits overhead of AAPS.

kms

Thu, May 26, 2011 : 11:37 a.m.

I'm very concerned about the elimination of high school busing. We live outside the boundaries of AATA. Due to my work schedule I will be unable to drive my kids to school.

DonBee

Fri, May 27, 2011 : 3:36 a.m.

@A2FLOW - I will put nothing past the administration. They never forget. When Lt. Governor Cherry proposed this under Governor Granholm (K-16), all the folks in the Democratic party thought is was great. Now that a Republican proposes it, it is evil to those people. Go figure. Mike - If you have so much money laying around, donate it to the AAPS Foundation. But if you are not willing to have your taxes raised, please don't suggest others should have theirs raised.

Mike

Fri, May 27, 2011 : 1:57 a.m.

Cuts are not necessary higher taxes are. We need more money for the teachers and administrators who are so devoted to our kids. So quit being so cheap and contact your representatives and demand higher taxes!

a2flow

Fri, May 27, 2011 : 12:55 a.m.

@DonBee, I highly doubt that the powers to be thought about payback. But you could say that the cuts are a natural consequence of the millage failing/Snyder's policies. Ann Arbor Public is typically a great educational institution, with Community, Pioneer, and Huron all placing in the top 12 in the state last year based on MME scores. Snyder has taken money that was allotted specifically for k-12 funding and inappropriately diverted it. I, for one, are tired for the people who cheer the actions of Snyder but then fret the consequences of those actions. The teachers are not the enemy and Ann Arbor Public is not a poorly performing district. You reap what you sow.

DonBee

Thu, May 26, 2011 : 1:57 p.m.

At least 1 charter high school in the area will offer student pick up and will offer study hours after school (as well as other after school activities) for families where parents work. I think AAPS does not realize how many students they may lose from outside the AATA bus area in 9th and 10th grade because of the bus decision. I also suspect that it was intended to make parents angry and cause them to agitate for more funds. Considering that the out of Ann Arbor folks were the ones that voted against the "enhancement millage", I see this as PAYBACK for that no vote.

maestra27

Thu, May 26, 2011 : 12:46 p.m.

Please contact your lawmaker. All of these cuts were unnecessary with a surplus in the School Aid Fund. AAPS, like other Michigan school districts, is only doing what Gov. Snyder and our lawmakers are forcing them to do.

Dr. I. Emsayin

Thu, May 26, 2011 : 11:30 a.m.

I wonder if there needs to be as much fretting as has been seen by the various constituents. Is there a way the district could handle these budget issues without putting every student, teacher, parent, principal on notice for many months. With this outcome, it is difficult to tell if the principal sharing was some sort of posturing. And many teachers have been telling their students and others that they may not have a job in the fall. Is all of this to get some sort of pulse on the community's priorities?

ViSHa

Thu, May 26, 2011 : 9:54 p.m.

i can understand the need to let the teachers know it could be a possibility but i don't understand why the teacher(s) would need to pass this on to their students?

grye

Thu, May 26, 2011 : 12:44 p.m.

Since the district does not have a complete list of definite retirees, they need to let those teachers who could be laid off know that the potential exists. Many teachers will not provide notice until just before school starts.