Revenue report: Budget outlook $8.67M brighter for Ann Arbor Public Schools
Editor's note: This article has been edited to clarify that the new budget projects include staff salary cuts. Updated revenue projections and staff salary cuts for the Ann Arbor Public Schools in the 2013-14 school year indicate the district will need to cut nearly $9 million less than it anticipated about six months ago, district officials said Wednesday.
Initial projections left the Board of Education and district administrators grappling with a $17 million budget hole that would need to be cut from its operations. New revenue estimates now indicate the deficit is $12 million, which has been partially offset by $3.4 million in salary cuts agreed to by district staff in March.
The Ann Arbor Board of Education
Courtesy AAPS
The information was a part of a revenue report from Hoover Wednesday night at the Ann Arbor Board of Education’s regular meeting.
It’s the first of two reports on the 2013-14 budget outlook, as the next will be April 24 on expenditures.
“It is still nearly $9 million in cuts … I don’t think we quite even know how we’re going to get to $9 million,” said school board President Deb Mexicotte, noting, “This is a much-improved outlook.”
Budget proposals are being floated at the state level by Gov. Rick Snyder, the Michigan House of Representatives and Senate that each contain different levels of funding for schools in the state, adding a certain degree of uncertainty to Hoover’s revenue projections.
Per-pupil state funding, or foundation allowance, is projected to remain the same as it has for the past three years at $9,020 per student. There are about 16,269 students in the district.
The district’s $180.59 million projected revenue for its general fund in 2013-14 is comprised as follows:
- $145.9 million in foundation allowance
- $2.84 million from local sources, including $800,000 from pay-to-play and athletics, $1 million from the parking project and $500,000 in tower rentals at school facilities
- $13.53 million in state sources, most of which comes from special education reimbursements and retirement funds
- $18.32 million in inter-district and financing sources, most of which comes from special education reimbursements
Spending for 2013-14 projected to be $192.66 million. Of that figure, the district will save $3.4 million in concessions made by three unions, resulting in total net spending of $189.26 million.
Ann Arbor Public Schools Superintendent Pat Green thanked the union members Wednesday for taking salary cuts.
Green told AnnArbor.com in a March interview that she would accept a cut to her $245,00 salary to help balance the budget.
The principal's union has called for a $50,000 reduction to her salary.
In November, initial budget projections showed a $17 million deficit that would have to be cut from the district’s operations.
The board had asked for an early budget projection at that time as it was concerned that the district would be facing a large impending deficit in the 2013-14 budget cycle and wanted to prepare accordingly.
“At that time we were told by our administrative staff, appropriately, that the revenue projections included a lot of unknowns. … We were following our due diligence in asking for a budget early in the year,” said Trustee Andy Thomas, noting that even cutting $8.67 million instead of $17 million will still be tough.
Fluctuating state reimbursement rates for certain programs have accounted for the majority of the positive change in the revenue outlook for the school district.
AAPS administrators have yet to present a budget proposal and have not made decisions regarding programs or schools that would be up for elimination or reduction.
A number of music, theater and athletic programs, as well as school operations, have been scrutinized in the mean ime.
As operations at Roberto Clemente Student Development Center in Pittsfield Township are again under the magnifying glass during the budget development process for the district, school board members voted late Wednesday night to place an item on a future board agenda to discuss the school. The motion was made by Trustee Susan Baskett.
The revenue outlook could change once again for the AAPS as various state budget proposals have been floated.
Per-student allocations through the Best Practices Incentive Funds would be reduced from $52 to $16 under Gov. Snyder’s proposed budget, which would also add more requirements for schools to meet in order to receive the money.
“We have had to jump through hoops to get the Best Practice Incentive Funds … and now they want to cut it down to $16 per student?” said Trustee Simone Lightfoot.
Lightfoot said she was concerned that meeting the additional requirements would cost the district more than it would receive through the program in 2013-14.
The reimbursement rate in the previous 2011-12 school year was $100 and had fewer stipulations than the number required now for receiving the funding.
The school district has been hosting a series of community dialogs on the budget to engage the public in the process. The final two are:
- 11:30 a.m. to 1:30 p.m. Tuesday, April 16 — Fourth Floor of the Ann Arbor Public Library, 343 S. Fifth Ave. Board members expected to attend: Irene Patalan, Glenn Nelson and Deb Mexicotte.
- 9 to 11 a.m. Saturday, April 20 — Scarlett Middle School Media Center, 3300 Lorraine St. Board members expected to attend: Susan Baskett, Nelson and Mexicotte.
Amy Biolchini covers Washtenaw County, health and environmental issues for AnnArbor.com. Reach her at (734) 623-2552, amybiolchini@annarbor.com or on Twitter.
Comments
Topher
Sat, Apr 13, 2013 : 4:43 p.m.
Does AA.com know if the administrators' union has proposed/taken a similar 3% cut? What about Balas employees?
Bulldog
Fri, Apr 12, 2013 : 12:01 a.m.
What a slap to the teachers! Perhaps they won't need to give back 3% after all to help out! Still waiting to see what principals are giving back as well as BALAS administrators!
jns131
Fri, Apr 12, 2013 : 1:30 a.m.
I could not agree more. Balas can be really trimmed to meet the budge needs but yet, still they protect their own and hack off the knees of those who are just the spokes. Sad really. Can't wait to see what the union proposes we pay the next sup. Transportation lost big time when they hired that lady in. Had to pay her somehow.
local
Thu, Apr 11, 2013 : 9:25 p.m.
Dr. Green resigns. YEAH for AAPS Anxious to hear how much next Super will get hired in for!!!
A2Girl63
Thu, Apr 11, 2013 : 9:16 p.m.
Great news Dr Green is retiring. Maybe they can bring in a superintendant with a fair salary for our district.
mady
Thu, Apr 11, 2013 : 10:41 p.m.
Yes, Dr. Green, can i help you clean out your desk? i have many trash bags....
DonBee
Thu, Apr 11, 2013 : 8:49 p.m.
I took the time to view presentation, the country web site on taxes and valuation, and several other sources. The AAPS presentation on revenue is at best incomplete. Title 1, Title 2 and other monies are missing from the total, so are medicaid monies that AAPS is pursuing aggressively for special education services in addition to county and state money. The sinking fund - just a few dollars a year (about 25 million in fact) is missing, so is the bond fund revenue. Then there is the money from the pre-school, the after school care, the lunch program, and a couple dozen other revenue sources (including revenue from ticket sales to athletic events and concerts for instance). Once again AAPS staff focuses on state funds and leaves out MILLIONS in other revenue. Yes, some of it is restricted. We understand that, but this money also goes to fund the schools. It would be interesting to see an HONEST and COMPLETE revenue report sometime from the administration.
A Voice of Reason
Thu, Apr 11, 2013 : 3:44 p.m.
Well, I say make Community High School and Robert C. charter schools. If parents want to pay for the extra luxury of educating their kids there, then they can. The school district could kick in the extra money for scholarship for those who cannot afford it with our AAPS Community Foundation money (ha ha). If it cost more for Community High than it does for other schools, then parents should have to pay the difference. It is shameful that we have such a huge learning gap and 100 students per year (plus the 25 political favors) get to go there and my guess is that they would do the same regardless of where they go. Look at the MEAP scores of the kids going there--they probably pass the MEAP and are not at risk. Plus, my statistic classes say that having 3 or 4 kids from the same family getting in shouldn't be possible. Why doesn't someone investigate what is going on there. Seems like a higher than average percentage of a certain feeder school applicants get in. Seems like a great research project for a college student. Let's talk transparency. Why aren't people in town outraged by Community High students getting to participate in all the best of AAPS (can be on sports teams, take AP classes, get a top college counselor -you should put him at Pioneer, Huron or Skyline if you want to be fair. He has only has 100 kids a year vs. 300-400 at the other schools. Why aren't people outraged by this game? The elite and vocal people in this town know they are getting something great for free and they are pacified. Give up your child's spot if you are truly about all students.
Thoughtful
Fri, Apr 12, 2013 : 1:10 a.m.
The top college counselor has the whole school. Get a grip. He is the ONLY full time counselor at Community, while the other one is very part time. So he probably has MORE kids than other school counselors. There are definitely at risk kids at Community, which you would know if you had a clue. Sorry, I'm not elite or vocal- my kid got in through the lottery, like everyone else.
Rod Johnson
Thu, Apr 11, 2013 : 10 p.m.
On top of all the other ways you're wrong, as noted by the two commenters above, if your statistics classes tell you "having 3 or 4 kids from the same family getting in shouldn't be possible," you need to ask for a refund on your education.
SuperiorMother
Thu, Apr 11, 2013 : 5:19 p.m.
"Well, I say make Community High School and Robert C. charter schools. If parents want to pay for the extra luxury of educating their kids there, then they can. The school district could kick in the extra money for scholarship for those who cannot afford it with our AAPS Community Foundation money (ha ha)." FYI, charter schools in Michigan are free public schools. The only additional costs to parents compared to sending kids to their neighborhood schools are transportation (if not provided by the school district) and uniforms, if the school requires them.
DonBee
Thu, Apr 11, 2013 : 4:07 p.m.
Of the 6 high schools - AATech, Roberto Clemente, Skyline and Huron are all more expensive per student than Community. Only Pioneer is cheaper. Now, what we don't know is where the transportation costs between Community and Huron are placed, how much of the online support costs are in the Community budget as opposed to being scattered to the schools the students attend and other details that can move the numbers for Community up or down by as much as 20%. The lack of transparency again confounds the discussion.
elise
Thu, Apr 11, 2013 : 12:20 p.m.
This is great news! Now the principals and administrators at Balas can continue to collect their current salaries and bonuses...maybe even give themselves a raise. In the meantime, teachers, TAs, and secretaries take a 3% cut. When will it be their turn to step up and take one for the team? The still remain silent on this issue.
Chester Drawers
Thu, Apr 11, 2013 : 6:24 p.m.
Mr. Bee, I don't disagree with you at all. Just trying to get the facts correct.
DonBee
Thu, Apr 11, 2013 : 3:15 p.m.
Mr Drawers - And about 1/3 fewer students per building now that Skyline has all 4 grades in it. Also fewer locations for students to wander about with the re-configuration of Pioneer and Huron and the removal of the portable classrooms at both. So fewer administrators is probably warranted. If you count the total non-classroom staff in each high school - I think you would be surprised.
Chester Drawers
Thu, Apr 11, 2013 : 1:27 p.m.
The comprehensive high schools currently have 2 grade level assistant principals and secretaries, not 4 as they did in the past.
Tex Treeder
Thu, Apr 11, 2013 : 12:54 p.m.
Agreed. Time to cut the administrative overhead, both at Balas and at the schools. Does every grade in a high school really need a vice principal? Does a high school need an athletic director? Is our current superintendent worth $250,000? I say No to all three questions. On the other hand, let's not throw out the baby with the bathwater. Clemente may seem expensive, but it works. CHS actually has a lower per-student cost than one of the warehouse high schools (Pioneer, I think) and provides a great alternative.
Silly Sally
Thu, Apr 11, 2013 : 11:29 a.m.
Ladies, grab your purses, men, hang onto your wallets. Deb and Pat are desperate for more money, since they have done such a poor job living within their means. Something the rest of us are supposed to do. Oh, I know, pass a millage, and have the vote when non-taxpaying UM students are around!
Brad
Thu, Apr 11, 2013 : 12:39 p.m.
Poor persecuted students!
ahi
Thu, Apr 11, 2013 : 12:34 p.m.
@chris, more than their share since renters dont get the homestead deduction.
ChrisW
Thu, Apr 11, 2013 : 11:50 a.m.
2/3 of UM students live in apartments and most certainly pay their share of property taxes in rent.
Goober
Thu, Apr 11, 2013 : 11:06 a.m.
Doom and gloom are on the horizon, yet Deb believes - "is a much-improved outlook ". Go figure!
A2comments
Thu, Apr 11, 2013 : 11:06 a.m.
Of course the unions also succeeded in bypassing the new Right to Work law, so non-members will still have to pay shop fees for years to come.
leaguebus
Thu, Apr 11, 2013 : 11:43 p.m.
I thought the members of the Union voted on the contract? If they did then the Unions did not bypass anything. By Federal law any member of a Union does not have to pay dues if they dont want to.
A Voice of Reason
Thu, Apr 11, 2013 : 3:32 p.m.
Legally negotiated a contract under the state law holding union members hostage and locking them into a union forever. I feel sorry for the teachers in this town because they were sold out by their union and the AAPS. Why not negotiate the contract later in the year when we know the numbers.
AMOC
Thu, Apr 11, 2013 : 2:05 p.m.
sh1- I thought the new contract ran for 5 years, and explicitly continues the open-ended requirement that 75% of any "new" revenue from any source be given to the teachers as either pay increases or reduction of the proportion of health insurance costs paid by teachers. I for one will actively campaign against any enhancement millage as long as that clause remains in the AAEA contract or a separate Letter of Understanding.
sh1
Thu, Apr 11, 2013 : 11:37 a.m.
It's a one-year contract. Teachers took a pay cut. Not sure what you have to complaint about.
Chris
Thu, Apr 11, 2013 : 11:34 a.m.
They didn't bypass anything. They legally negotiated a contract under the then state law.
Stephen Lange Ranzini
Thu, Apr 11, 2013 : 10:49 a.m.
"Spending for 2013-14 projected to be $192.66 million." Revenue is project at $8.67 million less or $183.99 million. The Ann Arbor school board passed a budget for fiscal year 2012-13 which had expenses of $188.46 million and revenue projected at $182.42 million and a deficit of $6.04 million. So, year to year, revenue went up $1.57 million, but costs went up $4.2 million. It would be helpful if these figure are provided in articles about the AAPS budget discussion in the future to give readers a better understanding of the year to year trends in revenues and expenses.
Susie Q
Thu, Apr 11, 2013 : 11:29 a.m.
AAPS overspent for the current school year and dipped into their "savings account" to pay for it. They were unwilling to make cuts last year because it would have been very difficult politically. The Board had just given the new Superintendent a HUGE raise, allowed her to hire central administrators that were offered salaries in excess of who they were replacing, created a new Deputy Superintendent position (or filled one that had been vacant for 3 years) and handed out the "2 am raises" to current employees who were going to be bringing in "extra revenue" by farming out their services (and giving them fancy new titles). I wonder how that has worked out? How much extra money have they brought in?
thorj97
Thu, Apr 11, 2013 : 10:39 a.m.
Any revenue estimations before the impact of the multi-million dollar cuts are know have to be considered very preliminary. Unwise expense cutting will also lower revenue by increasing the number of students leaving for charters. Hopefully the estimated savings numbers presented to the Board will be savings after the estimated revenue loss.
Wondering
Thu, Apr 11, 2013 : 10:19 a.m.
Does the 3.4 million the unions have agreed to slash the 8.67 million to 5.27 million ? Or is it 12.07 million with the 3.4 million already removed?
DonBee
Thu, Apr 11, 2013 : 2:59 p.m.
Wondering 12.07 less the 3.4 leaves 8.67 million. Numbers are in flux because of differing bills in Lansing and non-final projections for various local tax revenues from property taxes. Normally the revenue projections tend to error low, so the final total for cuts will probably be less than the 8.67 million. Of course, technology millage, sinking fund, federal funding and a lot of other categories were not included in the numbers projected in the article. Some of this is restricted to specific uses, but there is more than $20 million that is not included in this article.
Goober
Thu, Apr 11, 2013 : 11:57 a.m.
The BOE does not know how to plan, forecast nor manage.
local
Thu, Apr 11, 2013 : 10:56 a.m.
Cuts the deficit to 8.67 million. But the BOE still has to figure out what their plan is going to be because I am guessing they will be facing the same situation next year as well. BOE, their are things out there you can cut, you need to make those tough and often unpopular decisions. Because if your plan is to ask employees to take pay cuts year after year to help, I just don't see that being feasible. The BOE needs a long term plan on how they are going to deal with this and this discussion needs to start now. Our plan for this year is this...... If we need to do it next year we plan on doing this....... Time to start planning accordingly.