April 13, 2007

State warns of school cuts

State warns schools of cuts
Friday, April 13, 2007
By Judy Putnam
Lansing Bureau

LANSING -- School budgets could be slashed by $90 to $125 per pupil even as the school year draws to a close, the state budget director said in a warning letter to school officials.

Hoping to apply 11th-hour pressure on lawmakers, state budget director Robert Emerson late Thursday e-mailed letters to school administrators and school board presidents warning of cuts to take effect in June.
Emerson said the School Aid Fund deficit, thought to be $377 million, is short an additional $100 million to $150 million.

Gov. Jennifer Granholm in February proposed a series of remedies to avoid cuts to schools, including a 2 cent excise tax on services. Granholm, a Democrat, said she needed the tax passed by April 1.

But lawmakers, even in the Democratic-controlled House, have ignored most of the proposals.

“I see this as the governor kind of calling their bluff and saying, we’re either going to move forward or not,’’ said Don Wotruba, a lobbyist for Michigan Association of School Boards.

He said cuts so late in the school year will be devastating, but schools are required to finalize their budgets for next year soon -- and they don’t even know how much they’re receiving this year. The minimum per-pupil grant promised is $7,085 this year, or $7,108 when a $23 payment for low-funded districts is counted.

The GOP-controlled Senate did adopt some changes proposed by Granholm last month, including a change in how pension funds are counted, that would reduce the School Aid Fund problem. The Senate called for a $34-per-pupil cut instead of the tax increase proposed by the governor. That cut would not cover the new shortfall, however.

House Democrats have instead proposed a utility tax to avoid cuts, but the plan has drawn widespread criticism and hasn’t been formally introduced.

Legislative leaders said Thursday they were working on a solution. Senate Majority Leader Mike Bishop, R-Rochester, said the Senate has proposed a deficit-reducing plan while the House has not addressed the problem.

“We have yet to see an alternative plan from Democrats,’’ Bishop said in a statement.

Dan Farough, spokesman for House Speaker Andy Dillon, D-Redford Township, called the budget problem “an unprecedented fiscal crisis’’ and said Dillon was working around the clock to resolve it.

Meanwhile, Emerson’s letter urged school officials to pressure their lawmakers.

“You should contact your legislators and encourage them to work with us to avoid (cuts),’’ it said.

Tom White, executive director of the Michigan School Business Officials group, said schools will be forced to dip into reserves if cut.

“Schools that don’t have reserves will go into deficit,’’ he said. “We need to see legislators sitting down and working through these very complicated and controversial issues and coming to a solution.’’

A survey conducted by his office in January predicted 10 percent of school districts -- about 60 -- would be in deficit-spending if they were cut $100 per pupil.

Brad Biladeau, a lobbyist for the Michigan Association of School Administrators, said schools are stuck if cuts happen.

“The reality is, we are just a little over a month from close of books for the school system,’’ he said. “We have no room to make these cuts.’’

-- Contact Judy Putnam at (517) 487-8888 x232 or e-mail her at jputnam@boothnewspapers.com.

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