Okemos School Board facing potentially devastating budget cuts

By: Andrew Atwal

Oct. 18, 2010

OKEMOS, Mich. — The Okemos School Board met on Monday, Oct. 11 to discuss, among other things, the potentially very large  budget cuts that could wreak havoc on the schools’ operation in the years to come.

Catherine Ash, interim superintendent of the Okemos Schools, and Robert Clark, director of accounting services, talked about the budget cuts the schools could be facing within the next several years.

On a more positive note regarding the budget, the federally funded Education Jobs Bill, or EduJobs, is awaiting Governor Jennifer Granholm’s signature. If passed, Okemos would receive $23 per pupil, for a total of $92,000 for the district. The bill’s purpose is to give funds for salaries and benefits of building level staffing. Clark said Okemos would be “happy to receive the funding.”

In addition to the $92,000 from EduJobs, there is also a onetime additional federal funding allotment for Okemos as well. This would add $710,000 (allocated amount of money for the school district on a per pupil basis) for the 2010-11 school year  but is only a onetime allocation. “This helps us this year, but has no provision for future years,” Clark said.

However, there are many negatives for the future school budgets as well.

First off, the Michigan Public School Employees retirement rate is set to go up from 19.41 to 20.66 percent on November 1, 2010. This rate is up from 16.94 percent in 2009. The increase in retirement rate has a negative impact the Okemos budget of $285,000. Because the rate is state imposed, local school districts cannot opt out and are forced to abide by the state mandated retirement rate increase.

The retirement rate increase also comes with increased payment for retired workers’ health care costs. With the health care costs, and other related expenses factored in, the impact to Okemos ends up being about $4.25 million in 2021, which is double the 2009-10 employer retirement costs.

The Okemos school board budget sees another reduction in funds of about $1.4 million due to Michigan funding trends; for 2011-12, Okemos will not see any American Recovery and Reinvestment Act funds and no EduJobs funds.

However, Dr. Ash and Robert Clark are working on a financial contingency plan.

The plan came to be because of the potential for additional financial challenges in 2010-2011. The first step of the plan is the preliminary work of the Board and Leadership council which seeks the voice of community members on the issue. The second step is to update the Okemos Board of Education, community members and employees (which is the stage they are currently in and will be until June), and the final step of the process is to utilize the opinions and the plan in 2011-12 budget decisions.

Some of the possibilities the board is considering to increase revenue to the school district are by selling and renting property, applying for grants, and developing “magnet” programs such as instructional and program planning.

Additional possibilities include expenditure reductions. The board is considering transportation cuts, cutting some extracurricular and athletic programs, reducing personnel, cutting employee salaries, instructional cuts such as eliminating standardized tests and the programming of the fifth and sixth grades, and by consolidating school districts, a drastic measure which would have to be approved by both potential districts.

“These are devastating concepts to look at,” Ash said. “The cons are going to far out weight the pros.”

“There are unknowns facing us (Okemos).” Unknowns that the school board hopes to take on ahead of time through their financial contingency plan and by considering all possible budget and economic options.

 

This IS the full article