School

Financing &

PPS Budget

Informational

Presentation

Welcome and

thank you for

coming!

Welcome and thanks to our

distinguished guests:

•Representative Deb

Shaughnessy

•Senator Rick Jones

•Members of the Potterville

Board of Education

Our purpose this evening. . .

•To share information about

current school financing and

its impact on our

community’s schools

•To provide leadership for

education in the community

Our purpose this evening. . .

•To engage our community’s

varied stakeholders in this

important conversation

about the future of PPS

•To share and frame the

context of the STORY that is

impacting our SCHOOLS, our

COMMUNITY and our STATE

Important Elements of the

Story:

•The role of PPS in the

Potterville Community—a

long-standing history of

connections and service to

the community

•In many ways, these schools are the

center of the Potterville Community

and are critically linked to its

viability and its prosperity

Important Elements of the

Story:

•The economy in the State of

Michigan has been in decline

for a number of years now

•Because of that decline and

state/federal budget issues,

Michigan education funding

has been up and down for a

number of years

Important Elements of the

Story:

•As a result of that funding

roller coaster, PPS has made

significant budget reductions

and begun shared services

in the last five years

•But PPS is not a declining district; we

are growing in enrollment, we are

implementing effective school

improvement practices, and test

scores are trending upward

STATE SCHOOL AID REVENUE

STATE’S GF CONTRIBUTION TO SCHOOLS TREND

STATEWIDE PUPIL COUNTS

– Mixes School Aid Fund and GF dollars

– P-20 System (Early Childhood – Higher Ed)

– K-12 Per Pupil Foundation Rebased 2011-12

• Minimum - $6,846 ($470 cut from 2010-

11)

– ISD’s Reduced 5%

– Categorical funding eliminated

• Declining Enrollment ($27 million)

• Class Size Reduction ($19.5 million)

• ISD Special Ed FICA Payments ($15.3

million)

• Special Ed and CEPI Funding Reduced

($29.5 million)

Governor’s Budget Proposal

– Recommends 10% cost savings in non-

instructional services (equates to $300

million)

– For 2013 – Incentive for premium co-pay at

State Employee levels ($300 million

categorical)

• 90%/10% prior to July 1; 80%/20% for new

hires

– Retirement Rate – 24.46% ($230 per pupil

average)

– K-12 no longer has exclusive rights to the

School Aid Fund (shifts $896 million from K-12

to Community Colleges and Universities)

Governor’s Budget Proposal

SHARED SACRIFICE???

Bloomfield Hills 12,324$ 470$ 3.8%

Waverly 8,873$ 470$ 5.3%

East Lansing 8,652$ 470$ 5.4%

Grand Ledge 7,426$ 470$ 6.3%

Charlotte 7,316$ 470$ 6.4%

Maple Valley 7,316$ 470$ 6.4%

Potterville 7,316$ 470$ 6.4%

Michigan Businesses: Significant Tax Cuts Coming More $

HOW DO WE RANK AGAINST OTHER SCHOOLS

MEASURE PER PUPIL RANK # OF DISTRICTS PERCENTILETotal Revenue 8,731$ 443 775 43%

Total Instruction 5,145$ 455 775 41%

Instructional Salaries 4,857$ 429 775 45%

Business and Administration 1,064$ 523 775 33%

Operations and Maintenance 782$ 524 775 32%

Average Teacher Salaries 44,906$ 520 775 33%

Current Operating Expenditures 8,084$ 516 775 33%

Information taken from MDE Bulletin 1014 Report ('09-'10) Ranking 775 Michigan Schools

Other pending

legislation that may

impact Michigan

public schools:

SB 7 – (Publicly Funded Health

Insurance Contribution Act)

Bill will require that public

employers pay not more than

80% of the premium costs of

health insurance

Other pending

legislation that may

impact Michigan public

schools:

•HB 4306 – Privatize or Outsource Food

Service, Custodial and Transportation

•HB 4152 – Stop pay increases

(steps/lanes) for school employees after

their contract expires. Also, employees

would have to bear any increased cost of

insurance. Bill also addresses no

retroactivity for those items.

Current new law that

may impact Michigan

public schools:

EMERGENCY FINANCIAL MANAGER

House passed Feb. 23rd

• Senate amended and passed March 9th

• Governor signed into law March 16th

• Financial managers are being trained

• Calls for 18 triggers that can cause a

review

to be appointed by the Governor

• Review team declares amount of financial

stress

• Governor reviews and allows State

Superintendent to appoint EFM if financial

emergency

• Emergency Financial Manager can take up to

32 actions (supersede board authority,

negotiate, renegotiate, enter into contracts,

recommend reorganization or consolidation,

district going into receivership, collective

bargaining suspended)

Emergency Financial

Manager

What will the Governor’s

Proposed Budget Mean

for PPS?

•Our small fund balance

(unbudgeted dollars for the current

school year) will evaporate.

•An overall projected revenue loss

for the 2011-2012 school year of

$858,589.00—due to many factors;

this is nearly 10% of current

budget

What should PPS do to

plan for our schools’

budget for next year?

•The school board is watching the

budget process in Lansing very

closely

•The school board believes very

strongly that our district has been

highly fiscally responsible, as

evidenced by previous budget cuts, a

lean operation, and sharing services

What should PPS do to

plan for our schools’

budget for next year?

•The school board has a very

heightened concern that PPS

has very little discretion to

make any more cuts that will

not impact the classroom,

basic programs & operations,

and staffing

What should PPS do to

plan for our schools’

budget for next year?

•One option—make drastic

cuts to transportation;

athletics; staffing and

compensation; limit use of

district facilities for the

community, etc.

What should PPS do to

plan for our schools’

budget for next year?

Another option—Become a

deficit-spending district;

and after interim steps and

processes over some time,

possible appointment of an

Emergency Financial

Manager

Where do we go

from here?

•This informational

presentation was held tonight

to share this important

information with our

community, to tell the story.

Where do we go

from here?

•It is our hope that it spurs

conversation between parents,

students, staff, community

members, and state leaders so

decisions that are made in the

coming months make sense as

the story unfolds.

Closing

Questions:

•How will this story conclude?

•What social, emotional,

developmental value does the

total school experience have

for our children?

Closing

Questions:

•What role must education play

in the re-invention of our state

and its future economic and

societal development?

Closing

Questions:

•Does the State of Michigan

have a budget crisis or a

revenue crisis? Are there other

choices about how we raise

revenue and how we spend it?

Closing

Questions:

•With such significant tax cuts

planned for businesses, to be

offset by cuts to schools and

other vital services—what data

is available to show that

cutting taxes to businesses

will create jobs?

Closing

Questions:

•How do the provisions of the

Emergency Financial Manager

law fit the concepts of a

representative democracy if

elected officials’ power and

authority are dismissed

outright?

Closing

Questions:

•If Potterville Public Schools

were consolidated or closed,

how would this impact the

prosperity and viability of the

Potterville community?

Closing

Questions:

WHAT WILL YOU

DO NEXT?

Thank you for coming!