Think Rice

Before reading the rest of this post I encourage you to pause and read the “official” letter from the School Board President, addressed to Flat Rock Community on these matters. Then come back and read my “unofficial” commentary.

I’m probably not enlightening anyone when I say Michigan is in unprecedented economic times. As you can see in the graph to the right our unemployment rate (compared to the US average) alone tells most of the tale.

This simple economic factor alone impacts every aspect of Michigan life—including our education system.

I get a lot more phone calls and emails these days. And I’m grateful for your trust in electing me to the School Board and your diligence in holding my feet to the fire for my promised transparency.

Having said that, I want to give you a little more information. I want to give you a better picture of the budget process the Flat Rock School Board is currently moving through; better insight into what it takes to get to a State mandated balanced budget for the 2010/2011 school year.

Michigan Public School Budget Basics

Lets begin with the fundamentals that drive a Michigan public schools’ operating budget.

First, there is revenue. Unlike many States, very little of our revenue is derived from local property taxes. This was the result of 1994 legislation that changed the way Michigan education is funded, often referenced as Prop A. The wisdom of this change is still debated today (see “Are Schools Underfunded?”).

Regardless of the politics, the facts of the matter is that nearly 83% of school funding is derived from sources directly linked to personal or discretionary income (re-reference the unemployment graph above). Here are some rough numbers that made up the 2008 School Aid State revenue, which is 78% of how Flat Community Schools funds operations (revenue sources):

• Sales and Use Tax (42%)
• Income Tax (19%)
• State Education Tax (16%)
• Lottery Profits (6%)

This closer look at where our educational dollars come from probably makes the $337 per pupil reduction in State funding less surprising.

One last note on revenue: As for all the promises of Federal money to save local schools, only 8% of our projected 2010-2011 school budget is expected to originate from Federal sources. Even President Obama’s “Race to the Top” education life preserver is only projected to contribute $119,000 to the Flat Rock schools budget (a long way from $1.15 million gap we need to close)—and that assumes Michigan qualifies for the special funding.

Now let’s move to the expense side of the budget.

Most of our expenses go directly to the core instruction of students (as it should be) in Flat Rock Community Schools, approximately 68%.

Sliced another way 81% of our budget is paid towards wages and benefits, which are primarily “locked in” expenses in accordance with various collective bargaining agreements.

With these high-level numbers you can see the challenges ahead in balancing this budget. We have been asked to balance a $17.9 million budget with a $1.15 million short-fall.

Flat Rock Community Schools Budget Process

This brings you up to speed with the budget environment and the constraints in which the the School Board is operating. Now I want to talk about our budgeting process.

I’ll start with a bit of an apology. Like I mentioned in my opening paragraph, these are “unprecedented economic times.” This the first time Flat Rock or this School Board has been handed a budget shortfall this significant. As we have embarked on this unique task we have stumbled in clearly communicating and getting every stakeholder notified. We continue to work on learning from our mistakes and improving this process.

However, here are several things we have done thus far to make sure you are part of the process and that help equip each School Board member with a deep understanding of the budget. We have over the last several weeks:

• Conducted community and school employee surveys
• Held two special open School Board work-study sessions
• Held one special closed School Board session to review collective bargaining agreements
• Each Board member has actively done personal due diligence with constituents and stakeholders

This process has given the School Board valuable insight into the most critical components of preserving Flat Community Schools high quality of education and guiding us to where we need to proceed for expense reduction.

I know this process seems slow and frustrating, but it’s important that we proceed in a prudent way. Doing this right now will make all the difference in our children’s future.

What’s Next?

I’d like to tell that we’re done, but we’re not. No final decisions have been made, but a very specific path has been laid by the School Board and communicated to the Administration.

At the next regularly scheduled School Board meeting (next Monday, 2/8 at 7:00 pm in the Community Building) we will take another step in gathering additional numbers. Specifically, we will seek to gather comparisons with our current operating methods and begin the process of working with our collective bargaining units.

What’s most important are the guiding principles that were outlined by our School Board President, Norm Haase:

“We each realize that our purpose is to educate our children. This education involves not only the core classroom subjects, but also the other activities that help them develop in the great citizens we need them to be.”

and

“[Our goal is that]…our students will not even notice that we have made cuts.”

In the end, I hope that you know we are working hard and carefully to make the best decisions for your children and the community of Flat Rock, MI.

As always, never hesitate to contact me with questions or thoughts—I represent you!