UCS officials cite state aid allocation ahead of upcoming budget

By: Eric Czarnik | Sterling Heights Sentry | Published April 18, 2017

With new budget preparation in the works, Utica Community Schools officials are calling attention to how the state of Michigan allocates money to school districts, arguing that some other school districts have benefited at UCS’ expense.

A presentation of charts and financial projections was revealed at a March 27 UCS Board of Education meeting. After the meeting, Assistant Superintendent for Business and Auxiliary Services Stephanie Eagen described UCS’s perspective on the district’s funding figures and the statewide context behind them.

Eagen explained that the school district has only seen a net $60 increase in the per-pupil foundation allowance in the past 10 years. In 2016, the figure was $7,684, and in 2006, it was $7,624, she said.

Last decade’s financial crisis, recession and the aftermath took state-derived school funding on a roller coaster. UCS’ per-pupil foundation allowance funding peaked in 2008 at $7,807 per pupil. Per-pupil funding then went flat for a while before a drastic $470 per-pupil cut was given to school districts statewide for the 2011-12 school year. From there, UCS’ per-pupil funding increases gradually sloped upward again.

“Now we’re eight years later (from the 2008 funding peak), moving into the ninth year, and we still haven’t reached that level,” Eagen said.

Eagen said that during that same decade, school districts that fall into a “minimum foundation district” category — who have been getting less in per-pupil aid — had their funding grow at a faster rate, thus rebounding more quickly than UCS did. In 2006, the minimal rate was $7,085 per pupil, but in 2016, that figure jumped to $7,511 per pupil, according to UCS’ accumulated data.

Eagen said this means that the funding gap between UCS and a minimum foundation district in 2006 — $539 per pupil — shrank to $173 a decade later.

“The dollars have been distributed by the state to provide for more increases to minimum districts,” she said. “As it relates to the difference compared to Utica Community Schools over that same 10-year period, (the minimum foundation districts) have received seven times more in increases.”

According to the presentation, minimum foundation districts make up around 84 percent of the state’s public school districts and charter schools, making schools like UCS the minority. Many of these minimum foundation districts are located north and west of southeastern Michigan, Eagen said.

Eagen’s presentation acknowledged that UCS has faced funding-related challenges, and she said schools are dependent on the state for funding. On one hand, student enrollment declined from around 29,500 in 2006 to below 28,000 in 2016, thus reducing income from per-pupil revenue. And over the last few years, the district has used its fund balance, combined with spending cuts, to balance the budget.

Looking ahead to 2017-18, UCS is projecting that the budget’s general fund could face an $8.8 million shortfall under Gov. Rick Snyder’s current budget proposal — even while taking into account $1.16 million in cost-cutting measures that the Board of Education approved March 27. Those cost-cutting measures include increasing the use of contract service staff; cutting one position each in administration, administrative support and security staff; and consolidating staff positions, according to UCS officials.

Balancing the budget to fill that $8.8 million shortfall could mean reducing the district’s fund balance from about $13.5 million to around $4.7 million, or roughly 1.7 percent of total budgetary expenditures, by the end of the next fiscal year, the presentation showed.

According to a statement from Board of Education Treasurer Robert Ross, district residents pay a 6 mill tax that goes to the state for distribution. He said it appears that southeastern Michigan is sending more money to Lansing than it is receiving while “not getting its fair share of money that we are contributing to the school aid fund.”

“If all of that money is coming out of the same pie, then they are making our slice a little bit smaller,” Ross said. “It seems like a basic question of fairness and equity of whether or not we are receiving the amount of money that we should be.”

Eagen said she believes the state’s leveling of school aid across districts is an intentional strategy that could further continue. She said UCS officials are speaking and working with local lawmakers to address the issue.

Over at Chippewa Valley Schools, Superintendent Ron Roberts described his school district as the largest minimum foundation district in the state. He said he believes that schools in general are underfunded across the state, adding that he agrees that UCS needs more money — and so do other districts like his.

“This is all a result of Proposal A in 1994,” he said.

“When they set the funding levels in 1994, one of their commitments was to close and eliminate the funding gap. And we are 23 years later, and we still have a significant gap. … They have an obligation over time to close this gap, and from my point of view, they are closing it too slowly.”

Roberts said that among the competing school funding proposals being debated in Lansing, the governor’s proposal would “take decades” to close the funding gap. Roberts suggested that the state provide an annual funding increase to all school districts based on inflation and then provide additional aid to close the funding gap between minimum and nonminimum foundation districts.

“After providing an inflationary increase, they should bring an increase to close the gap,” he said, “but all school districts need to at least meet inflation in their budget on an annual basis in order to meet the needs for next year, and that’s not provided.”

The state legally requires school districts, including UCS, to have a budget in place for the next fiscal year by July 1.

Find out more about Utica Community Schools by visiting www.uticak12.org or by calling (586) 797-1000.