When school boards and administrators finalize a general fund budget each year, they typically aren’t waiting for a final shoe to drop.
But that’s exactly what happened Monday night when the Dearborn Public Schools Board of Education approved its 2012-13 general fund budget.
The district, which is assuming a pension contribution rate of 24.46 percent, was expecting the Michigan Legislature to act on preserving the current rate as opposed to a scheduled increase of 3.27 percent, but the legislature left Lansing for its break without deciding the issue.
If increased to 27.73 percent, the district will have to pare $3.5 million from the budget it just approved.
“I’m disappointed that they left without acting on this,” said Dearborn Schools Supt. Brian Whiston.
“We have to file our budgets by July 1,” he added. “There are 500 school districts in Michigan that need to know how this is going to go.”
The Michigan Legislature is expected to return to Lansing in July, but it’s unclear when the measure will be taken up.
On June 11, Linda Kempton, who is acting as the school district’s business service director, . The budget leaves little room for items like capital improvements and discretionary spending.
According to the district, about $39 million in local revenue and $125 million in state revenue will flow into district coffers, along with $4 million in incoming transfer funds and $150,000 in athletic fees.
On the expenditure side, the district will spend about $97 million on salaries and wages, $50 million on employee benefits, $782,419 on capital improvements, $2 million on debt retirement and $1.8 million on athletics.
The district also closed the books on the 2011-12 fiscal year, which ends June 30. The $170 million budget was dealt a blow in the final weeks of the fiscal year because of uncollected taxes from the city, which increased its year-end deficit from $1.1 million to $2.2 million.
A series of cuts, including discretionary spending, cancelling new band uniforms, and delaying $700,000 in physical improvements at the athletic field, made up the difference, Whiston said June 11.
But pensions–the bain of districts that has created a perfect storm of employees retiring en masse just as school revenue fluctuates wildly–remains a concern for 2012-13.
“If the increase the rate, then we will submit an appropriate plan for approval,” said Whiston.