Why are local schools in red ink?

Ron of Spring Lake asked, "How did the Grand Haven and Spring Lake school districts become involved in deficit spending?"
Mark Brooky
Jul 17, 2013

 

Ron further asked, "Why do they feel that the state should bail them out? Could the schools not use reserve money to keep the most important educators (teachers and paraprofessionals) teaching this coming school year? Were salary increases given to any school personnel for the 2013-14 school year?"

ANSWER:

I asked the superintendents of the Grand Haven and Spring Lake school districts to help me with the answer, and both offered extensive and passionate explanations.

Keith Konarska, superintendent for Grand Haven Area Public Schools, said the primary reason for the Grand Haven district’s "budget challenge" is the state's unprecedented $470 per-student funding reduction made the past two years, which aligns funding with pre-2005 levels.

"When this is considered, on top of the all-but-required program expansions such as all-day Young Fives and kindergarten programming, significant financial challenges were created for all districts," he said.

Dennis Furton, superintendent for Spring Lake Public Schools, had a similar response. He cited the reduced state foundation allowance, which is the district's primary source of revenue, coming at the same time that the retirement rate was increased. 

"The result was a net decrease to available funds of almost $750 per pupil," Furton explained. "That equates to more than 10 percent of our revenue from the state. On the heels of that net reduction in available funds, the state mandated all-day kindergarten, which further eroded our ability to balance the budget by reducing by half the revenue we receive from kindergarten enrollees. That equated to a $182 per-pupil reduction."

Given those factors, Furton said the SLPS staff conceded a great deal in terms of wage freezes and insurance concessions. In addition, the district has looked to share several administrative positions with neighboring districts and has privatized its custodial staff — "to name just a few of the efficiencies we've implemented."

"However, some reductions to professional and non-professional staff have been necessary," Furton added. "These reductions have been kept as minimal as possible, though it is accurate to state that reducing paraprofessional support will absolutely impact classrooms and students."

Furton said the district has balanced its budget by utilizing its fund balance. However, these reserve funds are reaching a point that they may no longer be enough to avoid borrowing at peak times during the fiscal year, he said. The school board has made it a priority that the district avoid a need to borrow.

Furton said no SLPS employees have been granted a salary increase for the 2013-14 year.

"And, finally, we are not asking for the state to 'bail us out,'" he said. "We are seeking a return to investing in public education at levels that sustain what is working. We know that our system is succeeding in its mission to educate our schoolchildren. We need the state to recognize that education is an investment."

Konarska said they do not consider a restoration of the $470 per-student funding reduction as “bailing us out.” He said a restoration of these dollars would be significant in eliminating deficit spending. 

"Grand Haven Area Public Schools has maintained the integrity of our programs by identifying efficiencies away from the classroom and expanding alternative revenue," Konarska said. "The result of these efficiencies has allowed us to put money aside each year by adding to our fund balance — in essence, reserving dollars for a rainy day. We have utilized these fund balance dollars over the past few years to balance our budget and offset funding reductions. Unfortunately, in doing so, we have spent down our fund balance to a low level."

Did the Grand Haven district have salary increases for the coming school year?

"Yes," Konarska replied. "When employee contracts for the 2013-14 school year were negotiated over a year ago, our staff agreed to significant concessions — including taking a wage reduction or freeze, contributing 20 percent toward health care premiums, and paying more toward retirement costs in exchange for a modest increase this year that is partially offset by those concessions.

"In addition, the state indicated that increased revenues would be directed towards K-12 funding," the Grand Haven superintendent continued. "Unfortunately, the expected increases in K-12 funding for the coming year did not occur as increased state revenues were, for the most part, directed toward early childhood and colleges."

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Comments

gordbzz231

that's why i oppose contracts and unions, you can not control the costs even if you wanted to, the staff and employees get paid according to contract even when the school is broke or bankrupt, much like the banks still paid bonuses even tho they said there was no money, another instance is where a local manufacturer closed its doors, building was locked, in few months they reopened under a new name, this time no contracts and union and took a $2.00 an hour cut, just saying !!!

BTL2A

When you look at a wage freeze, increasing contribution to their Heathcare and retirement, all employees essentially took a paycut. Not to mention a great number of teachers use their own money in the classroom. I know some that buy supplies for the kids that can't afford it themselves.

It's hard to stay in the black with increasing cost (utilities, books, transportation cost, etc) and decreasing revenues.

It will cost you personally a lot of money if we allow the schools to fail, or drive away all the good teachers for cheap ones. Just look at the home prices of houses on the same street, the ones in SL school district a valued higher than the ones in Fruitport.

Zegota

Again look at the facts, what is the average wages of local teachers today, and not including the steps that automatically increases teachers salaries. Or the educational benefits that are usually offered by school districts, then include the summers and special days off during the school years. Not saying teachers are not worth the financial investment I am saying that I am tired of hearing that teachers have it so bad. Peace.

BTL2A

I don't think anyone says they have it bad, but it's not like a teacher is just raking in the cash.
Seems like I saw the range was somewhere between 40-80k depending on years and education. In the SL/GH area.

The high end is with 25+ years and a Masters + 25 or more credits.

Seriously in the private sector you are most likely at the very low end of pay with those credentials.

Yes they have summers off, but they also have less to no freedom to take vacation during the school year. (outside of holiday closures).

I never see anyone saying we should give the teachers large bonuses when they schools have a surplus year, so why should they have to pay incase of a deficit.

It's not normal business. They are forced to take and educate all the kids regardless of how much money there is. If you have so many kids you need enough teachers and resources to teach them.

gordbzz231

yet they want new schools, spring lake and grand haven, even looking to expand, dont make sense

Vladtheimp

The next logical question is "Are the schools authorized by law to indulge in deficit spending"? In most situations of which I am aware, municipalities are not permitted to enter agreements that would cause them to exceed their budgets, just like most states have to balance their budgets, since they can't print money like the feds. Also, do the school systems have the authority to "borrow" to make up shortfalls? The school superintendents non-answers seem to assume they have these authorities - I would seriously question that.

AtomicRooster

Maybe Konarska and Furton ought to take a look at their big FAT overpaid salaries is why there are deficits and stop putting all the blame on Lansing. They're both experts at passing the buck. They are both overpaid. You know it, and I know it. Why are the taxpayers in both districts living in denial about this? Do you think for one millisecond either one of them is going to step up to the plate and be a man for change and take a salary cut to help the districts? Don't hold your breath on that one. You'll be blue in the face with paramedics standing over you trying to resuscitate you first. Gosh we wouldn't want to break up their merry momentum of a lifestyle only you and I will only get to dream about. In the Southern states they don't cry budget deficits. They only have ONE Superintendent per county. Not one for each school district. Let me repeat that just in case you had your "Selective Hearing" on. ONE Superintendent PER COUNTY. If Michigan would do the same there wouldn't be any deficits. The old saying goes; Too many chiefs and not enough Indians.

Creedance

So you want one superintendent for Holland, Spring Lake, West Ottawa, Coopersville, Grand Haven, Allendale, Hudsonville, Jenison, Zeeland and the other 82 public elementary and junior high schools?

AtomicRooster

You catch on fast.

biped

Atomic, I worked for a school district in Maryland that covered the entire county. One of our superintendents was convicted of fraud! On top of that, it was a bureaucratic nightmare. One district per county is not the answer.

Tri-cities realist

I'd suggest applying half of the energy you expend on complaining about those who have success, on some marketable endevour, and who knows, you could become financially successful too. Even if you don't make a ton of money doing it, I'll bet your outlook on life will improve, heck it can't get much worse, right?

If each district's deficit was less than $100,000, then your argument might hold some water, but doing some quick estimating, I'm guessing the figure is more like $3 million or so for GHAPS (-$500 per child X 6000 students). Although, instead of combining all of Ottawa county's Superintendents, there may be some merit in combining a few districts, such as GH, SL, and Fruitport. That would probably save a quarter million or so.

AtomicRooster

Cheap shot I see you taking here at me but I don't see any logical or intelligent remedies for the current problems in the deficit department. Your lips move but we can't hear what you're saying. When in doubt character assassinate the other guy to make yourself look good. Talking to someone like yourself is the same as talking to sock puppet and you have the cranial capacity that of the common caged canary. Can't you do any better than that? My advice to you is simply this; keep your pie hole shut until you do have something intelligent to say which in your case will be never.

Creedance

Yeah, TC, you need to follow the profound examples of this guy's posts!

dancingliberal

Guess you should have set higher goals for yourself AR. With a little foresight and hard work, you could have had a better paying job. You could have been financially successful if you just would have thought about your future and set some goals. You reap what you sow baby. Your crybaby attitude and being a hater is awfully unattractive. Never to late to start working smart.

AtomicRooster

Got me all figured out do ya? These kinds of comments amuse me especially from imbeciles like yourself who don't know me nor have never met me as well. You definitely need to grow up. What are you? About 2? One would say so the way you write.

dancingliberal

A wealthy, happy 2 year old. :)

Say no to new taxes

Millage for the Grand Landing fiasco, millage for infrastructure passed a few years ago, now more millage for infrastructure to be proposed in November. Now the schools are starting the drum for more millage in Spring of 2014. When does it end?

Lanivan

Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.
—Benjamin Franklin, in a letter to Jean-Baptiste Leroy, 1789

BTL2A

At least with increased property taxes your fed tax deduction would be less. You won't have to complain as much about that.

You seem to wish there were no taxes. Just imagine having to pay a toll on every road, needing to plow through snow covered roads every winter, or needing to find your credit card before the fire department would be dispatched to put out your housefire.

Zegota

One more thing, just how long do you think realistically that big brother, federal government will continue to allow property taxes to be wrote off. There is already discussion in Washington D.C., about how to control this benefit, now you don't really think with todays economy and runaway spending. That with the stimulus funds on the back of our children and schools crying for more, that property taxes will stay as a write off. Not under the White House and the increase entitlements and stimulus borrowing, wake-up people, start protecting your children's future. Education is the key, but way to many people are ignoring the truth. Peace.

Zegota

There is only one way that our local municipalities, school districts and state governments will control the runaway costs and that is for the people to say NO to new taxes and taxing authorities. People must do research and stop listening to the special interest groups around the country, be responsible for your own decisions. Stop the runaway borrowing on our children's future, and wake-up. Peace.

Lanivan

The GHAPS is working to combine jobs and find other efficiencies by combining with other school districts, as explained in this GHTrib article..http://www.grandhaventribune.com...

Atomic Rooster - Of course the southern states don't cry budget deficits. In the US, with all variables considered, they typically spend less on all levels of education per student, have less percentage of graduating students, less percentage of students who enter into post-secondary education, a greater number of pregnant teen mothers, greater number of children who do not receive pre-kindergarten education, receive the greatest percentage of Federal Aid per tax dollars collected, have the greatest percentage of uninsured adults and children.

And their State legislators generally receive very little in salaries, perks, benefits, and the positions are part-time.

Tri-cities realist

Lan, not that I doubt the validity of some of your assertions, but do you have any data to back up your claims?

Whatareyoutalki...

I really wanted to back you up on this one Lan, but some of your statements are incorrect.

Graduation stats for the bottom 10 states:
District Of Columbia 59%
Nevada 62%
New Mexico 63%
Georgia 67%
Alaska 68%
Oregon 68%
Florida 71%
Louisiana 71%
Alabama 72%
Colorado 74%
Michigan 74%

College attendance after high school:
NC 66%
SC 70%
GA 69%
AL 66%
MI 59%

Being from the south I really would have thought this number would be different, but keep in mind some of our largest populated cities in Michigan (Detroit, Flint) and the economic state they are in, and yeah, I can see the impact it has on our overall success rates in these categories. It's amazing what the bubble does to the perception we have of our own state.

Lanivan

I saw the same statistics, What. You'll notice I did preface my comment with qualifiers, as there are indeed variables that make comparisons difficult, as you pointed out. I will look for links later when I have more time. Most of the information I used in my original quote was from research on Right-To-Work southern states.

I do want to clarify that I'm not denigrating southern states, having lived in the South myself, traveled extensively throughout, and love many things southern.

Whatareyoutalki...

I've lived down in the south for 26 years. Very much hated it. (not just becuse of the heat) My intent was to bolster your claims when I took the the interwebs, but sadly based on GOV data found your claims did not stack up. I would argue that west michigan is probably well above the curve on graduation rates and college attendance, but thats the bubble effect.

Tri-cities realist

Konarska mentions "expanding alternative revenue", yet no further explanation is given. Is he referring to increased rates of return on the money GHAPS has, or increased fees for the vendors who provide vending machines, or perhaps he is considering allowing Wal-mart to buy advertising space on all Grand Haven athletic jerseys, or better yet, rename the football stadium "Wal-mart stadium". Now that would get the discussion rolling. Honestly, the term "expanding alternative revenue" sounds more like a phrase in the office game we called bull $hit bingo.

moey

Not hard to figure out people keep leaving the state for better jobs. Its all about taxes and flowing back to the schools. No one wants to hear their school is closing or laying off teachers so they grasp hoping money magically comes from somewhere.

zwesterhouse

Getting a full picture will not come by asking any superintendent/ administrator/ teacher union officials. It better if regular ordinary people just open up the books and go line by line what the schools do with their monies. People need to get involved - follow the money. If they don't like what they see - elect a regular ordinary school board candidate(s) to clean up the mess. Those administrative pay scales are one rediculas when we got so many people working in sweat shop factories here in Grand Haven through some lousy temp service

dancingliberal

So what did you, a regular ordinary person find when you took the time to do this? Enlighten us on your great ideas to clean up the mess.

 

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