Breaking Down the Numbers: Birmingham School District Begins Drawing Up a Budget

Tough choices are on the horizon for as the school board continues to develop the district's 2011-12 budget.

Debbie Piesz, assistant superintendent for business services, presented her department’s tentative budget plans at the board's Tuesday night meeting, introducing potential cuts and setting a public budget hearing for June 7.

The plans are still in their early stages, Piesz said, and with the state’s fiscal year ending Sept. 30 — three months after school districts must submit their own budgets — there is still uncertainty of what will be cut on a state level and how much money the district will have to work with. 

There are a lot of numbers involved, so here’s what you need to know about what’s coming up:

How it works:

• The school board must complete a budget by June 30, the end of its fiscal year. In the months leading up to that date, the district takes a look at projected expenditures and projected revenue. If expenditures are expected to exceed revenue, the district factors in a deficit for the upcoming fiscal year.
• The district must keep a certain percentage of its money in fund equity — funds that are kept in reserve and may be spent only on certain projects. According to School Board Policy 6215, a certain percentage of the fund equity may be transferred to the general fund if needed.

The situation:

• As part of the , Gov. Rick Snyder proposed cutting funding for public schools by 4 percent, or $470 per student.
• Birmingham Public Schools already were facing a $5.3 million deficit for the 2011-12 school year. If Snyder's additional cuts are passed, that deficit could stand around $7.7 million.
• In a , Piesz said district revenues are expected to remain static during the next four years, while expenditures are expected to increase by 3 percent.
• Currently, the district spends 53 percent of its budget on staff salaries, 18 percent on FICA (Social Security and Medicare) and retirement costs, 12 percent on employee insurance, 4 percent on utilities and 13 percent on other costs. Since the district began contracting out custodial and transportation services, the percentage paid to salaries has decreased, while that paid to “other costs” has climbed.

The plan:

To meet this deficit, Piesz presented a four-point budget plan at Tuesday night’s meeting. Those points are:

• Eliminate $3.6 million in transfers from the general fund to the capital projects fund, which is used for major maintenence and repairs.
• Review discretionary expenditures for staff overtime, supplies, capital outlay and energy management.
• Transfer money from fund equity into the general fund.
• Review all programs, departments and expenditures for 2012-13.

How we got here:

• Since 2002, Birmingham Public Schools has cut $28 million in expenses.
• On June 1, 2010, the school board approved $5.5 million in budget cuts for the 2010-11 school year to make up for a projected $8 million deficit.
• Those cuts included 4 percent salary reductions for three bargaining units and nonaffiliated staff, the elimination of 46.3 full-time positions and the transfer of $2.6 million in fund equity to the general fund.
• Last fall, the state passed its budget and various incentives, stripping Birmingham schools of “20J” funding — around $900,000 in 2009-10. "20J" was a section of the School Aid Act which would have provided additional funds for certain districts based on per-pupil spending. The section was vetoed by the Legislature in 2009.
• However, the district received additional money from the federal Education Jobs Fund and American Recovery and Reinvestment Act.
• The district also began fall 2010 with 96 new students, boosting its tuition revenue.
• As planned, the district eliminated 46.3 positions at the end of the 2009-10 school year — mostly maintenance and secretarial workers. In addition, 51 teachers retired last year as part of the state’s retirement incentive. The district hired 62 new workers at the beginning of the 2010-11 school year, only 45 of whom were full time.
• As a result, Birmingham Public Schools has an anticipated deficit of $2.6 million for 2010-11.

What’s coming:

• March-May: Distribute budget information to the staff and community; modify plans, when appropriate, based on feedback.
• April: The district will hold a at 7 p.m. April 25 at , where state representatives from the surrounding communities will be on hand to answer the tough questions about school funding.
• May: Update taxable value information; finalize the budget development process; review preliminary budgets.
• June 7: Hold public budget hearing; vote on 2011-12 budget.