State Cuts, Retirement Costs Combine for $10M Punch

Gov. Rick Snyder's proposed budget, unveiled Thursday in Lansing, will cost $470 per pupil in state funding. But with increased retirement costs, school officials say Farmington Public Schools stands to lose $700 per pupil – as much as $10 million – for the coming school year.

Snyder said Thursday the per-pupil reduction would save the state $452.5 million. He spoke for about a half-hour before the joint session of the House and Senate Appropriations, finance and tax policy committees, emphasizing his priorities over specifics, calling his budget proposal an opportunity to reshape Michigan's future and set an example for the nation.

"This day should have happened a long time ago," said Snyder during the address, which was televised live on Michigan Government Television. "We shouldn't waste an opportunity. Not doing this would be kicking the can down the road. That's not why I got elected and it's not why you got elected. A lot of us are going to have to make sacrifices."

Chris Greig, president of the Farmington Parent Teacher Association, said Farmington Schools parents are worried about the financial impact of those sacrifices. The district already has been prudent with its finances, she said.

"We don't have any options for raising funds ... or even control our pension costs," Greig said. "It's punishing all the schools, whether they're efficient or not."

At the end of the 2009-2010 school year, Farmington officials closed four elementary schools and made cuts that directly affect the classroom, to remedy an $18 million deficit. Greig said she can't imagine what will happen if Snyder's budget cuts make it through the legislature.

"After what they did with $18 million in cuts, it's kind of horrific," she said.

Greig believes consolidation of districts would help reduce costs state-wide and that the state could help with that process.

"I think there's a better way to do it than starving them out," she said. "Forcing (school districts) into bankruptcy isn't the way to go about it."

Retirement contributions add $4.3M

In January, FPS executive director of business services Mary Reynolds said employee retirement account contributions will rise from 20.66 cents on the dollar to 27 cents, costing the district a total of $4.3 million. Anticipating that and the state cuts, school board members on Tuesday voted to pursue privatizing everything from transportation to nutritional services. Such changes could affect more than 240 support services workers.

Officials said that could save as much as $4 million, primarily in benefit costs.

Speaking after the governor and Lt. Gov. Brian Calley Thursday, State Budget Director John Nixon said districts could adopt an 80-20 employer-employee split on health care contributions to generate $300 million in savings state-wide. He also estimated another $300 million could be saved if districts improve the way they provide support services.

In a statement issued late Thursday afternoon, Farmington Schools Supt. Sue Zurvalec had a mixed review of Snyder's proposal. She said the district strongly disagrees with "the low priority for education. Cutting funding for K-12 schools while, at the same time, raising payroll costs for retirement pensions is very short sighted."

She praised Synder's "courage and willingness to open the budget dialogue" and "challenge many assumptions that have been sacred" and his proposed multi-year budget, which includes a one-year budget as legally required and a second year budget for planning purposes.

Zurvalec said Farmington students already have an advantage. "Our district is global in its orientation with students and staff members that bring diverse gifts and backgrounds to stimulate learning and academic growth. We must not lose sight of our advantages in the midst of this storm."

Oakland Schools stands behind local officials

At Oakland Schools, an intermediate district that serves Farmington Schools and 25 other districts within the county, spokesperson Shelley Yorke Rose said, "Anything that prevents us from delivering a quality education to Oakland County's 222,000 students, we have to look at very carefully."

The intermediate district primarily supports public schools and public academies, but also provides services to private schools. People from "every walk of life in a school setting" have support through Oakland Schools, Rose said.

The ISD annually spends $298.7 million in direct services, and $26.2 million in indirect services. "It sounds like a lot, but 92 cents of every dollar in its budget goes back to local districts," Rose said.

Funding comes primarily through property taxes, as well as special millages for special education and career-focused education, grants and the State of Michigan.

Rose expects a lot of conversation about the budget, but said Oakland Schools is "concerned about any cuts that prevent schools from providing an equitable education to students. We'll listen to our superintendents and board members, and see how we can support them."

"I'm trying to understand it," she said. "There are a lot of details that will have to be worked out in the legislature."

Hartland Patch editor Christofer Machianak also contributed to this report.