LINCOLN - The Alcona Community Schools Board of Education approved its proposed budget for the upcoming 2012-13 fiscal year on Monday, but school officials say they cannot accommodate much more in the way of state funding cuts.
The school spent $626,667.58 of its $1.4 million fund equity to balance its budget last year, and based on the final unaudited budget for the 2011-12 fiscal year and the proposed budget for the 2012-13 fiscal year, the school will need to drain another $699,560 from that balance next year to compensate for revenue losses. According to the latest estimates, local revenues will decrease by 1.9 percent, state revenues by 33.3 percent, federal revenues by 50.2 percent, and incoming transfers by 62.1 percent, amounting to a 14.1 percent drop in total revenue for the year. Even after making enough cuts to reduce expenses by 11 percent, the school will need to drain its fund balance to $98,438.42 to pay the bills.
The 2012-13 budget accounts for the elimination of one maintenance position and two teaching positions, one through an unreplaced transfer to a vacated administrative position and the other via an impending layoff. If it changes its dual enrollment cost-setting formula and also lays off another teacher, five paraprofessionals, two additional maintenance facility caretakers, a bus driver/mechanic, a bus driver, and two maintenance facility caretakers, the school will still be $112,000 short of a safe fund balance of one month's operating expenses - about $601,000. Superintendent Shawn Thornton was skeptical the elementary school would be able to keep its community eligibility-based free lunch program next year, and she said the current 2012-13 budget's expected final fund balance of about $98,000 would be inexcusable.
"We have a couple of choices. We are still waiting on some more definitive information from the state of Michigan; we'll have more information based on the results of our audit - if there's carryover; we hope to have more information on the status of our federal funding dollars and what we can do with those as an allowable expense; so my suggestion is that we wait until later in August, have a plan to either make about $112,000 more reductions in addition to (what we've already proposed), or wait to see if we receive any additional revenues throughout the school year and make adjustments as necessary," she said. "I think we could all agree ... that $98,000 is a dangerous level to be at in our fund equity and is not acceptable in terms of how we conduct business practices out of our office."
The board authorized and certified the annual levy of 18 mills on non-homestead properties, 1.5 mills for debt retirement, and 1.35 mills on homestead properties to be paid this summer by residents of Alcona, Caledonia, Gustin, Harrisville, Hawes, Haynes, Mikado and Millen townships and the City of Harrisville; but many residents cannot afford more. Thornton said many schools around the state are in the same boat. She expects the problem will only get worse until the state addresses the fact of increasingly inadequate school funding.
"We are at a point, where many school districts are, where we cannot cut our way out of this revenue problem. There's nothing left. The revenue has to change, and the only way for us to change the revenue is to enroll more students, and in a community that is struggling economically ... that would be very difficult to do, and I think what we need to do while we manage this budget and tweak it is be prepared to ... make the decisions necessary to keep us in a safe financial situation but to also preserve the high quality of our program," she said. "The Proposal A that was passed 20 years ago, I think we've decided, is not working for us as it currently stands with continuous reductions from the state and a $470-per-pupil reduction that we are just to absorb."
Andrew Westrope can be reached via e-mail at email@example.com or by phone at 358-5693.