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State funding drop drives $10.6 million budget cut

For largest area district, ‘a decision between hard and hard’

Across Michigan, from Ypsilanti to Engadine, schools are grappling with a coronavirus double whammy as they plan for the 2020-21 school year. More money may need to be spent this fall to keep students safe, but a lot less money will be available because of a decimated School Aid Fund.

That double whammy presents a financial crisis for all 20 school districts in Kent ISD. As the largest of those districts, with almost 15,000 students, Grand Rapids Public Schools is confronting especially large budget challenges, forcing the district to make major cuts even as it prepares for a new way of schooling in the midst of a pandemic. 

Facing a drastic drop in state funding, the GRPS Board of Education Monday approved $10.6 million in budget cuts for the coming school year, including wage freezes, layoffs and non-salary reductions, to help cover a projected $21.8 million shortfall.      

At the June 29 virtual meeting, the nine-member board adopted a 2020-21 budget, and amended the current one due to a projected cut of $650 per student in the School Aid Fund. Both budgets drew heavily on a “dangerously low” rainy day fund in order to balance them by June 30, as required by state law.

Board members voiced the pain of the cuts they had to make. 

“I think that’s probably the most sobering if not somber vote that I’ve had to take in my nine years or so on the board,” said trustee Raynard Ross, adding he hopes the community “recognizes the seriousness with which we approach this work, and the less than enviable position that we were in.”

“There was no decision here that didn’t affect our students and our staff,” said vice president Jen Schottke. “So there was no decision between easy and hard. Unfortunately it was just a decision between hard and hard, which is a lot of what 2020 feels like.” 

Per-Pupil Funding Back to 2015-16

In Michigan, school funding primarily is collected by the state, goes into the School Aid Fund and then is distributed from Lansing back to districts. About two-thirds of the School Aid Fund comes from income and sales taxes, which dropped precipitously during Michigan’s Stay Home, Stay Safe order. 

GRPS Chief Financial Officer Larry Oberst noted that the budget for 2020-21 includes the largest per-pupil cut in 25 years — from $8,111 per student to $7,461 per student — and that it brings GRPS back to 2015-16 per-pupil funding levels. The board-approved budget of $217.7 million is down from $223.2 million in 2019-20, Oberst said.

The new budget avoids school closures, which had been part of an earlier proposal. Instead, GRPS froze employee wages and benefits for next year at this year’s levels, is not filling vacant positions and will be enacting layoffs. 

All told the district could have a reduction of the equivalent of an estimated 111 full-time employees next year, depending on how much additional state or federal aid the district may or may not receive, Oberst said. GRPS also will be reducing non-salary expenses such as transportation, advertising, supplies and more. 

The board also approved using the budget’s fund balance to make up some of the shortfalls, drawing on it for $6.15 million for 2019-20 and $5.1 million for 2020-21. As a result, a fund which just two years ago held almost $15 million will be right around $1 million by June 2021. Oberst called that amount “dangerously low” at less than 1 percent of the district’s budget and below the 5 percent that state regulations require. However, a state budget deal announced Monday may put the district back over 5 percent at least for 2019-20, he said. 

“It’s clear the administration, leadership as well as the board want to get that fund balance back up,” Oberst said.

GRPS is also using $5.5 million in Elementary and Secondary School Emergency Relief grants that it received as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act to balance its budgets, including $1.1 million for 2019-20 and $4.4 million for 2020-21.

School Closures, Montessori Changes Taken Off the Table

As a result of the diverse cost-savings measures, the board meeting wasn’t nearly as contentious as it could have been. At one point, GRPS had considered closing three schools — Aberdeen, East Leonard and Ken-O-Sha — as well as pre-K Montessori programs, and organized opposition to that proposal had begun to percolate. 

But three days prior to the board meeting, the school-closure and Montessori option was taken off the table as part of a revised budget recommendation following a June 22 virtual town hall meeting and community survey.

‘There was no decision between easy and hard. Unfortunately it was just a decision between hard and hard.’

— School board vice president Jen Schottke

The reasons for the revision were made plain via a joint statement from interim Superintendent Ronald Gorman and incoming Superintendent Leadriane Roby who wrote: “Based on individual feedback from the Board of Education, survey results and the input we received from the town hall meeting, the Urban Core Collective event, union leadership, and other communications, we will be submitting a revised budget recommendation … that takes school closures and changes to Montessori programs off the table.”

Almost 1,000 people did an online survey about the initial budget options. Closing three schools and reducing the Montessori programs was the least preferred of three options for more than half of all respondents.

COVID-19 was also on the minds of respondents who expressed concern about the need for parents, students and staff to have stability, certainty and some normalcy in the midst of a global pandemic and unknown plans for a return to school in the fall.

Calling on Congress to Do More

Gorman and Roby said that staff layoffs, combined with deeper cuts at the central office and compensation reductions of 5 percent for cabinet members, was a better way to go, since additional funding relief from the state and/or federal governments would allow the district to walk back a staff layoff far more easily than a school closure.

A recent plan put forth by Michigan Republicans called “Return to Learn,” would put a one-time extra $800 per student from federal funds into school district coffers across the state.

GRPS executive director of communications John Helmholdt added that GRPS and the other districts in Kent ISD are unified in calling on Congress to grant the state flexibility with the $3.1 billion it received as part of the CARES Act, money which, Helmholdt said, currently is not allowed for backfilling budgets. 

“We are also calling for another round of federal bailout,” Helmholdt said.

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Our Kids, Our Future calls on lawmakers to increase funding

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Phil de Haan
Phil de Haan
Phil de Haan covers Grand Rapids and Kelloggsville and also is a general assignment reporter and the point person for the SNN Facebook and Twitter feeds. He hails from Exeter, Ontario, but has called Grand Rapids home since 1985. He is the son of a longtime public school teacher who taught both English and machine shop! Phil took both classes at South Huron District High School, but English stuck, and at Calvin College, where he met his wife, Sue, he majored in English and minored in journalism. His background includes both freelance writing and public relations work, including teaching an advertising and PR course at the college level. In the summer of 2019, he began his own freelance writing and communications business. In his spare time, Phil plays pick-up hockey and pickleball and tries to keep tabs on his two adult children.  Read Phil's full bio or email Phil.

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