Multiple districts — A confluence of factors has school finance officials crunching numbers with a sense of uncertainty as they plan for the 2025-26 school year.
Along with the impact tariffs could have on costs, the gutting of the U.S. Department of Education and threats to federal funds distributed through that department are on district radars as budgets take shape.
Most districts are in an OK position, but they’re wary, officials explained. While they are already facing increased costs in technology and building materials and expect more in other areas, built-up savings funds and the benefits of increased property values over recent years continue to provide financial cushions.
“If this was my first rodeo I would be panicking, but right now there’s a lot of noise out there and generally we come out OK in the end,” said Matt Lewis, Wyoming Public Schools associate superintendent.
When it comes to what will happen with federal funds that districts have long received for low-income schools and special education, it’s a fluid situation.
“I am more concerned about the funding side of things than the cost side of things,” said Kevin Philipps, Kent ISD assistant superintendent of administrative services. “One reason for that is because the personnel costs are the majority of (districts’) expense structure.”
Another factor in planning is that districts’ budgets are due to be finalized by July 1, while the state has until Oct. 1 for the governor to sign its budget. Gov. Gretchen Whitmer’s 2025-26 School Aid proposal calls for a total $21.2 billion budget — down from $23.4 million, but resulting in a 4.1% increase in the total funds allocated per-student. With negotiations ongoing, it’s a long way from the finish line.
So, how are districts preparing during uncertain times and with uncertain numbers? SNN spoke to school business leaders for their perspectives.
Grand Rapids Public Schools
Rhonda Kribs, GRPS chief financial officer, said she is keeping a close eye on how tariffs could affect the ongoing work associated with the bond-funded “Reimagine GRPS With Us!” facilities realignment plan.
‘I don’t want to be the one that runs around and says the sky is falling, but we have to be realistic. I don’t know that the sky is falling, but it’s very uncertain.’
— Rhonda Kribs, GRPS chief financial officer
Kribs said the “on-again, off-again” messaging from the federal government regarding tariffs has made the situation difficult to gauge. But in some ways, the pandemic helped prepare the district for this kind of financial uncertainty.
“In each of our bond projects, we do have a contingency built in,” Kribs said, referring to a reserve of money set aside to cover unforeseen expenses. “That’s one of the things we learned during COVID when costs skyrocketed.”
On top of that, Kribs said the district’s bond consultants are starting to include tariff contingencies in their estimates for steel, aluminum and other materials. And some furniture vendors have started to include tariff line items in their invoices.
GRPS was already trying to tighten belts following the expiration of federal Elementary and Secondary School Emergency Relief funds earlier in the year; the hovering question of tariffs has compounded the issue.
“It is a very challenging time,” Kribs said. “As we come off the ESSER cliff, we are already dipping into fund balances, so we’ll be looking at doing some right-sizing again.”
She added that budget discussions that once revolved around “wants and needs” are now getting even more specific, prioritizing essential needs over all else.
“I don’t want to be the one that runs around and says the sky is falling, but we have to be realistic,” Kribs said. “I don’t know that the sky is falling, but it’s very uncertain.
“We need to be conservative and … we need to be in a strong financial position so we can weather the storm. We know it’s coming, we just don’t know when or how bad.”
Construction and bond projects are the primary area of concern, but Kribs said Dean Transportation — which provides contracted busing services to GRPS — has mentioned that vehicle costs are also likely to be affected.
Kribs is unsure if the district’s food purchases will be impacted by tariffs, since much of it comes from within the U.S., but there’s sure to be an indirect impact as grocery costs rise — due not only to tariffs but to inflation in general.
“Our employees, when they go to the grocery store, are facing increased costs, so there is a pressure to increase wages because of what our staff are feeling,” she said. “It hits everywhere.”
Financial concerns aren’t limited to tariffs. Kribs said she’s also keeping an eye on federal funds including Title I, allocated to schools based on federal poverty statistics; Title II funding, which supports instruction through professional development; and Individuals with Disabilities Education Act grants.
If the Trump administration successfully dismantles the Department of Education, Title I and IDEA funds would, Kribs hopes, still be available, even if they’re administered by another agency.
As for Title II, Kribs said there was chatter about discontinuing it during the first Trump administration.
“So that’s one that I’ve got in the back of my mind,” she said. “It’s very important to us and what we do and how we do it, in providing support for our teachers in training. … Now that we’re in an even more cost-cutting mode at the federal government, is that one of the first to go?”
Kent ISD
Philipps said he expects the impact of tariffs in several areas — but doesn’t anticipate it to be huge. The biggest hit could be on big construction projects rather than everyday operational costs.
“We haven’t seen anything in general yet,” he said, concerning rising costs. “The one area (where) we have had a little bit of an issue already is within technology — buying computers and laptops. … A lot of technological equipment comes out of China.”
He said Kent ISD is starting to source devices out of Mexico.
“Right now the biggest issue for districts is just trying to plan,” he said.
Along with technology, when it comes to operational budgets, he sees tariffs possibly affecting school supplies and food, but those impacts will be minimal, percentage wise.
Across the region, increased costs in steel and other materials could change price tags of construction, he said. Communities often approve bond proposals years before projects are finished.
“If you went out and you sold your community on a $150 million bond issue and all of a sudden the costs are going to be $200 (million) … those are probably where the big risks are,” Philipps said.
Kent ISD is currently undergoing its own $5.5 million to $6 million renovation project of the Educational Services Center, located on campus. Much of the structure in the first phase of the project is in place, but there could be potential impacts on the second phase.
Philipps emphasized setting aside 7% to 10% contingency funds to help cover cost adjustments is crucial right now.
Cedar Springs Public Schools
Matti Sullivan, chief financial officer, said the exact impact of tariffs on the district has yet to be determined.
Sullivan said the district got a lot of its “big-ticket” needs out of the way ahead of the tariffs, including major construction projects, vehicle purchases, classroom furniture and new tech. However, he noted, “I do anticipate an increase in prices for classroom supplies.”
Budgeting under unknown financial circumstances is “somewhat par for the course” with school finances, he said.
“The potential for tariffs adds additional uncertainty to revenues and creates new uncertainty on the expense side. As we always do, we will build multiple budget scenarios and ask the board to adopt the one that reflects our best estimates based on the information we have as of early/mid June.”
Though it’s impossible to know how tariffs might impact the budget of future fiscal years, the district is already considering what the least desirable outcome might be, Sullivan said.
“The worst-case scenario would be the tariffs cause a recession and increase prices. Seventy percent of the School Aid Fund revenue comes from sales tax, income tax and use tax.
“A recession could have a significant impact on the amount of funding available within the School Aid Fund. Fortunately. Cedar has a healthy fund balance to help us with any short-term bumps in the road.”
In terms of federal funding sources that might be cut, Sullivan said the district is “keeping an eye on what is coming out of both Lansing and D.C.”
Wyoming
Associate Superintendent Lewis is looking at the big picture when it comes to tariffs.
“I just put it in perspective,” he said. “The average K-12 traditional district in Michigan spends about 3% of its budget on supplies.”
In Wyoming, that’s about $2 million allocated for office supplies, student textbooks and other tangibles.
“Even if we had a 10% across-the-board increase on everything we are buying, we are talking about 0.3%” increased cost to the district.
The district may have to be strategic with purchases, however.
“It’s not anything right now that I’m losing sleep over. I think as it pertains to specific countries with higher potential tariffs, that could start to impact technology,” he said. “We would just pivot at that point. As opposed to paying 50% or 100% more for a Chromebook, we would defer those purchases until things normalize a little bit.”
Wyoming is nearing completion of bond work that included major building renovations. Noted Lewis, “I think if I were at the beginning of our seven-year construction period I would certainly be a little more concerned.”
Construction is scheduled to begin on a new bus garage in the fall, however, and Lewis said he’s looking at numbers. The district’s bus garage was completely destroyed by a fire in December.
“The impact of steel tariffs could come in and hurt us just a little bit. But even that’s a relatively small project compared to building a new high school or middle school.”
The district purchased four buses in the past year, which puts it on solid footing in that area, Lewis said: “If we had to wait a year (to buy more buses) because of instability in that market, we could do that.”
The annual cost of food for school meals, about $1 million for Wyoming Public Schools, is 30% to 35% of the overall food service operations budget. So increased cost in that area could be more impactful than increases in other areas.
“That one could hurt a little bit,” he said. “Currently our food service budget is in great shape financially, so we could weather a little cost increase if we have to.”
Like Philipps, Lewis is also more concerned about revenue decreases. The district receives about $1 million in Title I funding and $150,000 in Title II funding, so covering those losses would be significant.
For now, he’s focused on staffing levels as a way of tightening the budget.
“We don’t have any drastic cuts that we are currently looking at, but we are trying to right-size again through attrition. We certainly won’t be adding things.” He said he’s anticipating five or six retirements and a handful of resignations.
“We’re certainly cognizant of the fact that over the COVID period not just Wyoming but all districts added staff. We are staffed at a higher level than we’ve been at any point in the last five or six years.”
Moving forward, if there was a need to cover more costs leading into next school year, Lewis said, “We would dip into the fund balance (district savings) a little bit if we have to.”
Reporter Riley Kelley contributed to this story.
Read more:
• What would closing the U.S. Department of Education mean for special education in Kent County?
• What’s in store for federal education dollars?
