Unless the district receives an unexpected windfall from the state, Utica Community Schools is looking at a $22.5 million to $25.7 million deficit for the 2013-14 academic year.
With Gov. Rick Snyder due to unveil his third 2014 budget on Feb. 7, the district is making no assumptions about additional school aid funding and taking a hard look at its costs minus any cuts or added revenue.
“We’re looking at what operating costs were in 2012-13 and what expenses would be if we kept staffing levels consistent and did everything the same (in 2013-14) as we do today,” said Stephanie Eagan, assistant superintendent for business and employee services.
Taking into account the health care and retirement demands of the state as well, Eagan estimates the district will spend around $265.3 million in 2013-14 and take in only $239.6 million, leaving an operating deficit of $25.7 million. An additional $3.2 million could offset that deficit provided reforms to the state retirement system are successful.
The district's largest source of revenue is by far its foundation allowance, or the money it receives from the state per enrolled student. Receiving roughly $7,337 for each of its 28,600 students, this number is projected to be around $209.8 million in 2013-14.
However, this particular source of revenue, which has been significantly cut in recent years, looks to be further reduced as the county’s birth rate continues to decline, resulting in smaller kindergarten classes than graduating seniors.
UCS expects its enrollment to decline by about 222 students next year as a result of this trend.
“The largest piece (of revenue) is state funding,” Eagan said, adding that this accounts for about 80 percent of the district’s funding. “We’re really dependent on the state economy. When revenue is down, that creates a lot of pressure.”
With the deadline to adopt a budget still several months away, Eagan said stressed that the estimated $22.5 million deficit is only that – an estimate.
“There are a lot of variables we need to work through,” she said. “The information presented creates an awareness of our current position as we build our budget. There are significant variables, including the governor’s budget plan and ongoing negotiations.”
While the district has made a number of budget reductions in recent years, Eagan said UCS has made a concerted effort to ensure that 80 percent of funding remains committed to supporting classroom instruction.