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Utica Community Schools Braces for $22.5 Million Deficit in 2013-14

The district anticipates it will spend around $265.3 million in 2013-14, but take in only $239.6 million in revenue, according to early estimates.

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.

Frustrated Old Man February 02, 2013 at 05:03 PM
That's a very good question Judy! There is no accountability to how those funds are being used. Worse than that is all the money Casino's are paying local government. Millions upon millions, yet we have no idea where it goes! It's time voters demand answers!
a worker February 02, 2013 at 05:37 PM
The above post mentioned the new company needing additional help to get things done... You are so right. The outsourced cleaning company even had to outsource the carpet cleaning. By the way UCS... your carpeting looked filthy at the begining of this school year. Parents.... look for yourself. Look to see if your child's building is really clean. I know it was when the full time custodians were doing the work because they actually cared about their buildings as well as the children. The new company (GCA) employees don't stay at a building long enough to to care. GCA has a terible turn-over rate. Way to go UCS.... Failed leadership at its finest.
rory February 09, 2013 at 07:35 PM
Your comment was 1 sentence. Have you ever heard of a period?
rory February 09, 2013 at 07:41 PM
You must be a government employee. I blame Democrats who gave everything to the public employee unions: Expensive health care, health are when they retire, retire after 25 years with full benefits, guaranteed pensions, ED medications, etc. The article stats part of the deficit is because of "health care and retirement demands". WHO CAUSED THESE DEMANDS? DEMOCRATS!!!!
a worker May 16, 2013 at 11:10 PM
I just learned an interesting fact.... Does anyone out there realize that Enviro-Clean (the company that UCS interviewed and almost hired for custodial services in your child's schools) hires many of their employees off of CRAIGSLIST? You have got to be kidding me. If Enviro-Clean hires off of CRAIGSLIST.....Where does the company that won the cleaning contract (GCA Services) hire there people from? The welfare line? Keep in mind UCS promised every single parent out there... every person working in the schools would be above board....yea right.

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