Educational Funding

Sturgis Public Schools

2010 - 2011

Why do we need to understand educational funding?

• School improvement

• Student achievement

• Site-based management

• School as a business

What does funding affect?

• Class sizes• Employee compensation• Buildings and playgrounds• Textbooks• Technical equipment• Specialist classes• Extracurricular activities• Community confidence

Sturgis Public Schools Revenue Budget 2010-2011

Federal Revenue

• Historically driven by equal opportunity

• 1790 – mid 19th century – equal opportunity defined by physical access to school

• 20th century – equal opportunity defined by equal spending per pupil

• ARRA – create and save jobs and jump-start economy

Michigan School Aid Fund Revenue By Source FY 2010-11

State Revenue – Proposal A

• 1994 Constitutional amendment

• Attempt to close funding gap

• Created per-pupil funding

• Increased sales tax from 4 – 6%

• Decreased property tax

• Homestead – 6 mills

• Nonhomestead – 18 mills

Michigan’s Struggling Economy

• Lost automotive manufacturing jobs

• Revenue consensus – Balanced budget requirement

• 1995 – Michigan was in the top 1/3 in individual wealth

• 2010 – Michigan now in the bottom ¼ in individual wealth

• Population decline

Local Revenue

• Tuition, investment earnings, rentals

• Universal service funds

• Grants – Sturgis Foundation endowment grants, mini-grants, solar grant, etc.

• Abbott solar/wind grant

Fund Balance

• Cumulative excess of revenues over expenditures

• Measurement tool of the district’s financial health

• School’s form of a savings account• Safety net for unforeseen circumstances• Savings plan for future needs

Advantages of Higher Fund Balance

• Minimizes reductions of employees and programs

• Decreases dependency of state aid borrowing

• Provides security from fluctuating expenses

• Contributes to higher bond ratings

Sturgis Public SchoolsSpend Down Formula

Expenditures

• State wide 2008-2009 - per-pupil revenue of $8,981 fell below expenditure of $9,545

• Some costs out of district control – retirement contribution

• Some costs difficult to contain – energy and health care

• Federal and state mandates

What Have We Done to Control Costs?

• Renovated buildings

• Energy education

• Reduction in employees

• Changed health insurance carrier

• Others?

Questions? Please contact Vicki Watson

Thank you for your time