News Story

Did 'Republican Budget Cuts' Lead to a $51.7 Million Deficit and No Toilet Paper in Schools?

Unions and politicians obscured the real problems with Pontiac School District

At the height of the Pontiac School District’s overspending crisis, its deficit reached $51.7 million in 2013.

House Democratic Leader Tim Greimel put out a press release in January 2013 with a headline: “Republican Budget Cuts Lead To Lack of Toilet Paper in Pontiac Schools.”

Pontiac Education Association Union President Aimee McKeever said the district was poor and not receiving as much money as surrounding districts.

But neither claim was accurate.

The Pontiac School District is in the news this week after it stated its deficit has been reduced for the first time in the seven consecutive years it has been in red ink, according to a story in the Detroit Free Press. Pontiac has 10 years to solve its overspending crisis under an agreement it reached in 2014 with State Superintendent of Education Michael Flanagan.

A look back at what led to Gov. Rick Snyder declaring the district was in a financial emergency in 2013 shows the crisis evolved from a dramatic drop in enrollment that the district didn’t respond to quickly enough coupled with a cut in federal funding.

Pontiac schools received $11,390 per pupil (including local, state and federal general fund money) in 2012-13. The district received $11,591 per pupil in 2008-09, its first year in deficit. Although the overall general fund was relatively flat during those four years, there was a large drop in federal funding.

The district received $2,654 per pupil in federal money in 2008-09, but federal aid dropped to $1,326 per pupil in 2012-13. The district had lost half of its federal aid within the four years – $1,326 per pupil – but still managed to have just a $201 per-pupil loss because local and state funds picked up much of what was lost in federal money, according to the MDE.

The district’s loss of federal aid was made worse by a huge exodus of students. Pontiac’s enrollment dropped 50 percent from 2006-07 to 2013-14. Pontiac schools had 9,059 students in K-12 in 2006-07. By 2013-14, that number of students had dropped to 4,531.

The district also hadn’t reduced staffing to match the rate at which it was losing students. For example, the district had a headcount of 1,456 employees in 2008-09, its first year in deficit. By 2012-13, the district’s headcount was 1,209 employees, a 17 percent reduction from four years earlier. But it had lost 30 percent of its student enrollment during that four-year period.

Yet the district was paying its teachers like it was flourishing.

In 2008-09, the average salary for a Pontiac School District teacher was $64,651. That was the district’s first year in deficit when it was $8.5 million in red ink. By 2012-13, when the overspending peaked at $51.7 million, the average teacher salary increased to $71,284, according to the Michigan Department of Education. In 2013, the district had a high school teacher with a $101,510 salary and an elementary school teacher with a $100,141 salary.

But while the union and politicians were putting out press releases blaming political parties and a lack of funding, school district administrators were telling a different story to the Michigan Department of Education. In their 2012 deficit elimination plan, the administration’s response mentioned the loss of students and the need for more money. But the administration also highlighted two other problems. The administration’s explanation to the MDE acknowledged, “planned decreases in expenditures that were not implemented” and, “No substantial reduction in staffing.”

The union president was pinning the blame on a lack of money.

In September of 2013, McKeever told the MEA, “When is the state going to step up and do what it needs to do to help these poor school districts? These children deserve a good education in buildings that are safe and healthy – just like in the school districts surrounding us.”

Yet, according to the Michigan Department of Education, Pontiac schools received more money per pupil than all but one of the seven districts it borders.

Pontiac received $11,390 per pupil in general fund revenues in 2012-13 (including local, state and federal funds). By comparison, the only bordering school district to receive more was Bloomfield Hills ($14,607). Rochester ($10,213), West Bloomfield ($10,065), Lake Orion ($9,950), Waterford ($9,745), Avondale ($9,663) and Clarkston ($9,160) all received less per pupil than Pontiac.

With 5,195 students in 2012-13 at the time of McKeever’s plea for more money, it would have cost taxpayers an extra $9,932 per pupil just to pay off Pontiac’s accumulated $51.7 million deficit.


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Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.