News Story

Conservative Budgeting Helps Some Teachers Get Cash Back

Milan, Lansing school districts balance budgets, enroll more students than expected

Like many districts in Michigan, Milan Area Schools suffered a reduction in student enrollment. But unlike other districts, many of the district's employees will be getting more money this year than originally planned even with the drop in enrollment.

Milan Superintendent Bryan Girbach said it was because the district took a hard look at enrollment trends while unions worked with the district to get a balanced budget.

The result: employees will get 1.7 percent back from their contractual concessions, Girbach said. 

Milan Area Schools had 2,385 students in 2012-13. It budgeted for a 7 percent reduction to 2,231 students. The October student count for 2013-14 was 2,260, a drop of 125 students from the previous year, but 29 more students than the district had budgeted. The district used computer models to come up with its student count projections.

"Everyone in our district understands the importance of achieving a balanced annual budget," Girbach said. "Therefore, we 'right sized' our staffing levels in every department (downsizing the overall district staff by more than 25 full-time equivalent employees). We also negotiated contracts with our employee groups that included fairly heavy concessions. We are blessed to have unions in our district that work with the board and administration to develop contracts that allow the district to be fiscally responsible. The 'right sizing' and employee concessions allowed us to accomplish a balanced budget based on our pupil count projections."

Starting in November, school employees started getting their "rebates," he said.

"The board and I have no intention of banking money on the backs of our employees," Girbach said. "Therefore, we are using the additional funds to give back a portion of the concessions that our employees agreed to in July."

The Lansing School District also had fewer students leave the district than it had budgeted, said district spokesman Robert Kolt.

Lansing schools went from 12,470 students in 2012-13 to 12,123 this school year. The district budgeted for 12,100 students.

"The 12,123 is above all projections and Lansing is happy," Kolt said in an email. "The budget is balanced; cash in the bank; credit rating is stable with a presentation scheduled to bond agencies in December."

Enrollment numbers are significant because each student brings money to the school district. Most school districts get about $7,000 per student from the state, according to the Michigan Department of Education. 

Some districts ignore negative trends and place themselves in financial crisis, said Audrey Spalding, education policy director at the Mackinac Center for Public Policy.

"Milan did the opposite by budgeting conservatively," Spalding said. "Milan is demonstrating how a district can deal with an enrollment decline responsibly and proactively. Other districts should take note."

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.