Rich Community Falls Short on School Budget
Birmingham district loses students, messes up revenue projections
Birmingham Public Schools is located in a community where the average household income is $126,601 and the average price of a home is $652,151, according to Zillow. Even with higher than average state property taxes and a growing population in the city, Birmingham’s school budget is under water.
The school district has not allowed students from other districts to enroll through school choice in the past, even though the district has continuously lost students over the past decade. Its enrollment has gone from 8,375 students in 2012 to 7,381 in 2021, an 11.9% decrease. Students who live outside district boundaries may attend if their test scores and grades are good enough, but they must pay a hefty tuition. In 2022-23 school year, tuition will range from $12,375 for elementary grade children up to $13,635 for high school students.
Couple the loss of funding due to fewer students with inaccurate revenue projections, and the district’s budget is in the red. The original budget for the 2021-22 school year was projected to bring in $111.1 million, and the district planned on spending $122.6 million. The district brought in only $107.8 million in revenue, however, or $3.3 million less than projected. It spent $134 million, not the anticipated $122.6 million. In other words, revenue fell short by 3% and spending was 9.3% more than projected.
It appears the district’s projections for what it would receive in revenue from local property taxes was too high, while its projections for spending on items such as salaries and benefits was too low.
“This case shows that being an exclusive school district doesn’t guarantee the highest standards in financial management,” said Ben DeGrow, director of education policy at the Mackinac Center for Public Policy. “It certainly hasn’t helped the bottom line to make the district off-limits to so many potential students.”
Embekka Roberson, superintendent of Birmingham Public Schools, did not respond to an email inquiry about the district’s plans to solve the problem.
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.