Mar 16, 2011
Republicans going after school districts that have been prudent with funds
LANSING -- With the final approval of the anti-union and anti-Democratic Emergency Financial Managers (EFM) package of bills in the House on Tuesday it’s not much of a stretch to believe there is a conspiracy afloat to bust public sector unions.
Rick Snyder’s proposed budget cuts $100 million in state revenue sharing to local counties, townships, cities and villages already struggling to balance their budgets because of declining property values, and he proposes a $420 per-pupil cut in public education funding. These cuts will mean more communities and school districts will require an EFM. Now, the news breaks that one of the more conservative members of the Michigan Senate, Sen. Jack Brandenburg, R-Harrison Township, is floating a proposal to cap a school “ districts' fund balance at 15 percent to prevent districts from stashing away too much money from year to year,” according to the Livingston County Daily Press & Argus.
The ending fund balance is money kept in reserve to make sure the budget is balanced in case of an emergency or an unexpected cut. It is also known as a rainy day fund. I wish I had a dollar for every time I sat in a school board meeting or municipal board meeting and heard the auditor say they recommend they keep the ending fund balance at least 15 percent of the total budget.
So, for those school districts that have been good stewards of the money, Republicans want to take it back. It seems Republicans are doing what they can to promote financial insolvency to the locals.
Because the fiscal years for school districts, as well as most municipalities, differs from the state – the budget year for schools starts July 1, for the state it’s Oct. 1 – districts need that fund balance to meet payroll and other necessities because districts do not receive their first school aid checks until Oct. 20 when teachers start work in July. With the safety of the fund balance they will be forced to borrow money to meet payroll, incurring more costs in interest payments.
Brandenburg has not yet introduced the bill. In fact, despite the fact that he is a member of the majority party and session has been underway for more than three months, he has not introduced a single bill or resolution.