By DANIEL HERATY
Times-Herald Newspapers
HEIGHTS – Officials believe a 10 percent employee pay cut and elimination of art, music and gym teachers is the best of three ways to deal with a looming $2.4 million budget deficit facing Dearborn Heights School District No. 7.
During a presentation of the preliminary budget at Monday’s Board of Education meeting, officials said the district must deal with that gap in order to avoid being taken over by an emergency financial manager.
Business Manager Angela Rudolph outlined cuts that already have come from the state, including decreased funding and increased retirement expenses. She said the foundation allowance, a program that began in 1994 as a way of allocating funds to districts, will be reduced from about $7,300 to about $6,900.
Rudolph said districts statewide are being hit by the disappearance of American Recovery and Reinvestment Act money and reductions in the new budget proposed in February by Gov. Rick Snyder that calls for a foundation allowance reduction of $480.
Rudolph said the cuts would place the district back at 2005-06 levels. The difference, she said, is that the operating expenses were lower – from $23,287,000 to $25,660,000 now, a difference of over $2 million.
“Our retirement rates were lower, our gas bills were lower, everything was lower,” she said.
Rudolph said the district already has taken numerous steps to help alleviate the budget crunch, including reducing funds for new computers to about $5,000.
“We’re just replacing and cannibalizing and putting together what we can,” she said.
Additional cuts have come from eliminating athletics programs, offering an early retirement incentive and privatizing substitute teachers through the Wayne County Regional Educational Service Agency. She said the district also put a cap on employee pay raises.
“We cannot afford to do any pay increases for the next year,” she said, “and will in fact need to look at wage concessions to balance our budget.
“We’ve cut our budget over $2 million the last couple of years,” Rudolph said.
She said about 85 percent of the budget, which comes from state aid that may be eliminated, is made up of employee wages and benefits. Out of every $100, $85.88 goes to pay salary.
Three scenarios were presented as ways to reduce costs. The first, Supt. Jeffrey Bartold said, entails a districtwide pay cut of 10 percent, along with a reduction in teachers of gym, music and art and already is being discussed. He said that is the most preferred route because it wouldn’t involve cutting programs, and because any changes in staff pay would have to be approved by the teachers’ union first.
The second scenario includes health care cuts to cover only an 80 percent premium, eliminating all special education programs and athletics and secondary class offerings. The third scenario includes the health care cap, as well as a 6.5 percent districtwide pay cut and a reduction in support staff.
“We have a lot of different scenarios and ways we can get to the $2 million, but we definitely need to get to the $2 million to keep the district out of deficit,” Rudolph said.
(Daniel Heraty can be reached at [email protected]ications.com.)