1. 2011-12 Budget Review and Statistical Summary Ravenna Public Schools MAY 4, 2011

2. Governor’s School Aid Budget Plans

3. Governor’s Proposal & Information from Lansing

4. Governor’s Proposal 2011-12 Shift of Tax Burden January REC State General Fund ($1.2B) shortfall Eliminate Michigan Business Tax ($2.2 B) (($750M for Schools)) Eliminate Earned Income Credit (working poor) Cut Higher Ed 15% Cut Revenue Sharing to Cities and Municipalities 34% New Corporate Tax $700M Tax pensions $300M Prepare 2 year budget cycle

5. Governor’s Proposal 2011-12 Education Cuts Significant Cuts and Shifting Expenses to K-12 (SAF Balance Sheet Handout) School Aid Fund estimated to begin the year with $507M MBT Elimination reduces SAF by $750M Funds from K-12 to pay for Higher Education $896M Cut $470 - $773 per FTE (Muskegon County) Other Categorical cuts Ex. Declining Enrollment, ISD’s 5%, Equalization Cuts FICA and Retirement for Center Programs, etc. Increase of MPSERS rate from 20.66% to 24.46% and to 27.37% in 2012-13

6. Other Factors ARRA & EduJobs Elimination $500M Tax Base Reductions (ACT 18) Contractual Obligations (Steps, Health Care, Utilities, etc.)

7. SHARED SACRIFICE? Proposed cuts by dept. as % of prior year: Dept. of Education-10.3% School Aid- 7.3% Agriculture- 6.5% Civil Rights- 5.3% Executive Office- 5.0% Higher Education- 3.6% State Police- 2.1% Legislature- 1.2% Community Health- 1.1% Human Services- 0.8% Energy, Labor, Econ. Growth- 0.4%

8. SHARED SACRIFICE (CONT.) Dept. that would see increased funding: Transportation+4.4% Tech Management and Budget+3.9% Environmental Quality+2.6% Natural Resources+2.1% Treasury+1.7% Military/Veteran Affairs+1.6% Attorney General+1.3% Corrections+0.2%

9. CURRENT PROPOSED LEGISLATION SB 7/ HB 4172 Mandates all public employees contribute 20% toward health care* HB 4152 Freezes wages, steps, and benefits after expiration of contract during successor contract negotiations HB 4241 Totally eliminates tenure

10. Proposed Legislation cont. HB 4320 Requires comprehensive performance evals for tenured teachers. HB 4306 Mandates competitive bids for non- instructional services (Transportation, Food Service, Custodial/Maintenance, Secretaries) HB 4059 Stops schools from using tax dollars to pay for union representatives that do not teach.

11. Emergency Financial Managers On March 16, Gov. Snyder signed into law proposed changes to the Emergency Financial Manager Law EFM’s will be enacted to districts who are in Financial Distress. (Deficit Districts) Currently there are 40+ Public School Districts in Deficit in Michigan. That number is projected to triple by the 2012-13 school year.

12. Appointed EFM’s granted responsibilities EFM may modify, terminate, and/or renegotiate contracts EFM may create an academic Educational Plan for the District EFM may eliminate the salary and benefits of the Superintendent and the School Board. EFM may eliminate the power of the Superintendent and the School Board. EFM may exempt the School District from collective bargaining for 5 years

13. What this means for Ravenna Public Schools

14. REVENUE AND EXPENDITURES TREND FOR RAVENNA PUBLIC SCHOOLS School YearRevenueExpenditures 2004-05$8,890,589$9,079,396 2005-06$9,347,979$9,768,183 2006-07$9,211,647$9,337,139 2007-08$9,906,987$9,743,562 2008-09$9,967,240$9,916,582 2009-10$9,707,029$9,945,267 2010-11*$9,611,611$9,977,464 ((2011-12))**$8,996,507$10,506,357

15. 2011-12 Budget Assumptions FTE $7316 - $470 = $6846 ($447,320) Reduced ACT 18 ($130,000) Increase in utilities($30,000) Insurance Increase (est. 18%)($249,314) Student count flat 1025 students($0) No Changes in staffing/spending

16. 2011-12 Budget Absolutes Wage Increases($61,473) Retirement Increase($268,164) Carry over expenses 10-11($365,853)

17. PROPOSED BUDGET 2010 - 2012 (ESTIMATE BASED ON CURRENT INFORMATION) 2010 – 11 (December) 2011-12 (Proposed) Difference 10/11-11/12 Revenue$9,611,611$8,996,507($615,104) Expenditures$9,997,464$10,508,266($530,802) Fund Balance $595,460$229,607($365,853) Proj. Fund Balance $229,607($1,282,152)($1.5 mil)

19. BOTTOM LINE: WE NEED TO FIND $1.2 MILLION IN REDUCTIONS TO HAVE A ($0) FUND BALANCE

20. DEFICIT BUDGETS The significant changes Borrowing State involvement Emergency Financial Manager Additional Steps a District must take Deficit Elimination Plans

21. MICHIGAN LAWS ON DEFICIT BUDGETS State School Aid Act of 1979 (Sec. 102) A district receiving (State) money under this act shall not adopt or operate under a deficit budget… A district that adopts a current year budget that projects a deficit fund balance shall not receive state funds until an deficit reduction plan is filed and approve by MDE… State aid payments shall be released after MDE approves the deficit reduction plan and current fiscal year budget is balanced.

22. WHY DO WE NEED A FUND BALANCE? To deal with emergencies and provide a cushion against drastic last-minute changes If fall count comes in low or state funding is cut mid- year. A facilities emergency such as a roof repair, boiler replacement, etc., The State of Michigan does not provide any State Aid Payments until October of each year. (Cash-flow) So we are not doing student schedules at the end of August!

23. REDUCTIONS: POSSIBILITIES/SUGGESTIONS PROGRAMS? CLASS SIZE? PRIVATIZATION? CONCESSIONS? ELECTIVES? CONSOLIDATION? TRANSPORTATION? ATHLETICS? STAFFING EXTRA CURRICULARS? LAYOFFS? **THIS IS NOT AN ALL INCLUSIVE LIST

25. A Grassroots effort WHAT YOU NEED TO KNOW!

26. The True Intent of Proposal A Proposal A was passed in 1994 with the promise of stable funding for all MI school districts The School Aid Fund (SAF) at the State level is currently estimated at a 10-11 balance of $507million Without shifts, projected 11-12 balance of $672million (January 2010 REC figure) Without shifts a $260 per pupil increase in per pupil funding for 10-11 instead of $470 cut

27. Key Points Regarding the State Budget: 1.The proposed per pupil reduction of $470 per pupil will be harmful to education and does not represent shared sacrifice 2.For Ravenna the proposed reductions will add up to over $875 per student for 10-11 school year 3.With the proposed cut, classrooms and programs will significantly be affected 4.The proposal will mean loss of jobs in Ravenna 5.The proposal violates the intent of Proposal A 6.The proposal threatens long-term financial stability of MI schools

28. State Legislators Michigan Senate – 34th District – www.senate.mi.gov Goeff Hansen 420 Farnum Building P.O. Box 30036 Lansing, MI 48909-7536 Phone: 517-373-1635 Fax: 517-373-3300 Email: SenGHansen@senate.michigan.gov Website: www.senate.michigan.gov/gop/senators/Hansen.asp?District=34 www.senate.michigan.gov/gop/senators/Hansen.asp?District=34

29. Michigan House of Representatives – www.house.mi.gov 91st District Holly Hughes N-1195 House Office Building P.O. Box 30014 Lansing, MI 48909 Phone: 517-373-3436 Toll Free: 877-633-0331 Email: hollyhughes@house.mi.gov Website: www.gophouse.com/welcome.asp?District=091www.gophouse.com/welcome.asp?District=091 92nd District Marcia Hovey-Wright N-1196 House Office Building P.O. Box 30014 Lansing, MI 48909 Phone: 517-373-2646 Toll Free: 877-411-3684 Fax: 517-373-9646 Email: marciahoveywright@house.mi.gov Website: http://092.housedems.comhttp://092.housedems.com