GRPS anticipates $8M shortfall next year

A June 15, 2015 meeting of the Grand Rapids Public Schools Board of Education.

GRAND RAPIDS, Mich. (WOOD) — Grand Rapids Public Schools plans to have an $8 million shortfall next school year due in large part, officials say, to state funding not keeping up with increased costs.

GRPS is not the only district to point to lagging state funding as the reason for budget shortfalls. East Grand Rapids Public Schools, for example, is also dealing with a similar shortfall for the next school year and pointing at lack of funding Lansing.

“The funding from Lansing is just not keeping up with our costs,” GRPS spokesperson John Helmholdt said at a Monday meeting of the school board. “We would need a 1,000 student increase just to break even.”

A budget presentation estimated that GRPS would receive an additional $1,300 per student from the state each year if funding kept up with cost of living increases.

The $8 million shortfall is due to less state funding for the next school year, normal inflation, retirement cost increases, about $3.3 million in “excess costs from prior years” and $2.4 million in “compensation/benefits increases.”

GRPS board President Dr. Tony Baker cautioned board members that the increased pay to staff “shouldn’t be looked at as irresponsible spending.” He said that it was merely bringing pay up to levels commensurate with other area districts.

Budget deficits and shortfalls are nothing new to West Michigan’s largest school district, but they are optimistic moving forward.

In terms of enrollment, GRPS lost fewer than 50 students last school year, when the district planned to lose 400. For the next school year, the district plans to maintain positive momentum and lose only 14 students. The district anticipates special theme schools, like the Museum School and CA Frost, will actually help the district gain students.

Each student brings more than $7,000 in state aid to the district.

GRPS said at a board presentation Monday night that it plans to eliminate a total of 46 positions, 40 of which are currently unfilled vacancies.

“We really need to maximize all the dollars to do the best for the entire system,” Superintendent Teresa Weatherall Neal said.

The proposed budget would leave GRPS with a fund balance of 5.3 percent of their operating budget, or about $8 million. The board has a policy of maintaining at least a 5 percent fund balance.

Larry Oberst, the chief financial officer for GRPS, said that the budget means that there won’t be any “wiggle room” in the future.

“We are just one market disaster from being in a bad boat,” Oberst cautioned the board. He agreed that “We can’t get where we need to go by simply cutting.”

The board plans to vote on the budget next week.

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