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This page contains information regarding the impact the current school funding formula is having on Utica Community Schools.
Below is a short list questions and answers regarding school funding and Utica Community Schools. At the right area is a series of links regarding this issue.
Questions and Answers
1) What is the financial issue facing Utica Community Schools?
Stagnant state funding compounded by declining enrollment has created underfunding for Utica Community Schools. Over the past ten years, the UCS foundation allowance has increased only $60 per pupil, or an average of $6 per pupil per year.
2) Why do state lawmakers have the responsibility for determining how much revenue goes to school districts?
The state collects property and other taxes to support the school aid fund and redistributes these dollars to Michigan school districts. This process was established when voters approved Proposal A in 1994. In other words, school districts are financially dependent on the state for funding.
3) Why is there such funding disparity between districts?
The differences in per pupil funding have their roots in the funding levels that existed prior to the implementation of Proposal A in 1994. Communities that had a higher tax base and voter approved millage rate had greater revenue for each student. Proposal A locked school districts into their relative positions and local communities no longer have the ability to change their district's funding level.
4) What is the current funding method for school districts?
School districts receive a state set foundation allowance for each student. Currently, Michigan lawmakers also use what is referred to as a “2x formula.” In recent years, this formula along with equity payments have been used by state lawmakers to close the gap between lower-funded school districts – or those at minimum foundation levels – and those who receive more per pupil. The 2x formula and equity payments have redirected funding increases to the minimum foundation level school districts.
5) Compared to other school districts, what is UCS per pupil funding?
Per pupil school funding in Michigan ranges from a maximum (hold harmless) of $15,616 to the minimum foundation level of $7,511. Currently, the UCS per pupil foundation allowance is $7,684. By comparison, UCS is one of 92 school districts funded slightly above the minimum level and below the maximum level. There are a total of 841 school districts and public school academies (charter schools) in the state.
6) How does student enrollment impact revenue?
The district’s overall funding is directly linked to total enrollment of students. Simply stated, the foundation allowance X student enrollment = state funding.
7) With all of the new houses being built, why is enrollment declining?
New housing will not offset the impact of fewer births and an aging population in the district. A recent report from regional planning agency Southeast Michigan Council of Governments (SEMCOG) indicates that falling birth rates will reduce the number of school-age children in Southeast Michigan by 13 percent from 2010 to 2020.
8) We approved a bond issue in 2009. Can those funds be used to cover operating costs?
No. By law, bond funds may only be used for voter approved purposes for infrastructure improvements - such as roofs, boilers, flooring and technology. It is against the law to use bond funds for day-to-day operations such as utilities, curriculum materials or salaries.
9) How has the district addressed its financial challenges?
Utica Community Schools has addressed its financial challenges through cost containment, reductions and a strategic use of its Fund Equity. Over the past 13 years, the district has made $115.7 million in reductions, including employee concessions, elimination of services, closing four elementary schools and the elimination of more than 900 FTE staff positions. Additionally, employees are contributing to their own healthcare and retirement.
A complete list of UCS reductions is available at: uticak12.org/funding
10) What is Fund Equity?
Fund Equity functions as the working capital to support cash needs for expenditures that occur prior to state aid being received by districts. Each year, the first state aid payment is not received until late October while the district's fiscal year begins in July.
11) What has UCS done to address declining enrollment and declining revenue?
As enrollment has declined due to a declining birth rate, UCS has worked to offset related revenue loss with Schools of Choice. In 2015-2016, Schools of Choice participation generated $14.9 million in revenue. As a public school district, UCS cannot generate additional revenue through a millage or tax increase for operational purposes.
12) What is the resolution for the school funding issue?
UCS will continue to be cost effective through cost containment and reduction efforts. Without additional revenue it will be very difficult to balance the budget. The reality is that the district will not be able to cut its way to prosperity.
13) How can I get more information?
Please e-mail firstname.lastname@example.org