Extra funds from state, federal sources offer short-term relief for Lansing School District

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LANSING, Mich. The Lansing School District prepared for a financially thin year in the midst of the pandemic, but larger-than-expected revenues from state and federal sources have given the district breathing room for the short term.

With a fiscal year that begins in July, the Lansing School District has to budget its year before they know exactly how much funding they will receive from the state, which has a fiscal year running from October to September.

Their initial adopted budget for the 2020-21 fiscal year was based on cautious predictions of state funding, cutting their total budget by about 6% from the previous year. 

As more federal funds became available through the CARES act, the Lansing School District found itself with nearly $20 million, about 9% more than originally budgeted in the spring.

In addition to those emergency funds, the state altered how it measured enrollment for allocating funds. Usually, there are two headcount days that fall within the first week of October for the fall semester and the second week of February for the spring. 

The state allocates per-pupil funding based on 90% of the fall count and 10% of the previous school year’s spring count. For the 2020-21 school year, the state used 75% of the fall count and 25% of the spring count to buffer against sudden drops in enrollment across the state.

The district faced its own enrollment problems, according to its chief financial officer, John Laing. He said the district had budgeted for enrollment of 10,000 students, but the actual enrollment for the year totaled under 9,500. The previous year’s enrollment was 10,400.

“We had lower enrollment than normal for kindergarten. I think a lot of parents were probably doing a gap year, so to speak, because they didn’t want to start school online,” Laing said.

But, according to Laing, the district has been able to cut some expenditures as a result of the district’s switch to online learning. They have saved nearly $2 million in transportation expenses and cut back on utility costs as well. Food expenses did go up as part of a program to continue providing lunches to not only students but parents as well.

Lansing School Board Treasurer Nathan Burroughs said the pandemic has probably had less of an impact on schools’ budgets than people may think. With adequate reserve funds and access to emergency federal funds, the Lansing School District is poised to weather the short-term effects of the pandemic. The relatively unknown long-term effects the pandemic may have on Michigan’s economy and therefore school funding is another story.

“The Michigan education system is woefully underfunded,” Burroughs said. “We no longer stand out in terms of the resources we put into it, and you can see the impacts that that’s had on our test scores.”

When districts aren’t able to pay teachers a competitive wage, that leads to a decrease in teacher quality, according to Burroughs. Some schools are forced to cut extra-curricular programs or require payment to participate. These factors can snowball leading to even lower enrollment and revenues.

“We’ve been pretty flat the last several years,” Laing said. “As with anything that costs a lot more than it used to 15 years ago, our revenues are pretty stagnant, and in essence, no change is a reduction.”