Birmingham Schools budget shortfall goes from $1.6 million to $14 million – Detroit Free Press

Birmingham Public Schools miscalculated its budget by $11 million this year, and finance officials revised the district’s estimated shortfall from $1.6 million to $14.3 million. 

The district also revealed in a finance update at the end of February that it has been overcharging property taxpayers in the district, and that the error will result in a credit to taxpayers. The overcharge this year amounted to $2.2 million, according to Maria Gistinger, interim assistant superintendent for business services. 

The dramatic revision in the budget’s expected shortfall is unusual for a school district. It’s still unclear how exactly the district amassed such a shortfall, which is equivalent to about 10% of the district’s general fund spending.

Birmingham officials did not respond to an interview request from the Detroit Free Press, but shared a statement to community members that the district overestimated student enrollment numbers while underestimating salary, health insurance, payroll tax, retirement and other benefit costs.

Superintendent Embekka Roberson wrote in a letter to the community that the district planned to share more updates about the shortfall going forward. 

“We can and will do this transparently and responsibly with minimal impact on our students’ education,” she wrote. “We will keep our families, staff, and students updated on this situation in the days ahead.”

Nearly 7,400 students attend Birmingham Public Schools, a district in Oakland County.

The district lost 186 students between this school year and last, according to state data. Schools in Michigan are funded per student. Birmingham officials wrote that the district originally projected it would receive $6 million more in state aid and property taxes than it actually did. 

Craig Thiel — research director at the Citizens Research Council of Michigan, a nonprofit government research organization based in Livonia — said now that the district is well into the budget year, which ends about four months from now on June 30, it likely has a much clearer picture of its spending.

But Thiel also said the high discrepancy between the original budget reported by Birmingham and the amended budget reported this month is unusual. 

What happens next? 

The district has a rainy day fund balance of $20 million, but Birmingham’s policy allows it to use only about $3 million to $4 million toward addressing the shortfall, according to a district Q&A about the budget. 

The district only vaguely addressed whether there would be budget cuts to address the shortfall. Officials wrote in the Q&A that Birmingham’s leadership team would first explore “other funding avenues at the federal and state levels, seeking cost-saving opportunities, expanding revenue generating programs, and creating a long-term financial planning process.” 

“If the structural deficit persists or gets worse, we will have to make tough choices and difficult adjustments in the weeks and months ahead,” reads the Q&A. 

The district also wrote that it is planning to strengthen its exit process to help retain students who might be planning to leave to stem enrollment loss. 

It’s unclear how tax credits will come to property owners who were overcharged. The district has pledged to work with its auditors and attorneys to more accurately calculate its millage rate. Gistinger wrote that this year, the district miscalculated enrollment numbers and property tax values, which led to the over-levy. Taxpayers can expect a lower millage rate next year to compensate, she wrote.

Spokesperson Anne Cron wrote in an email that the district’s school board will be reviewing and voting on the amended budget at its next regular meeting at 7 p.m. March 15.

Contact Lily Altavena: laltavena@freepress.com or follow her on Twitter @LilyAlta.