Dearborn board gets first look at 2025–26 budget; administration projects about $6 million shortfall

Mr. Thomas Wall, presenting for business services, gave the Board of Education a first look at the Dearborn City School District’s 2025–26 budget on April 14, saying the presentation is built on assumptions because the state legislative process has not produced final numbers.

“We are required by law to have a budget hearing prior to the budget adoption by July 1,” Wall said, noting the district will hold a public budget hearing in May and must adopt a budget by July 1 even though some state figures may still be unresolved.

Wall summarized the administration’s assumptions and the major forces shaping next year’s budget. He said the governor has proposed a plan that would raise the foundation allowance by roughly $400 per pupil — bringing the foundation allowance to about $10,300 in the administration’s estimates — but that the House and Senate still need to reconcile differences and finalize numbers after May revenue updates. Wall also said the state-level revenue consensus in January showed higher revenue than earlier projections and that, at the statewide level, there remains about $1 billion in the school-aid fund available for distribution.

On sources of district funding, Wall told the board that federal funds account for about 9% of the district’s school-aid-related resources and are important for programs serving economically disadvantaged and English learner students. He also reminded trustees that district ESSER (federal pandemic) funds have been exhausted; reimbursements past the September 30, 2024 deadline were not available for the district.

Wall reviewed enrollment trends the district uses for projections and said state student counts peaked in the early 2000s and have since fallen by roughly 19% statewide, while noting Dearborn’s local trends have differed from the statewide pattern. The administration’s model for next year uses a mix of the most recent fall and spring counts (90% fall, 10% prior spring) and projects a modest net enrollment increase for Dearborn when compared with last year’s adopted counts.

Using current contract language and the governor’s proposal, staff estimated compensation increases in the 3.5–4% range for bargaining groups (2% base plus a portion tied to any foundation increase). Wall said retirement contribution rates that dipped in the prior year are proposed to rise again under the governor’s plan, creating added pressure on personnel costs.

Bringing assumptions together, Wall said the district’s most likely scenario at present shows an operational deficit of roughly $6,000,000 — about 2% of the district’s budget — before any planned use of fund balance. He emphasized that no personnel layoff decisions have been made and that administration will produce multiple budget scenarios and recommendations in the coming weeks.

“We’ll have different options,” Wall said, describing a multi-step process in which the administration and board will review best-case, worst-case and most-likely scenarios, hold a public budget hearing in May and adopt a budget in June. He also asked trustees to expect additional finance-committee work as staff develops options.

Trustees asked questions about the composition of staff and the drivers of the shortfall; the board asked administration for additional charts breaking out instructional, non-instructional and exempt employees in both headcount and dollar terms for upcoming work sessions.

Wall flagged capital and infrastructure pressures as another emerging issue: ESSER-driven capital work is winding down, leaving fewer one-time federal dollars to address deferred maintenance. He said the district is preparing to present findings from the architectural firm Quinn Evans and to schedule an extended work session so trustees can review infrastructure recommendations before broader community engagement.

Next steps: staff will produce more detailed assumptions and modelling, the board will hold a budget hearing in May, the finance committee will meet to review bond and fund-balance options, and the board is scheduled to consider final adoption in June.