L'Anse Creuse officials outline midyear budget amendment after state funding shifts

L'Anse Creuse Public Schools business official Kathy told the board on Feb. 24 that the district has closed its first bond series and “we do now have the funds, in the district’s, possession,” and that administrators will present a midyear budget amendment in March after several state funding “wild cards” emerged.

Nut graf: The presentation laid out why assumptions made when the board adopted the 2024–25 budget in June no longer match current projections. Officials said one-time COVID-era federal and state grants have largely ended, the legislature changed how retirement (MPSERS) and some categorical funds were allocated, and a supplemental state action may provide some money but is not yet visible on the state aid report. The district expects to use existing surplus to cover this year’s shortfall but warned the board a structural correction is needed for future years.

Kathy, the district business official, summarized timing and mechanics of school funding in Michigan and why the district must wait for state updates. She told the board that state aid timing causes uncertainty early in the school year: “We don't even get our first payment from the state until school has already started,” and she described the district’s reliance on foundation dollars and restricted retirement reimbursements. She said some legislative items that were expected in June changed over the summer and reduced the district’s anticipated $2024–25 revenue by roughly $1 million compared with the June assumptions.

Superintendent Keith Howell framed the next steps as corrective and collaborative: “My hope is this presentation will provide greater information for all of you,” he said, and urged the board to focus on solutions, schedule budget workshops and plan for the 2025–26 budget cycle. Howell said the district will pursue both revenue enhancements and expenditure reductions and asked the board to help set checkpoints to restore fund balance to the 12–15% range the administration considers healthy for a district of this size.

Board members pressed for specifics on the projected shortfall and reserve impact. Board member Shane asked for the underlying financial statements and the trigger that alerted staff to the change in projections; Kathy said the main early indicator was how the state handled MPSERS and other categorical revenues and that additional “wild cards” (including a supplemental and certain one-time allocations) could improve the picture but were not yet finalized on state reports. Kathy said the district currently expects the final adjustment for this year to land in the roughly $5–7 million range and that fund balance would likely finish the year around 8–9% if the district lands at the lower end of that range.

Kathy and Howell emphasized the difference between one-time grant money and ongoing operating revenue: positions added with time-limited COVID funds remain in place even after the money sunsets, creating the structural gap the amendment will address. They said the bond proceeds are separate from the general fund and will be used for capital projects, not salaries or routine repairs; Kathy said the bond closing is complete and the district is investing the proceeds.

Ending: The board directed staff to draft a March midyear amendment for review and to start workshops focused on revenue options and targeted reductions for 2025–26. Howell said he will also meet with state lawmakers in May to discuss school funding concerns.

Votes at a glance

- Agenda amendment (move closed session item J to after M): Motion by Mr. Sellers, second by Mr. De Vazquez; vote 5–1 to approve the amended agenda. - Consent agenda (routine approvals): Motion by Mrs. Ross, support by Mr. Sellers; roll-call approval 6–0. - Consortium agreements/program participation (Curriculum & Instruction): Motion by Mr. Sellers; second Mr. Parske; approved (voice vote recorded as in favor). - Summer tax collection rates (Business Office): Motion to approve; approved 6–0. - MASB Board of Directors (Region 8): Motion by Mrs. Ross to vote for Randall Meiser; roll call vote 4 yes / 2 no; motion carried. - Motion to enter closed session for collective bargaining strategy: Motion by Mr. Doss, second by Mrs. Herndon; roll-call approval 6–0; closed session added at 10:26 p.m.

Speakers quoted in this article come from tonight’s staff presentation and board discussion: Kathy (Business official), Superintendent Keith Howell and board member Shane.