Dearborn previews 2025–26 budget assumptions, flags $6 million operational gap pending state decisions

Dearborn City School District officials on April 14 presented assumptions that underlie a draft 2025–26 budget and identified an estimated operational deficit of about $6,000,000 under the district's most likely scenario.

Thomas Wall, chief budget presenter, told the board the district must adopt a budget by state law before July 1 and that the timeline leaves the board to act on assumptions because final state revenue figures are not yet settled. "We're required by law to have a budget hearing prior to the budget adoption by July 1," Wall said. He also said, "There is money available to give to schools for our school funding," describing uncertainty about how much the Legislature will allocate to schools this year.

The presentation emphasized several drivers likely to affect the final district budget: the governor's proposal for roughly a $400 per-pupil increase (which staff said would raise the foundation allowance to about $10,300), lingering enrollment fluctuations, federal and grant funding levels, and rising retirement contribution rates. Wall said that under the district's current assumptions (including a roughly 3.92% foundation increase, an estimated 50 retirements and only modest health-care cost growth), the district still faces an operational shortfall near $6 million, which he characterized as "only 2% of our budget." He said the finance team is developing options to balance the budget without disrupting classroom instruction.

Wall told trustees federal funding accounts for about 9% of the state's school-aid funding shown on his slides, and that foundation and grant mixes have grown more complex in recent years. He also warned that some state-dedicated funds remain subject to legislative change; he pointed to a governor's proposal that would repurpose a dedicated military school-aid fund for roads as an example of how dedicated streams could be altered.

Trustees asked for follow-up detail on staffing and fund-balance use. Trustee Berry said she would not support repeatedly drawing down fund balance to close gaps; Wall and other trustees said the district aims to use reserves strategically and to avoid midyear cuts to classroom services. Wall said staff do not intend to pursue layoffs and will present options to the finance committee and the full board.

Enrollment trends were presented as a key variable. Wall reviewed long-term state and district counts, noting the state's school population peaked decades ago and declined roughly 19% since the early 1930s by his slide summary; he said Dearborn has been an exception historically but is seeing recent downward movement in some grades. Wall said recent enrollment shifts included a loss of roughly 350—80 students referenced in his analysis and that student-count formulas used for foundation funding rely heavily on fall counts (90%) with a smaller spring-count adjustment (10%).

Capital and infrastructure needs also featured in the discussion. Wall said the district finished spending many ESSER (federal pandemic relief) resources on Sept. 30, 2024, and grant-driven staffing and capital projects are declining. He reported the district's architectural consultant, Quinn Evans, has nearly completed a facilities assessment and staff will schedule a roughly one-hour work session for the board to review findings and advise public-engagement plans.

Next steps: Wall told trustees the board will hold a formal budget hearing in May and consider a final budget adoption at the June meeting; both actions, he said, will be based on the best available but still provisional state revenue data. He encouraged trustees to raise questions with staff before the May hearing and noted the finance committee will meet to review options in advance of the board's public hearing.