Board hears state budget implications: family application rules, one-time funding and program offsets raise concern

District leaders told the board on Oct. 8 that Michigan—s recently enacted school-aid budget raises both new revenue and new reporting or eligibility requirements that will affect Milan Area Schools.

Superintendent McMahon and Business Manager Krista Hendricks said the foundation allowance increased by about $442 per pupil (to approximately $10,050) and that Milan—s share of a 25 percent increase in at-risk funding may be about $263,000. They noted, however, that the state budget also includes offsets and reclassifications. McMahon and Hendricks said the district had already budgeted conservatively for the expected foundation change and that the net financial effect will be smaller after offsets.

Staff and board members raised several areas of concern. Hendricks reported language under discussion that appeared to require districts to obtain free-and-reduced-price meal applications for every student or risk a 5 percent reduction in state aid; she said state rules and reporting details are not yet finalized and called the potential requirement "concerning." The board also discussed new conditions tied to some school-safety grants, including draft language that would require a waiver allowing a state-appointed investigator after a mass casualty event; legal and insurance implications are unresolved and MASB and MSBO are monitoring and advocating on the issue.

Other changes noted by staff include shifts of several programs from ongoing to one-time funding (for example, some mental-health and CTE-related dollars) and cuts to certain literacy grants and adult-education funding. Hendricks said an elimination or reduction of some literacy grants would reduce Milan's revenue by roughly $24,000 but staff expect to cover certain positions with the at-risk increase; she emphasized that many details depend on forthcoming state rules and allocations.

Board members used the discussion to flag concerns about planning for negotiations and operations while revenue streams remain uncertain. Several members said the district should continue conservative budgeting and rebuild fund balance, referencing auditor advice in the same meeting. The board did not take formal action on state budget items during the Oct. 8 meeting; staff said they will continue to interpret state guidance as rules and allocations are released and present follow-up recommendations to the board.