Midland Public Schools board approves 2026'7 general fund budget, plans strategic reserve drawdown

The Midland Public Schools Board of Education on June 22 approved the district's fiscal year 2026'7 general fund operating budget, agreeing to draw down reserves to manage a projected shortfall while directing continued review by its FFO study committee.

Anna, the district's budget presenter, told the board the workshop held in April presented exploratory scenarios rather than a final plan and that staff refined those projections before producing the proposed FY27 budget. She said the district moved from an adjusted June FY26 base of about $113.88 million toward projected FY27 revenues of roughly $106.5 million, citing a $250-per-pupil allowance increase (about $1.8 million) partly offset by an approximate $0.4 million enrollment decline, roughly $7 million in MYPERS changes, an estimated $8 million related to 31A adjustments and about $1.1 million in federal grant timing and categorical uncertainty. She said federal grants were budgeted at 85% because of grant cycle timing and state budget uncertainty.

Anna said the budget workshop showed a $16.9 million shortfall after an initial set of assumptions; subsequent refinements reduced that projected gap to about $15.2 million. She told the board the proposed budget also builds in a historical variance (roughly a 2% contingency) and that accounting for that variance effectively reduces the working shortfall to about $12.8 million. "The workshop's not a final budget," Anna said. "It's just initial scenarios that are serving as early planning frameworks, not fixed realities." She added staff typically include a variance that historically narrows the gap, explaining it adds back roughly $2.4 million in this budget.

Board members acknowledged the work to pare discretionary spending and emphasized the policy choice to use reserves to avoid immediate layoffs or broad service cuts. One board member praised the two'year approach focusing on attrition rather than forced layoffs; another urged more frequent committee-level updates so the full board is not surprised by late-stage changes. Several members pointed to the district's history of maintaining a sizable fund balance and said intentionally stepping it down is preferable to abrupt personnel reductions. "These reserves were meant to absorb external funding cliffs," Anna said, describing the drawdown as a "strategic" move to preserve classroom services while program audits and enrollment efforts continue.

On the expenditure side, Anna said roughly 84% of district spending supports salaries, pensions and benefits; FY27 increases in the proposal include about $2.5 million for salaries and $1 million for benefits, with departments identifying approximately $1.5 million in reductions across supplies, purchased services and capital outlay. She also noted a modest increase in transfers (about $0.4 million) tied in part to Midland County ESA costs.

Board members asked for clearer committee timing and said FFO, the study committee charged with financial oversight, will continue to monitor implementation. The board also discussed the district's longer'term investments to support enrollment, including the planned Midland Flex Learning Center, which staff said may take multiple years to realize enrollment and revenue benefits.

A motion to approve the FY27 general fund operating budget was moved and seconded on the record. The clerk conducted a roll-call vote: Jen (yes), President Roush (yes), Vice President McFarland (absent), Secretary Ringold (yes), Treasurer Lbach (yes), Member Blazy (yes), Member Craig (yes) and Member Horowitz (yes). The motion passed.

The board directed staff and the FFO study committee to provide ongoing financial updates and additional detail at committee meetings. The meeting moved to a study session discussion and adjourned later that morning.