Tecumseh Schools face financial challenges as revenues decline
By Bill Wright, Chief Financial Officer, Tecumseh Public Schools
Last week, the forecast for the shortfall in the revenue for the Tecumseh Public Schools was highlighted. In the current fiscal year (FY), 2009-2010, TPS will be forced to operate on $1,890,572 (or 8.1%) less formula revenue than the prior fiscal year, 2008-2009. State aid formula revenue is defined as the district foundation allowance (FA) multiplied by the district student enrollment. In FY-2010-2011, the situation is projected to deteriorate as the formula revenue will yield $2,739,476 (or 12.7%) less than the current year. When combined, next year’s (2010-2011) state aid formula will yield $4,630,048 (or 19.8%) less than last year (2008-2009). As we discussed, the shortfall in formula revenue is based on two factors; declining student enrollment and cuts in the state school aid foundation allowance. For next year (2010-2011) the formula revenue is only slightly above (less than $10,000 above) the formula revenue in the 1999-2000 fiscal year, eleven years ago.
With the steep declines in revenue, expenditures have naturally continued to rise. With the majority, or about 85% of the TPS budget allocated to staff salaries and benefits, much of the overall increase in district expenditures can be attributed to those expenditures typically associated with staff costs. Energy and school supply expenditures have also risen significantly over the past several years.
Submitted by: Bill Wright, TPS Chief Financial Officer