Gros Cap Approves Budget, Awaits Hits From Energy, Business Tax Costs
By Paul Gingras

The Moran Township School Board of Education adopted its 2007/2008 budget Monday, November 19, a financial plan based on $1,072,905 in projected revenues and $1,044,560 in expenditures for school operations. If no changes are made during the year, the school will add $28,345 to its savings, bringing it to $309,078. Gros Cap will need the financial cushion, administrators say, owing to anticipated large repayments to energy companies. The new Michigan Business Tax (MBT) is also a concern for Gros Cap, which relies primarily on taxes on second homes and businesses for funding. If the state does not compensate for future revenue lost through the MBT, Gros Cap and 23 other nontraditionally funded schools in the state will take a serious financial hit, board members said.

As of this year's official October count, the kindergartenthrough eighth-grade district had enrolled 89 students, compared to 95 in October 2006.

"There are two bad things happening to this district at the same time," Superintendent Bill Peltier told the school board. "One is the new Michigan Business Tax, which could lower the amount of future taxes [the school district] collects. The second is that we have to pay back taxes that we already spent."

This is not a problem for most Michigan schools, which receive increases in state per-pupil funding to compensate for lost local tax revenue. Schools like Gros Cap, Mackinac Island Public School, and Mackinaw City Public Schools do not receive these perpupil allowances, however, so there is no formula in place by which lost revenue can be recouped.

So far, local superintendents have had no luck explaining the problem to area state legislators, who have several schools like Gros Cap in their jurisdictions. Like many politicians, they are preoccupied with balancing the state budget, Mr. Peltier said.

This year, Gros Cap included $75,000 to repay Enbridge Energy, Edison Sault Electric Company, and Cloverland Electric Cooperative, which are expected to demand payments from area municipalities for allegedly overtaxing them for several years on their personal property. In Moran Township, most of the tax revenue went to Gros Cap, and the school district will have to repay it.

"We do not know if [these repayments] will come due this year," Mr. Peltier said, calling it "a true liability." If the companies do not demand repayment this year, the district may save funds in anticipation of future repayments.

Pointing out highlights in this year's budget, Mr. Peltier noted that although the district does not receive traditional, per-pupil state aid, Gros Cap is slated to receive a state-equity payment of $3,945. per pupil. The funding is designed to boost the income of Michigan's lowest-funded schools.

Gros Cap's budget also includes $37,000 in interest earned on money it kept in the bank last year. Business Manager Lillian Clark noted that the school received approximately 5% interest on its funds. Not all schools generate income this way, she said, noting that one district in the Upper Peninsula received 0% interest on all of its banked money, for three years.

The district will save about $12,000 on special education costs this year, because teacher Jonas Halonan will work only half days, rather than three-quarter days, and the district received $9,000 from the federal government to help pay for special education.

Gros Cap's budget includes two line items totaling $50,000 to replace computers.

Persistent attempts by school administrators to convince the state legislature to allow building and site funding to be used to for technology have gone unheeded, Mr. Peltier said, therefore, "it is time we started budgeting for technology."

In other business, the board approved its line item budget for the school lunch program, expected to cost $57,800. The district expects to bring in $40,800 from local, state, and federal sources. The school will transfer $17,000 from its general fund to make up the difference.

The district will take in $147,711 for its building and site fund and spend $250,000 for improvements to the school, leaving $96,000 in is building-andsite fund savings for future school improvements.