Gros Cap Adjusts Budget for Property Tax Losses
By Paul Gingras

The Moran Township school board made budget adjustments to compensate for revenue lost to the new Michigan Business Tax, approved three-year contracts for part-time Superintendent Bill Peltier and part-time business manager Lillian Clark, and discussed other financial matters affecting the kindergartenthrough eighth-grade Gros Cap school at its Monday, February 18, meeting.

Using the latest information from the Mackinac County clerk's office, the district adjusted its budget to reflect an estimated loss of $30,000 in taxes to the Michigan Business Tax (MBT), which cuts local property taxes and reduces Gros Cap's revenue this year from approximately $914,000 to $884,000, Mr. Peltier said.

Two grants from the Sault Ste. Marie Tribe of Chippewa Indians, received after the budget was proposed, increased the district's general fund by $21,000, so the school took less of a financial hit than expected this year. Owing to the grants, the school was able to fund a popular Reading Recovery program, he said, and pay for building improvements such as shelving and carpets that could not legally be covered by the district's building and site fund.

Taking several smaller financial adjustments into account, the school's net loss is estimated to be $11,858.

Although school districts throughout Michigan will lose local funding through MBT tax cuts, most will receive reimbursements for the lost revenue by an increase in their state aid allowance. Non-traditionally funded districts like Gros Cap, Mackinac Island, Mackinaw City, and 20 more Michigan districts do not receive state aid, and cannot be compensated with this formula.

These districts are funded primarily with local taxes on second homes and businesses.

It is still unclear whether $1.3 million in planned state compensation for these schools will be enough to cover their losses, the board reported.

Mr. Peltier suggested the school board should soon begin to plan for future replacements of computers and computer software, a cost that cannot be funded by the district's 1.75 mill for building and site fund. That millage expires in 2009.

No action was taken on this suggestion at the meeting. The board approved three-year contracts for Mr. Peltier and Mrs. Clark that freeze their salaries for the 2008/2009 school year at last year's rates and include raises for 2009/2010 and 2010/2011.

This school year, Mr. Peltier will be paid $33,250. This is a part-time salary based on 95 days of work at $350 a day. As a school employee, Mr. Peltier is allowed $8,000 for expenses, notably mileage. If all of the $8,000 is not used, a maximum of $2,500 can be directed to a tax-deferred annuity for him. He also receives an employer match to Social Security.

In 2009/2010, he will receive a $25 per day increase, raising his salary to $35,625. In 2010/2011, he will receive another $25 per day increase, raising his salary to $38,000.

Mr. Peltier's raises average 2.3% a year.

While he said he is happy to serve the district, Mr. Peltier reminded the board that they should be looking for a more permanent superintendent. He is retired from Tahquamenon Area Schools and is serving the district temporarily.

Mrs. Clark is not a school employee. For her services, the board renewed a contract with Newberry-based C&C's Pine Grove Service Incorporated. She receives mileage but no fringe benefits. Also part-time, Mrs. Clark will be paid $200 per day for 90 days of service for the 2008/2009 school year. She will receive a maximum of $23,000, depending on the amount she draws for mileage reimbursement. In 2009/2010, she will receive a $20 per day increase, raising her salary to a maximum of $24,800, for 90 days of service. In 2010/2011, she will receive a second $20 per day increase, raising her salary to a maximum of $26,600, for 90 days of service.

This year, Gros Cap estimates it will have to pay back $96,000 in taxes gleaned from energy companies, which were overtaxed on property in the township. The district has reserved the funds to do so and will pay when the local taxing entity, Moran Township, reaches final agreements with the companies, Mr. Peltier said.