With state funding for Michigan schools unlikely to meet their needs, the time has come for schools to be creative in finding solutions to their budget problems themselves. This is the message two consultants brought to EUP school administrators and school boards recently, and it's a message that Peter Everson, superintendent of the intermediate school district, hopes will be embraced by local administrators.

Mr. Everson called on schools to consider pooling their resources and to minimize the concept of individual districts during the EUP School Board Association meeting at LaSalle High School in St. Ignace Tuesday, October 20.

Some administrators see advantages in such an idea, but also raise questions about distance and a school's identity within its community.

Mike Springsteen, superintendent at St. Ignace Area Schools, told The St. Ignace News that some steps have already been taken to conserve finances. Bus services were consolidated with Moran Township's Gros Cap School, for example.

A centralized office to handle business and payroll for the 11 Eastern Upper Peninsula public school districts and sharing a superintendent could save money, he said, but the logistics and structures of such consolidation would need to be explored carefully. For example, would a single superintendent report to one school board or 11?

Distance is a major challenge facing consolidation of services such as instruction, school officials also note. Districts will have to decide when it would be best to send students out for instruction or to bring instruction in to students, such as with interactive media or traveling teachers.

And some services could lend themselves both to consolidation and privatization. Cafeteria and custodial services are two areas that some districts now outsource to private companies to save money, but they could also be internally managed for efficiency from a consolidated school office, which could also ensure local employment.

A school's identity with its community is yet another concern to local administrators. In larger school districts downstate, a city may have several high schools and a number of elementary and middle schools, but in the E.U.P., most districts have only one of each, if that.

"Towns don't want to lose their identity that this is their school," Mr. Springsteen said, even though many townships already send their children to consolidated schools here.

Keith Krahnke, superintendent of Pickford Public Schools, is skeptical of consolidation. Like Mr. Springsteen, Mr. Krahnke believes distance would make the process difficult. Consolidating programs, for example, would be hard, he noted, considering some districts are 15 to 30 miles away from each other .

Amy Scott, superintendent of Les Cheneaux Community Schools at Cedarville, told The St. Ignace News schools will have to rethink how they are operated. Collaborating with each other to develop innovative ways to overcome the budget crisis is necessary, she said.

Mrs. Scott has been talking with ISD Superintendent Everson about creating a team to brainstorm ways in which to overcome the budget problem. The idea is still in its infancy, she said.

Additional State

Funding Unlikely

Schools here are now strapped for cash more than ever, owing to a proposed $292 per-pupil cut in the state school aid budget. With every effort failing in Lansing to drum up additional funding for schools, administrators are facing the most difficult financial challenge since Proposal A was passed 15 years ago, said Jeff Williams of Public Sector Consultants. He talked with the E.U.P. School Board Association at its October 20 session.

"The temperature right now in Lansing for in the foreseeable future is there are no new revenues, period," Mr. Williams said.

Individually, legislators may be willing to uncover additional funding for the school aid budget, he said. Collectively, however, the votes are not there.

"You can't blame this solely on one party or the other," he said. "There are neither votes in the Democratic House nor are there votes in the Republican Senate to raise revenues. In that sense, we're paralyzed at the moment."

Raising taxes to aid education is failing in Lansing not because legislators are afraid to take a stand, but because they are responding to public sentiment, Mr. Williams believes. While some pockets around Michigan may advocate for it, most people are still too shocked from the downturn in the economy to bear a tax hike.

"I think we're still in a nervous state and I think we're still hoping that the economy improves in the next 12 months,' he said, "but we've been down this road before. It's been a long nine years since, collectively, as a state, we thought we've had a good year economically."

Ultimately, schools across Michigan will be responsible for developing methods to survive cuts in public school aid. Consolidation of services can help, he said, and several schools in Michigan have made such efforts. Consolidating districts that are too small to stand on their own can help, but doing so will not shorten the distance between them, he noted. Some of the biggest savings come from sharing services.

Combining transportation, payroll, and food services have been performed in the past and have led to thousands of dollars in savings, but it has not been enough, he said.

"That's the downside for these districts that have done very, very well for cost savings," he noted. "They've been doing it for a long time, but it's not enough in this current economic climate."

In Michigan, a "Perfect Storm"

Making education more efficient and more effective will require innovative thinking.

What makes Michigan's situation unique from other states is a "perfect storm" of challenges, said Ken Sikkema, a senior policy fellow of Public Sector Consultants. With per-pupil funding rapidly decreasing, the damaging effect on Michigan's economy from the loss of auto manufacturing jobs, federal stimulus funding coming to an end, and a declining school-age population, this state and its schools face great difficulties ahead. By comparison, other states may face one or two of those challenges at once, he added.

Mr. Sikkema notes these are fundamental problems, and are unlikely to change in the near future. For issues such as stimulus funding and school-age population, nothing can be done. Per-pupil funding is unlikely to support schools in the future, so it will be up to educators and administrators to develop their own solutions.

Like Mr. Williams, Mr. Sikkema supports consolidation of services. And with 80% of a district's overhead tied up in salaries and benefits, school employees will likely have to pay more of their health care premiums to relieve some of the financial burden, he said.

"We're not going to be able to enjoy what we've had in the past," Mr. Sikkema said.

Even school districts in good financial shape need to consider consolidation, he said. While such districts may be safe for the next 12 months, he said it is short-sighted to believe they will escape the financial crisis. Everyone will have to take a roll in solving the problem and ensuring a quality education is provided to children, he added.

That will involve overcoming the control issues that come with consolidation.

"As a people, Americans love local control, especially in Michigan and the Midwest. It's not only in our blood, it's in our DNA, as well. Nationally, the number of districts that have willingly consolidated can probably be measured on all your fingers and all your toes. It's a very challenging aspect," he said.

Most schools know consolidation can lead to savings, he said, but knowing and acting are different.

The next step for schools, he said, is to examine several methods of reform such as tax, structure, and budget. The main problem, Mr. Williams said, is that most schools are not prepared to take on all three elements at once. Each can be addressed individually, reducing budget expenses and operating within means, for example, but it may not be as effective as tackling all the methods at once.

Schools need to speak with each other and their Intermediate School Districts to develop reforms and new structures to compensate for the economic and budgetary crisis.

"The time was yesterday. This is real. This is swift," Mr. Williams said of the need for a solution.