Happy new year!
For the Saginaw Board of Education and City Council, like most local governing units, the budget year begins July 1, not January 1.
At 5 p.m. on Wednesday, a half-hour earlier than usual, the school board will conduct a public hearing on the fiscal 2023-24 spending plan, with a final vote slated for the following Monday, June 26. Trustees have received a budget presentation from Tamara Johnson, deputy superintendent for fiscal services.
The general budget, separate from the $100 million millage for Saginaw United High and other building projects, is $62.2 million with a $21.3 million rainy day fund. The reserve is 30 percent, or double the 15 percent that is recommended by even the most strict plan-ahead auditors and accountants, and it has been achieved in recent years after a new millennium that began with nearly two decades of financial troubles.
Board members and Superintendent Ramont Roberts point to tighter cost controls and sacrifices for the attainment of the 30 percent reserve, but in some ways they wish the savings amount was lower. Part of the reason for the accumulated bank account has come from schools not operating in-house during the pandemic, and most recently, not being able to fully fill the teaching staff during a national era of shortages, in spite of various pay and training incentives.
Regarding the millage, inflated costs have forced the schools to dip into federal ESSER funds, their version of ARPA, rather than using the entire $60 million infusion to bolster the regular operating budget and add some outreach efforts. Even with that, elementary buildings that lack air conditioning now are dropped from HVAC upgrades despite the multi-million millage.
Property rates for the 2020 Saginaw United/Handley/SASA bond issue will drop to 4.84 mills, down from 6.05. For the 2004 Thompson/Loomis bond, the millage falls to 4.26 mills, down from 5.23. The upcoming year’s reduction is about a dollar for every $1,000 of a home’s market value, which is double the SEV or taxable value. The ’04 millage is due to be paid off within the next decade, while the ’20 bond will extend into the mid-century.
If Wednesday’s budget hearing is similar to meetings during the past two years, it is possible that nobody will speak. Board President Charles Coleman has attributed the lack of attendance to general community satisfaction with the current leadership, along with the ability to view proceedings on spsd.net.
Council looks long-term
Meanwhile, the City Council already has approved a $40.3 million general fund for ’23-24, without a major rainy day fund similar to what the schools have built. This is separate from the special-use ARPA windfall and other special funds, mainly water-sewer. The general fund is the portion with the major shortfalls, compared to the 1960s and ’70s, for basics that are led by police and fire. Saginaw is relying more and more on state police support, while the entire southeast quadrant still lacks its own fire station with the closure of the Hess garage.
Council members Monday again talked about removing a 44-year-old albatross on general fund finances, the 1979 voter-approved property tax limits or “caps” on revenue. Their options to seek a voter reversal, denied in the long-term past but not attempted recently, are a special election within the next 12 months, or waiting until the larger turnout in the ’24 presidential election, similar to the school board’s strategy to win the ’20 millage.
Regardless of the timeline, council members aired concerns that city taxpayers hold them accountable, or blame them, for taxes imposed by other units such as the schools and the county. This repeats laments from leaders who in past eras fought against the caps. At the same time, voters have not elected a pro-tax caps council member since Dr. Walter C. Averill III during the early years, but the City Charter amendment has remained a sticking point.
