ANN ARBOR, Mich. (Michigan News Source) – Ann Arbor Public Schools is draining its savings despite near record-levels of revenue as inflation and increased costs in health insurance and the pension system are the leading causes.
The district received an update on its finances at the Nov. 6 board meeting.
MORE NEWS: ‘Wild Lights’ Brighten the Detroit Zoo
The district’s Fund Balance, which is its reserves, had dropped from a high of $22.3 million in 2021 to $7.14 million in 2024.
The district’s health insurance provider – MESSA – is going to increase its rates by 16%, causing the district to look at ways to reduce health insurance costs.
The district’s contribution to it employees’ retirement pension system has increased from $50.1 million in 2019 to $73.1 million in 2024.
The district was in the red by $5.9 million in 2024 despite budgeting that year for a surplus of $6.5 million.
The district found itself in red ink despite record levels of revenue.
General Fund revenues have increased from $256.4 million in 2019 to $316.6 million in 2024. The 2019 revenue increases to $314.5 million when adjusted for inflation which gives an insight into how much inflation has eaten into the district’s budget.
MORE NEWS: Guaranteed Income Programs Pop Up Nationwide With Help From Federal Pandemic Relief Money
Ann Arbor Public Schools stated in the documents that it devoted much of the federal pandemic funding to employees’ compensation. The cost of employees’ salaries and benefits has increased from $197.8 million in 2019 to $233.6 million in 2024.
The district’s enrollment has been flat over the past nine years. The district had 16,844 students in 2014-15 and 16,764 in 2023-24. Enrollment peaked at 17,962 in 2018-19 but like most school districts, Ann Arbor has seen a drop in the number of students post-pandemic.
The district said, “Passage of the 2024-2025 budget placed our district on a sustainable fiscal path so we can move beyond state oversight and reporting requirements while maintaining a healthy fund balance,” said Andrew Cluley, the school district spokesman in an email to Michigan News Source.
Leave a Comment
COMMENTS POLICY: We have no tolerance for messages of violence, racism, vulgarity, obscenity or other such discourteous behavior. Thank you for contributing to a respectful and useful online dialogue.