TEMPERANCE - The Michigan Department of Education has given Bedford Public Schools until Dec. 15 to come up with a plan to reduce the growing budget deficit projected for next June.
The notice from the state education agency follows the Board of Education's approval in June of a $41.5 million spending plan that forecasts the district will deplete $798,000 in savings and end up more than $500,000 in the red.
"We were required to notify the state that we could be in a deficit," Superintendent Ted Magrum said.
"The state was notified after the budget was approved by the board."
The projected $500,000 deficit in the 2010-11 budget was based on forecasts Michigan lawmakers would restore $35 of the per-pupil funding cuts that were dealt to public schools last year.
However, the budget bill signed into law last month by Gov. Jennifer Granholm restored only $11 of the per-student cuts.
With the extra $11 per student earmarked in the budget bill, the deficit facing Bedford schools likely will be closer to $1.1 million, said Josh Dyer, the district's chief financial officer.
If the district doesn't come up with a plan to reduce the budget, the state still will cut off per-pupil funding - the district's main source of income, according to the July 13 letter sent to Mr. Magrum.
"We would expect the school board and administration to begin working on the [deficit elimination plan] now," the letter said.
Mr. Magrum said any plan to resolve the financial crisis will be tied to ongoing contract negotiations with the district's nine unions.
Contracts with all the bargaining groups, including the 308-member Bedford Education Association, expired June 30.
"If we would settle our contracts and have savings from that, we could submit a revised budget that shows the state we are out of the deficit," Mr. Magrum said.
"We would then have to follow that plan."
Jan Ellis, spokesman for the state Department of Education, said 41 school districts filed deficit elimination plans last year.