LANSING — The Lansing School District Board of Education on June 26 approved a scaled-back budget that dips deep into the district’s savings for the 2025-26 school year.
The $263 million spending plan for next year is lower than the $276 million plan that ends July 1, although it’s not clear why board members OK’d a smaller budget after several years of growing financial plans. District officials declined to comment June 26 and June 27.
The five board members who were in attendance voted unanimously on the plan while state funding remains uncertain. The GOP-led state House and Democratic-controlled Senate are far apart on how they would like to see schools funded, and both sides and Gov. Gretchen Whitmer continue to negotiate.
Current per-pupil funding is $9,608 per student. The Senate wants $10,008 per-pupil and more money to be available in grant funding for items like school safety and at-risk students. The House wants $10,025 in per-pupil funding, and for existing grants to be rolled into block funding distributed equally across Michigan’s districts.
The Legislature has traditionally tried to arrive at a budget agreement early in the spring or summer to allow local public school districts to know what their funding is going to be before their new fiscal years begin July 1.
Budget relies heavily on grants
The district’s new budget shows a reliance on state, federal and local grants. About $97.7 million, or nearly 40% of the budget, is expected to come from these sources. That’s nearly $20 million more than the district expected to receive in grant funding last year.
But several of the grants LSD relies on from the federal and state government might not exist in their current forms once the budgets are approved. President Donald Trump’s budget proposes $12 billion in cuts to the U.S. Department of Education and eliminates several grants and rolls others into block funding, EdWeek reported in June. The state House K-12 budget proposal has a similar proposal for state grants that the district has benefitted from.
The district appears confident that all of the grant funding will be available, based on an statement sent the afternoon of June 27.
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“The district won numerous new grants, including funds for construction, specifically a new track at Everett, upgrades to Sexton and Lansing Tech, as well as grants for EV buses and chargers, totaling over $20 million in new grant money for the year,” the statement read.
The district is also budgeting for about 9,600 students, down from 9,776 this year. Those 176 students represent about $1.7 million in state appropriations. However, school districts tend to be conservative when estimating the number of students they will have when making their budgets.
Dipping deeply into savings
The district also plans to use more than 20% of its fund balance to bridge the gap in the new budget, the second consecutive year it has dipped into its savings to balance its spending plan.
The district had a fund balance of $57.5 million – or about 25% of its annual budget at the time – at the end of the 2023-24 fiscal year, but used $6.4 million last summer to balance the current budget and expects to spend about $11.5 million in savings to fund the coming school year. That will leave the district with a fund balance of about 15% of its budget. The state requires districts to keep 5% of their budgets in a fund balance or face financial oversight. The Michigan School Business Officials, an association of district business officers, recommends that districts have a fund balance of 15% to 20% of their budget.
“This initial budget does show the district purposely dipping into its fund balance in order to upgrade facilities and invest more money into our students,” the district’s unsigned statement read. “However, this initial budget, like all previous years, is done with very conservative estimates of both our student enrollment and fiscal allotment from the state. Like in years past, we will recognize millions of dollars of savings as we progress through the year and estimate our true use of fund balance to be around $5-$6 million when we submit the final 2025-2026 budget in June 2026.”
Officials decline to discuss the budget
Lansing schools officials refused to answer questions about the $11 million shortfall, where the increase in grant funding would come from and what happens to programs funded by grants if they are cut.
Kim Adams, assistant superintendent for finance and budget, initially told a State Journal reporter before the June 26 board meeting that she was happy to answer questions about the budget. However, shortly after the conversation began, Deputy Superintendent of Schools Jessica Benavides pulled Adams aside and both she and Superintendent Ben Shuldiner spoke to Adams. Adams then told the State Journal she would prefer to answer questions alongside Bob Kolt, a private communications firm CEO who is paid by the district.
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Adams and Shuldiner declined interview requests during a hour-long break in the meeting, and Shuldiner said in an email on June 27 he would answer written questions sent via email. School board President Robin Moore did not return a message left seeking comment.
Impacts from grant cuts might not be felt this year, said Jason Helsen, associate executive director of the Michigan School Business Officials. But, he said, districts need to have a plan if grants are cut.
What is funded by grants
About 345 staff members at the district are paid for through grant funding, the district’s budget overview shows. If those grants were canceled, the district would have to cut those positions, dip further into its fund balance to pay for them or find another funding source. The district has about 1,000 employees.
Lansing schools is currently expected to receive millions in the coming years on several grants that are under consideration by the federal government for consolidation or elimination, including those for school safety and magnet schools.
District officials did not specifically say what would happen if those grants were cut and if there was a plan in place to fund grant-funded programs.
“One thing I do want to add is we have a lot of different grants from a lot of different places,” Shuldiner told board members during the meeting. “… So even if the federal government does take away more of the grants than they’ve already taken away, it won’t bring the grant category all the way to zero … I love that we get so much grant money but it always concerns me how much of our budget is grant derived … As of now, we feel comfortable with this budget. Tomorrow, who knows.”
Contact Sarah Atwood at satwood@lsj.com. Follow her on X @sarahmatwood.
This article originally appeared on Lansing State Journal: Lansing school board approves using 20% of district’s savings to balance 2025-26 budget
Reporting by Sarah Atwood, Lansing State Journal / Lansing State Journal
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