LANSING – Jan. 19, 2007.

 LANSING – Lapeer County schools may shoulder a share of the burden to offset this year’s $800 million state deficit and future revenue shortfalls.            

The state’s current $377 million hole for school funding, the largest in the last 10 years, could translate into up to $244 in aid lost per student loss, personnel cuts, early closure for some schools and future uncertainty in borrowing money.

Many lawmakers are searching for ways to prevent tax hikes, while school leaders are bracing for budget cuts.

“I would be very reluctant to raise taxes in this environment when everyone is struggling,” said Sen. Jud Gilbert, R-Algonac, whose district includes Lapeer County.  “We may get to the point where things are so bad that we have no other choice.”

The looming school cuts come as Gov. Jennifer Granholm and lawmakers struggle to a fill a $233 million shortfall in the state general fund, which pays for prisons, health care, state police and other services. 

Gilbert said he hopes to fill the hole through reforming pensions and pooling health care services.  Other legislators are considering cutting school programs and funding, raising taxes or a combination.

“It’s pretty depressing because you look at all of the options and none of them are pleasant,” said Budget Director Bob Emerson.  “We’re still assessing our options.”

Schools will receive more detailed information on the effects of the cuts in early February when Granholm gives her State of the State Address and introduces her plan for the fiscal year that begins on Oct. 1.

The trend of large cuts is expected to continue into 2007 with a School Aid Fund hole of $302 million.

Don Wotruba, director of legislative affairs for the Michigan Association of School Boards, said cuts will create havoc for schools attempting to borrow money.

Superintendent of North Branch schools Alan Piwinski said that although his district has been able to buffer the cuts due to increased enrollment, he worries about the future.

“If they give us next year what they gave us this year, we’ll still be in the red,” Piwinski said. 

The effects could be felt as early as March 20, the next pay period for schools, Wotruba said.  Closure of buildings and discontinuation of services, such as busing, may provide ways to deal with the cuts.

Economic specialists from the University of Michigan and the W.E. Upjohn Institute for Employment Research in Kalamazoo attributed the large state deficit to high energy prices, a lack of flexibility in consumer and household finances, a collapsed housing market and the declining market share of the Big Three domestic automakers.

Granholm and lawmakers are anticipating a deficit of $917 million in the general and school funds in the 2008 fiscal year.

George Fulton of U-M’s Research Seminar in Quantitative Economics said a rising unemployment rate and lost taxes will drag the economy down in the future.

Fulton predicted that the state won’t return to its 2000 employment levels until 2020.

State Treasurer Bob Kleine said the state’s financial hurdles come as no surprise. 

“November was the point when our revenues came in unexpectedly low.  We knew we were going to have to make revisions,” Kleine said.  “We have a major hole.”