Benton Harbor school board approves Deficit Reduction Plan

Benton Harbor, Mich. A Southwestern Michigan school district is one step closer to getting the money it needs to make payroll.

The Benton Harbor School Board unanimously approved a revised Deficit Elimination Plan Tuesday.

It's something they have to do every year under state law. But, it's also a requirement for getting an additional loan they've requested.

"It will allow us to continue to operate and have a cash flow so that we can continue to do the district's business," said Superintendent Dr. Leonard Seawood.

The plan outlines potential cuts to help the district reduce its $14 million deficit by the end of the year. Seawood says they won't know which measures need to be implemented until they get an accurate enrollment number, which impacts the amount of funding schools get from the state.

Seawood says it's likely some of the changes will be implemented.

"Some of those changes may have included a reduction in maybe custodial services, maintenance services or security," he said.

The board also approved a Tax Anticipation Note resolution, which will also increase cash flow.

The resolution allows Benton Harbor schools to request bids for a loan based on their future tax collections.

"Cash is very low and we may not be able to make payroll," Seawood said. "So, we're doing that to address the issue with cash flow."

Despite having to make many tough decisions, the school board has successfully balanced the budget for the past two years -- almost unheard of in Benton Harbor.

Seawood says that means they could see a budget surplus as early as 2015.


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