Midland - When does a Reserve become the Plan?

[Shadowninja]

Dearest reader,
Midland Public Schools has now had five years of audits and six years of budgets laid across Lady Budgetdown's ledger.

And unlike some rabbit holes, this one does not end with a smoking crater.

It ends with a question.

For several years, Midland did something financially responsible:

It built reserves.

The General Fund balance climbed to approximately $37.4 million by June 2024.

Then the direction changed.

June 2025 actual:
$35.6 million

June 2026 projected:
$31.9 million

June 2027 projected:
$19.1 million

If the current budget plays out as written, Midland would consume roughly $18.3 million of General Fund balance from its 2024 peak.

That is nearly half.

Now before anyone reaches for the pitchfork, there is an important piece of context.

Midland has a long history of budgeting conservatively.

For four consecutive years, the district finished materially better than its final projected result — by a combined amount approaching $20 million.

So no, Lady Budgetdown is not going to pretend the current $12.8 million projected FY2026-27 shortfall is guaranteed to become a $12.8 million audited loss.

History says otherwise.

But history also says this year is different.

The projected deficit is substantially larger than Midland's previous budgeted shortfalls.

State-source revenue is budgeted down more than $6 million.

Some temporary or uncertain categorical funding is disappearing.

And at the same time, recurring personnel costs remain high.

That matters because staffing is not a one-year expense.

Contracts continue.

Benefits continue.

Retirement costs continue.

Programming continues.

And Midland has made the conscious choice to preserve much of that spending while using reserves as the bridge.

That may be perfectly reasonable.

But bridges are supposed to lead somewhere.

So the question Lady Budgetdown is putting on the ledger is this:

How long is this strategy sustainable?

If Midland is intentionally using reserves while temporary funding disappears, what is the long-term plan to bring recurring spending back in line with recurring revenue?

How much of the current deficit is truly temporary?

How much becomes structural?

And at what point does the reserve stop being a cushion and start becoming the operating plan?

Because there is a very big difference between using savings to weather a transition and using savings to postpone a recurring imbalance.

Midland is not broke.

The receipts do not support that.

But Midland is spending down a reserve that took years to build, and the current projected drawdown is much larger than anything in the previous budget cycle.

That deserves more than a headline about a "$13 million deficit."

It deserves a real answer about what happens after the reserve has done its job.

With receipts and respect.