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      What's The Deal? Part 2

      Over the last year negotiations between both sides have been at extremes.

      Now, they're closer to reaching an agreement.

      On the table, the Marquette School Board is offering a one-step wage hike for teachers and a $500 increase for those not eligible for a step.

      According to Superintendent Bill Saunders, the district can't afford higher wage increases; They've already passed a $650,000 deficit budget.

      "If we project out what those budget deficits are, any body from a business perspective would look at it and say, 'you're out of your mind. What you're going to do is turn those deficits into larger amounts.' So, how are you going to cover those larger deficits if you continue to put higher and higher offers on the table," said Saunders.

      The district is facing decreasing enrollment.

      For more than a decade the district has seen student population decrease by more than a thousand kids.

      This year student enrollment is expected to be at 3,178 students.

      "The loss of revenue that the district has has been drastic. Granted, we've been able to make cuts to continue to maintain and give raises and steps every year. We have cut to the bone,' said Rich Rossway, President of the Board of Education.

      They've decreased staffing and closed down four schools to offset lower revenues due to the shrinking student population.

      While they understand the teachers' frustrations, they too are facing higher expenses.

      "More contributions in your healthcare, increasing costs in electricity, heating and all those other things just to run a household.We're just a pretty large household and we face those same things," said Rossway.

      Superintendent Saunders says they have $4.6 million in their general fund, but that money is specifically on reserve to cover monthly payroll, operational costs, and in the case of an economic downfall.

      "So, if we don't have mid -three's to low four million dollars in cash on hand, we may have to turn around and have to become a borrowing district,' said Saunders.

      Now the district is receiving roughly $28 million in funding, but they'll be spending more than $29 million this upcoming school year.

      In Wednesday's part three we'll be looking at where the funding comes from and how its used.