BENTON HARBOR — Benton Harbor's superintendent says teachers may have to be laid off if the budget situation doesn't improve. The district has a $3 million shortfall. They have to close that deficit or risk losing state aid.

The district has lost hundreds of students over the past few years. The Superintendent says that translates into $7 million in lost revenue.

The district has already made a number of cuts. But if the financial situation doesn't improve, teachers could be next.

The Benton Harbor School District receives thousands of dollars for each student.

“You lose the enrollment, you lose the money,” said Carole Schmidt, superintendent of Benton Harbor Schools. “But your costs don't go down, because everything else goes up.”

So school officials have already taken a number of steps to close the gap.

Martindale Elementary School closed, custodial and clerical staffers were laid off and there's no more health and wellness classes in the elementary schools.

The district is also behind on paying insurance premiums for its teachers.

“It was a choice between of either making the payroll, which is about $2 million every month and or the insurance premium payment, which is about $497,000 per month,” Schmidt said.

The district has already turned in a deficit management plan to state officials for this year. Now they have to assure the state they are working on the projected deficits for future years. More staff cuts may be on the way and they will likely include teachers.

“If this continues, everything will become vulnerable,” Schmidt said.

One area the superintendent does not want to completely eliminate is extracurricular activities such as athletics, the band, and fine arts. Schmidt says if those are eliminated, even more parents will leave the district, adding to the problem.

“Whether we like to believe it or not, many kids come to school, because they can be in the band, because they can be in the orchestra, because they can be in the choir, they can play athletics, and so we start taking those away, we lose more students," Schmidt said.

The district is also negotiating with the teachers union and other unions for new contracts, but the deficit situation is making things difficult.

Schmidt says Michigan's poor economy also means less state aid is coming to schools. Until that improves, she says, the situation could get even worse.

The district should have a better idea of what cuts it will need to make after they do their February enrollment count in a week and a half. The school board will discuss the issue next week.