Viewpoint: Financial security — don’t take it from usSchool district finances and fund balances — not a very exciting topic — but one that could be very significant to the parents, citizens and taxpayers of South Washington County Schools during the upcoming legislative session.
By: Mark Porter, South Washington County Bulletin
School district finances and fund balances — not a very exciting topic — but one that could be very significant to the parents, citizens and taxpayers of South Washington County Schools during the upcoming legislative session. Why? The State of Minnesota has a serious budget shortfall to deal with and South Washington County Schools has a healthy, planned-for fund balance. Some would suggest that our local fund balance should be used to help solve the state’s financial problems. I couldn’t disagree more.
During a time of anticipated cash flow shortage, the State of Minnesota does have the authority to reduce and delay aid payments to school districts that maintain a fund balance. This in essence constitutes “interest free” borrowing by the state of the school district’s funds and the statute does require that delayed payments be made up in full by the end of the fiscal year. I anticipate that South Washington County Schools will experience delayed state aid payments. We have calculated the impact this will have and are prepared for this to happen. Over the short-term (a two- to three-month delay in payments) South Washington County Schools will not incur any significant negative impact from the delayed payment schedule, other than the loss of our interest earnings on the money being held back by the State of Minnesota during this time. However, I am still very concerned about where things might go in the future.
The proposed reduction and delay in aid payments to school districts comes on the heels of legislation approved last year that already delays 27 percent of school aid payments into the next fiscal year, commonly referred to as a payment “shift.” The reduced/delayed aid payments now being considered are in essence another short-term shift in state aid payments to school districts. At what point will the State of Minnesota find itself unable to pay back the total amount owed to school districts across the state? If unable to pay, do such intended shifts in reality become significant cuts for those school districts affected, including South Washington County Schools? In addition, does exercising the right to delay payments to those schools with fund balances move the legislature one step closer to using these local funds to balance the state budget? Keep in mind that the funds in our general fund balance are a mixture of state aid funds received, as well as local levy dollars approved and provided by you, the local taxpayer. These latter issues are the reasons for my elevated concern about this topic and how it might impact South Washington County Schools.
Our current fund balance has been intentionally and carefully established to allow us to open a new comprehensive high school and expand opportunities for students throughout the school district. We are not “sitting on” this money as some might have you believe. These are the resources that will allow us to weather the economic storm ahead without incurring significant reductions in programs and staff. Yes, we can all see some very tough times ahead, but our school district is well positioned and prepared to deal with these tough times while maintaining the high quality of education our communities have come to expect. This is a credit to your school board and superintendents who preceded my time of leadership.
I believe our local legislators clearly recognize that any use of our local fund balance, other than the existing authority to delay aid payments for a short period of time, is unfair to the school district, parents and taxpayers. Yet, they will be under tremendous pressure this session to seek solutions to the current and projected state budget shortfalls and will be faced with many difficult and challenging decisions. I understand the need for everyone, school districts included, to be part of the budget solution, but any solution that involves school districts has to be a balanced and fair solution that impacts all school districts in an even-handed manner. Any permanent reduction in our local fund balance to the benefit of the state budget is simply not right.
We will all be watching with great interest the upcoming legislative session as our elected officials wrestle with problems of unprecedented proportions. I will work collaboratively with our legislative delegation, as we have in the past, to seek solutions that are fair and reasonable for the students and citizens of South Washington County Schools. I encourage you to watch closely and to be an advocate for our school district and our students. Our fund balance is needed to provide the current and future resources necessary to maintain high expectations for all students in South Washington County Schools. We cannot let this be taken from us.
Mark Porter is superintendent of School District 833.