$23M in shifted state aid coming to South Washington County Schools sooner than expected

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A series of payment shifts to public schools by the Minnesota Legislature that began in 2009 helped to shore up a state budget deficit but caused delayed payments to school districts.

Because of a recently announced state surplus, the payment formula is returning to near normal due to a state law that puts schools first in line to get paid when there is a surplus.

South Washington County Schools didn’t have to resort to short-term borrowing during the payment shifts but lost interest on some money that would have been invested, according to Aaron Bushberger, district finance director.

The normal payment schedule, before 2009-10, gave school districts 90 percent of their money in the current fiscal year and 10 percent in the following year. Schools rely on the state for more than 80 percent of their revenue.

In 2009-10, the Legislature shifted the payment schedule to a 60/40 split beginning in 2011-12.

A recent budget forecast from state revenue officials shows an estimated state budget surplus at $1.3 billion. This allows the shift to move to 82.5 percent and 17.5 percent.

As a result, District 833 will receive $23 million sooner than expected.

Bushberger cautioned that the revenue doesn’t increase the district’s income. It’s money owed to the district, he said.

As a result of an additional shift, the state still owes District 833 $20 million because of a property tax shift to balance the state budget. This has put a strain on the district’s cash flow and ability to generate interest, according to Bushberger.

Tags: washington county, updates, education