Published January 27 2010
Area schools worry more cuts to come
But they worry the move by the cash-strapped state might be a harbinger of more delays and outright cuts in aid to come. And because only districts with fairly comfortable fund balances will see payment delays, officials said the state is technically penalizing prudent spenders.
The state told schools Tuesday it would hold off on payments for March, April and May to help with its cash flow issues.
“We are a conservative school district that has built a fund balance,” said Warren Schmidt, interim superintendent in Breckenridge, which faces a delay of 40-plus percent of its spring aid. “Now we’re basically going to be punished for that. What’s the lesson here?”
The state determined from which districts it would borrow based on how much money they had in reserve. Area districts with smaller stashes, such as Dilworth-Glyndon-Felton and Lake Park-Audubon, were off the hook. So were districts dealing with a deficit, such as Fergus Falls.
D-G-F has about $570,000 in reserve, less than 5 percent of annual expenditures. Superintendent Randy Bruer was relieved his district will get its payments on schedule, though the low fund balance is a concern.
“We’ll have to look at some cost reduction measures in the spring to keep it where it is,” he said.
Moorhead faces a delay of $1.58 million over three months, or 100 percent of its aid. But the district’s fund balance will give it enough cushion so it won’t have to borrow money, Assistant Superintendent Wayne Kazmierczak said.
“We’re glad we can help out,” Kazmierczak said. “However, it just seems like another gimmick and not the way for the state to solve its budget issues.”
Some school officials said the move might cause them to rethink their spring budget cut plans.
“It’s very difficult to project what 2010-2011 might bring,” Ulen-Hitterdal Superintendent Allen Zenor said. “We will look deeper for some cuts than we might otherwise have.”
The state promised districts will get their money on May 30. But, asked Schmidt, “What have they done to convince me they’ll give it back?”
Paul Marquart, a state legislator and a teacher in Dilworth, said he expects the state will pay districts back. But he questioned if it can close its projected $1.2 billion gap without trimming school aid.
“At the very best there will be a freeze for the next three years and possibly some funding cuts,” he said. “It’s going to be tough sledding for districts.”
Readers can reach Forum reporter Mila Koumpilova at (701) 241-5529