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Helmut Schmidt, Published May 14 2013

New state funding formula, sequestration leave Fargo School District budget unclear

FARGO – The budget picture is unclear for the Fargo School District as district staff wrestle with trying to determine how a new state K-12 funding formula and federal sequestration cuts fit in with facilities planning, teacher contract talks, building maintenance and other needs in the budget for the 2013-14 school year.

Business Manager Broc Lietz gave school board members a good news/bad news briefing Tuesday on how the latest North Dakota K-12 funding bill may affect the district’s budgeting.

Lietz said lawmakers ended the session by agreeing to raise per pupil payments from this year’s $3,980 per student to $8,810 for the coming school year, and $9,092 in the 2014-15 school year.

That would mean that this year’s $47 million in state aid to the school district would jump to about $90 million in the 2013-14 school year, Lietz said.

“It certainly is a significant increase in state aid,” Lietz said. “I am relatively pleased by where we ended up” on per pupil funding.

In return, lawmakers demanded that the state’s school districts reduce their mill levies 50 miles to provide property tax relief.

While the trade-off may be straightforward for many districts, Fargo is an excess mill levy district and the formula requires some more steps in which the math isn’t totally settled, Lietz said.

Even school finance experts disagree, Lietz said, saying he got two different answers for where the district’s mill levy needs to be to meet state law.

Currently, the Fargo School District levies 219.28 mills. Of that, 191.18 are general fund mills, another 26.35 are used by the building fund, and 1.75 mills pay for special assessments.

Lietz said he’s been told the general fund mills may need to dip to either 176 mills, or 141 mills.

“It’s not crystal clear,” Lietz said.

“We’re still sorting it out,” he said. “Stay tuned.”

Superintendent Jeff Schatz added another worry for the 2013-14 budget process. He said he was told recently by state officials that due to federal budget sequestration, Fargo Public Schools may see up to $870 million in cuts to programs that bolster learning for low-income and special education students, English Language Learners, and others.

“Sequestration is real,” Schatz said.

Schatz and Lietz said the school board will have to determine how much, if any, of those dollars will be replaced by school district funds.

The Fargo School District typically tries to approve its preliminary budget in July, with final approval by Oct. 10, Lietz said.

Readers can reach Forum reporter Helmut Schmidt at (701) 241-5583