School officials told the House K-12 Education Finance Division Jan. 28 they’d rather shift than cut.
That is, they’d rather live with the governor’s proposed accounting shifts to the education finance formula than make outright cuts to staff and programs. But they said such shifts are really a short-term solution to a perennial problem of an untenable education funding formula.
School districts now receive 90 percent of school aid revenue in the fiscal year in which it is appropriated and 10 percent the next fiscal year. The governor has proposed an 80-20 split for the 2010-2011 biennium that would reduce the General Fund operating deficit by “borrowing” $1.3 billion from school districts by withholding an extra 10 percent of 2010 aid until 2011.
Increasing the split means school districts must draw from budget reserves or borrow to meet financial obligations. Districts in statutory operating debt may apply for an exemption.
Rep. Mindy Greiling (DFL-Roseville), the division chairwoman, said the governor’s proposal is a tactic that undercuts education funding increases and imposes debt on districts.
“I hate shifts,” she said. “It will delay funding things like the New Minnesota Miracle. It will flat-line schools for quite a while, I think.”
Peggy Ingison, Minneapolis Public Schools chief financial officer and a former state finance commissioner, said shifts should be used as a “last resort.”
“If I had a choice of side A, raising revenue or cutting spending, and over here is choice B, where you are doing shifts, wouldn’t you recommend side A rather than side B?” asked Rep. Pat Garofalo (R-Farmington).
Ingison said the size of the projected state deficit means looking at “tax increases, spending cuts and shifts” to find a “balanced approach.”
Superintendent Joe Brown of the 376-student Grand Meadow district said he has already made difficult staff and program cuts, increased revenues and enrollment, has low transportation costs and high energy efficiency – and still had to cut $300,000 to balance this year’s budget.
Although he likes the governor’s budget and ideas about education, Brown said shifts aren’t the answer. “I think this is a disaster waiting to happen.”
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