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Schools’ operating capital use

Published (2/18/2011)
By Kris Berggren
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Three bills laid over Feb. 15 for possible inclusion in an omnibus bill by the House Education Finance Committee would modify how school districts may use part of their operating capital revenue.

Operating capital revenue is a component of general education revenue that must be reserved for 24 specific facility or equipment needs listed in statute.

HF346, sponsored by Rep. Carol McFarlane (R-White Bear Lake), would extend temporary authorization, due to expire June 30, 2011, that allows any district to transfer up to $51 per pupil unit, or

1 percent of the basic formula allowance per pupil, from its operating capital reserve to its general fund balance. The bill would make that authority permanent and would require that the district’s operating capital needs are being met.

Kim Riesgraf, Osseo Area Schools assistant superintendent, said the bill would help boards to be more strategic in their use of resources, allowing them to deploy a portion of the restricted funds instead of making program cuts.

Rep. Kathy Brynaert (DFL-Mankato) wondered why 1 percent was chosen and why it’s proposed to make the authority permanent, if the intention is to get through difficult financial times.

Riesgraf said the 1 percent is approximately the amount of average cost increases for expenses that are out of the board’s control, such as insurance benefits, transportation and utilities. She said the limit would ensure districts have operating capital reserves.

A companion bill, SF239, is sponsored by Sen. Benjamin Kruse (R-Brooklyn Park).

HF 71, sponsored by Rep. Steve Simon (DFL-St. Louis Park) would add a 25th category, to help pay for costs associated with closing a school, such as packing, shipping and moving. Its companion, SF166, is sponsored by Sen. Ron Latz (DFL-St. Louis Park).

Rep. Dan Fabian (R-Roseau) sponsors HF301, which would allow the revenue to be used for leasing vehicles such as school buses, not only to purchase them. Sen. LeRoy Stumpf (DFL-Plummer) sponsors its companion, SF171.

All three companion bills await action by the Senate Education Committee.

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