Public schools hope for funding reform

By Lori Volz

Recently, legislative leaders got a closer look at just how bad the expected $4.57 billion budget shortfall is for the state’s coming two-year budget cycle (2010-2011), due to the national recession.

While this news is bad, the deficit was less than what was expected just over a month ago, when figures had the deficit between $6 billion and $7 billion. Because the state is receiving federal stimulus money, the anticipated $4.57 billion deficit is $278 million less than what was forecast in November. 

The American Recovery and Reinvestment Act, referred to as the federal stimulus package, was signed into law on Feb. 17. The U.S. Department of Education was set to distribute these stimulus funds to states beginning last week. School districts will be informed of what "strings" are attached to these dollars. While this federal stimulus funding certainly will help school districts at a time when the legislature will have difficulty providing additional funds, regulations tied to these federal stimulus funds might make if difficult for some districts to accept or qualify for the dollars.

E-12 public education is dependent on the state for its revenue authority. Recent experience demonstrates that legislated revenue has not been sufficient to meet instructional program needs and increased costs because of inflation. The state funding formula reflects stagnant funding over the past decade. As a result of this stagnant funding, Austin Public Schools has had to pass a number of excess levy referendums over the past 10 years in order to maintain a quality level of education for our students.


Fortunately, the district has a healthy fund balance to buffer the blow of these hard financial times that are quickly settling upon us. With the use of long-term financial planning and budgeting, the district has established a strong financial position. The district is always looking at ways to increase efficiency. An example of this is our Schools for Energy Efficiency energy conservation program. This is extremely important, as school districts are expecting little, if any, new funding from the state because of Minnesota’s projected deficit. The reality of the economic situation emphasizes the importance of renewing the excess levy referendum in fall 2009.

The district’s current referendum is $719 per pupil unit, which is below the current state average of $760 per pupil unit. The need for public school districts to pass operating referendums reflects the inadequacy of funding from the state of Minnesota. Local taxpayers support these operating referendums so that favorable class sizes can be maintained, as well as highly valued educational programs.

Hopefully, through good communication and collaborative efforts, some progress will be made in school finance reform this next legislative session.

Lori Volz is director of finance and operations for Austin Public Schools.

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