ISD166 will again need to borrow as state sets aside aid

As a part of the agreement reached by Gov. Dayton and legislative leaders, the bills recently signed into law once again will use school districts to help balance the budget. Some $700 million in state aids to education will be held back. ISD166 Superintendent Beth Schwarz:

“Of course we’re pleased that the state shutdown has come to an end, but really disappointed that again the state’s budget is again being balanced on the backs of our children. That’s very, very frustrating. For us it would be like your boss coming to you and saying ‘We’re having a cash flow problem right now on the books, we’re going to give you 60% of your check and we’re going to write you an IOU for 40% of the rest and we’ll pay you that in about a year.”

Schwarz said holding back part of the payments means money will be coming in long after it was needed.

“We will get 60% of our funding throughout the course of the 2011-12 school year, but we will get 40% of our state aid after the school year is over. So we will be getting aid payments in August, September and October that are monies that were meant to pay our teachers, keep the lights on, keep books on from September to May, 2011-12.”

She likened the borrowing, line of credit and payback scenario to a credit card shell game.

“It means for us borrowing, it also means where’s our cash flow at, what sort of things can we do?
It looks like we’re definitely going to use our line of credit throughout the year next year, and ity looks like any given month, we’ll be looking to have to run that line of credit to its maximum, which is about $220,000, and then we’ll get a state aid payment in and we’ll pay it on that credit and then we’ll probably have to run it up again the next month. So we’ll be doing a lot of that shell game a lot of people in their personal lives are doing right now, given the economy.”

It is true that the legislators increased per pupil aids by 50 dollars, but Schwarz said, while appreciated, it isn’t much of a help.

“The shift, the 40% we’re looking at is $1.4 million for our district. The $50 per student will give us about $25,000. So it really is a drop in the bucket. Every little bit helps and I don’t mean to snub the legislators, at least they got us something, but on the other hand, $25,000 in help when we’re being asked to come up with $1.4 million is pretty tough.”