Viewpoint: The effect of the U.S., world economy on District 833
As some of you may be aware, I have announced my retirement at the end of the current school year. Last week, my wife walked me out to the car in the morning and asked if retirement at this time was still a good decision. Like everyone else, she is worried about the future.
The same is true for the school district. I worry about the district's finances even in good times.
Right now, the world's economy has focused us on our finances, whether it is our personal or our business financial situation. In this case it is the business of the school district. Let me explain.
The school district has an annual total budget of almost $200 million. The money to meet our annual expenses comes primarily from state aid (64 percent) and local property taxes (22 percent). The other 14 percent comes from miscellaneous sources.
State aid is paid with "state" money that comes directly from our income and sales taxes.
When state receipts are down, school districts receive less state funding. When state receipts are up, school districts do well.
Right now, the outlook for the next two years is not very good. Minnesota and Minnesotans are feeling the pinch.
It appears that as the governor and the Legislature begin to plan for the next two years, they may be starting at a lower point than the state has made available the past two years.
This is almost unprecedented. This most certainly means we need to start planning for a couple of lean years ahead.
The school district will begin our budget planning for the 2009-10 school year right after the first of the year. It most certainly will be a very tight, tough budget cycle.
Like many individuals, our school district has money invested that we are not presently using.
This money is earning less interest income than we had earlier projected. This also creates a hole in our budget.
We also have paid very close attention to where our money is invested.
State laws require school districts to invest in federally backed guaranteed investments. These investments are secure and we can thank our lawmakers for these regulations.
This leaves property taxes as another main source of funding. We have recently passed two referendums, one for the construction of facilities and the other was a renewal of a former operating levy.
Because homeowners are feeling the pinch, we realize it is not a good time to be thinking of asking for additional property taxes.
Finally, our enrollment is down for the first time since 1984. It is only a temporary trend, but it does have a negative impact on our bottom line.
Fewer students, less funding -- it is that simple. The downturn in enrollment is a bi-product of the current housing market.
I tend to be an optimist. I am hoping we see a quick turnaround in the economy, but all the analysts are saying it may take a couple of years.
If this is the case, we will need to work together to make good decisions to ensure our education programs do not suffer over the next few years.
We have made great progress in the South Washington County Schools over the past four years.
We all know some tough decisions lie ahead, but let us not lose our desire to focus on a positive future knowing education is the key to our future.
Nelson is School District 833 superintendent and can be reached at email@example.com.