District looks to budget reserves to erase deficit

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District 833 may tap most of its reserve funds, rather than cut programs, to balance next year's budget.

The district will face an $11.7 million deficit if the School Board makes no cuts to projected spending in the 2011-12 academic year and the Minnesota Legislatures leaves aid to South Washington County Schools goes unchanged.

This year, the School Board used about $4 million of its reserve funds to cover a deficit and could cover another deficit with remaining reserves, but the unallocated rainy-day fund would go from $17 million to $5.5 million, under the budget scenario that assumes no program cuts and no loss in state aid. The district's overall budget is estimated at $156 million.

Taking a conservative look at what the Legislature might do as it faces a $6.2 billion state budget deficit, district Finance Director Aaron Bushberger told the School Board at a Jan. 6 workshop that a 3 percent cut in state aid would result in a $3 million hit to District 833. In that scenario, the district’s reserves would drop to $2.6 million, leaving a difficult budget situation.

The board is discussing the general fund, which pays for education and teachers, because the staffing process for next year has begun and a decision on class sizes must be made at the Jan. 20 meeting, according to Superintendent Mark Porter, who is not recommending a change from this year.

There are other budget alternatives. If class sizes were increased by an average of one-half student, the savings would be $675,840, according to Bushberger.

Board members Ron Kath and Jim Gelbmann said they would vote for no change in class sizes.

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