833 set to approve budget later this month
District 833 School Board members are keeping their fingers crossed that Gov. Pawlenty won't include education funding in the list of expected cuts to the state budget.
If it escapes the red pen, and funding stays flat, the board is expected to approve a $142.8 million budget on June 25.
The budget is up slightly from last year, but an offset of slightly less than $1 million in one-time federal stimulus money reduces it by .6 percent.
Salaries and benefits are expected to be down slightly, but six contracts with unions, including the teachers union, have not been settled.
To balance the budget, the district will dip into an unallocated fund for $1.7 million.
Cuts in education funding are not likely, said Superintendent Tom Nelson at the June 4 workshop meeting. For that, he said, the district should feel fortunate given the state's budget problems.
Enrollment is expected to be 16,659 students, down slightly from this year, according to district Finance Director Aaron Bushberger who presented the budget.
The governor could include some accounting shifts to balance the budget, Nelson said. Currently, 90 percent of the money comes to the district in the budget year and 10 percent in the following year. That could shift to 80/20 or something in between and not force the district to immediately do short-term borrowing.
On the revenue side, the local tax levy won't reflect a slightly reduced budget expense. Because of shifts from state to local government, the tax levy goes up 3.1 percent.
Income from district investments is down 40 percent, Bushberger said, because interest rates dipped from 4 to 1 percent in the past two years.
To reduce the impact on next year's budget, the board has raised class sizes next year by an average of one-half student and put off a one-time $2.5 million payment to fund that pays for retirement and health insurance benefits. Postponing the payment will not affect retirees that benefit from the fund.
The funding forecast for the district is grim if no further money comes from the state beyond next year. In three years, if nothing changes, district reserve funds will be exhausted, according to Bushberger's projections.