District 833 funding outlook unlikely to change
Soon after School District 833 certified the tax levy for the 2012-13 budget, it was time to start looking at what the financial picture looks like for 2013-14.
On the surface, it appears the district is facing the same funding problems as it did this year, according to a report by district Finance Director Aaron Bushberger given at a board workshop meeting last month.
If there were no changes, the 2013-14 budget would be about $158 million, $5.3 million more than projected revenue. If there were no cuts, and the board used the district's fund balance to cover the increase, it would leave a fund balance equal to 3.9 percent of the budget. It also would be the sixth year of deficit spending.
For this budget year, which ends in June 2013, the School Board pared the budget by $3 million, using a combination of adjustments and spending cuts, which leaves a fund balance of 9.6 percent.
The Legislature already owes school districts $2.4 billion in delayed payments, Bushberger said, putting any new school funding on shaky ground from the start.
District 833 had reserves totaling more than $20 million six years ago. Cuts and deficit spending have eaten away the fund balance.
Out of 337 districts, only 61 have fund balances less than District 833, according to Bushberger.
Districts, coping with dwindling or flat revenue from the state that supplies more than 80 percent of their funding, have been piling up as much reserve funds as they can, he said.
District 833 has a fully vested retirement fund, said School Board Chairwoman Leslee Boyd, so some districts might be keeping money in fund balances and not paying into retirement accounts.
"Could be," Bushberger said.
Of 48 Twin Cities area districts, about half got short-term loans to make up for delayed state payments, Bushberger said, something District 833 didn't have to do because it used its retirement fund to cover cash flow and made up the difference when state-aid payments were received.
The district ranks 37 of 48 metropolitan districts in per-pupil revenue. It ranks 46 of 48 in money spent for administration and 15th in the amount of money spent in classrooms, according to Bushberger.
"We're putting our money in the classroom," said board member Ron Kath, "that's the long and short of it."
Board members also discussed a referendum that will be up for a vote a year from now.
An existing voter-approved $3.4 million referendum that yields $64.38 per pupil will be up for renewal in 2013. No additional money or taxes are generated by re-approving the referendum.
Another voter-approved referendum for $1.2 million is due to be voted on again in the fall of 2014, but the School Board could decide to put both on the same ballot next fall. Another option is to ask for more money to operate schools, a subject that so far hasn't been discussed publicly by the board.
The district spends $929.44 per pupil from local voter-approved tax levies, well below the state levy cap and $100-$200 below the metropolitan average, according to material supplied by Bushberger.