District finances have been on downward spiral

This article submitted by Michael Jacobson on 2/07/01.

The Paynesville Area School District needs to cut $500,000 from their 2001-02 budget, according to superintendent Howard Caldwell. In fact, he thinks we might need to cut even more than that.

At the start of the public hearing on Thursday night, Caldwell reviewed the recent district finances and enrollments.

The 2000-01 budget will be the fourth consecutive year of deficit spending by the school district. In that time, the district's general fund has gone from $1,663,000 dollars in 1997 to a projected deficit of $389,000 this summer.

The $500,000 in cuts comes from the budget deficit approved by the school board for this school year, but Caldwell believes that deficit has grown due to increasing costs, like fuel, and due to enrollment this fall that was 75 students lower than a year ago.

"The amount of revenue schools receive is based on the amount of students we have," Caldwell told the crowd of more than 200 people in the high school cafeteria Thursday. "As the number of students declines, revenue declines."

Caldwell thinks more might need to be cut because the district not only needs to balance its budget for next year but it may need to get its general fund balance out of the red. "My fear," Caldwell said on Friday, "is that (the cuts) won't go far enough."

Incremental approach
Former school board member Lowell Haagenson was one speaker on Thursday who urged the board not to cut a full half million dollars from the district's budget.

While complimenting the board and administration for being good custodians of school funds, he noted a trend for overestimating expenses and underestimating revenue, which could lead this year's deficit to be less than projected. "I'm convinced we're not as bad off as we think," he said.

Middle school teacher Randy Ziemer agreed that the projected deficit was too large. "This district has a history of overprojecting expenditures and underprojecting revenues," he explained. "My guess is that the deficit will be a lot less than that $900,000." Haagenson, who was on the board when the district had a $1.5 million balance, approved of the spending on educational programs. Education, not a hefty fund balance, is the purpose of schools. "I think we moved in the right direction," he explained. "I think the money was well spent."

Now, while admitting some cuts are needed, Haagenson doesn't want to cut too much too fast.

Better state funding
Ziemer advocated a need to lobby the Legislature for better funding for education. He said the lean budget for education, at a time that the state has a billion-dollar surplus, was a travesty.

He urged residents to write letters to their legislators and the governor. He suggested that the school could hire a bus to take a group down to the Capitol to lobby.

Better state funding was a message from the school administration at the hearing, too. Board chairman Pat Flanders, during his introductory remarks, said the governor doesn't care too much for education. "(Gov. Ventura) doesn't believe in providing funds for education and he's up front about it," said Flanders.

"The state hasn't been giving us a lot of dollars to operate," Caldwell said Thursday. "Some years we got no increase at all in basic foundation aid."

"It's very frustrating to try to do what we're asked to do with the money we're given to work with," he added.

He might have joined a rally by superintendents at the Capitol on Thursday, but had to prepare for the public hearing instead. For lobbying to be successful, he felt parents and school kids would need to show in mass at the Capitol.

One of the reasons that he is cautious about the budget is that he never knows what the Legislature will do and how that will affect our school's revenue. "I'm not assuming anything," he said. "Over the years, I've learned never to trust the government agencies."

Higher taxes
"Nobody likes to talk about tax increases," Bob Gardner said during the public hearing, "but I spend my tax money on lots of other things. Money on education is money well spent."

Gardner thought that all the programs on the potential cut list had merit. He doesn't want to see anything cut and doesn't want students to have reduced opportunities.

What Gardner seemed to be suggesting was an increase in the local tax levy for education. The school district currently levies $315 per pupil unit, which raises over $400,000 annually. By raising the levy to $415 per pupil, the school district could generate another $125,000 per year.

Excess levies can go as high as $991 per pupil unit, according to Bob Porter, an education finance specialist with the Department of Children, Families, and Learning.

Up to $415, the state will pay for around 60 percent of the levy, depending on the local tax base. Porter said that means for every dollar contributed by the local community the school would receive about $2.50. Beyond $415, every dollar would come from local taxes.

However, an addition to the excess levy can not be done in time for the 2001-02 school year. The earliest that levy could be enlarged would be for the 2002-03 school year.

(A couple speakers at the public hearing asked why the district didn't address the growing deficit earlier, and not just talk about it.)

Paul Bugbee, who operates a resort on Lake Koronis, said at the public hearing that his property tax checks are hard to write, but remembering the student accomplishments in the arts and athletics makes it easier to write.

General fund
One clarification made at the meeting related to the school's accounting procedures. By law, the school must use different funds, which pay for certain expenses.

The deficit only concerns the general fund. The school's other funds, like capitol improvement and food service, have a balance.

Flanders also noted that the general fund deficit is not related to the construction of the auditorium and fitness center. That project has a separate fund, which though tight, still has money in it.

The only affect the project has on the general fund is heating, lights, and cleaning, Flanders said.

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