More state budget problems could hit schools hard
WILLMAR -- Budget cuts have become a yearly exercise for Minnesota school districts, as they deal with falling enrollment and limits on their funding.
But a state budget deficit which has increased more than $1 billion in five months could lead to severe reductions in school budgets statewide. The deficit projections were revealed on Wednesday.
Schools al-ready face a delay in receiving their funding because of Gov. Tim Pawlenty's unallotment last summer. Unallotment is the governor's power to reduce spending to prevent a deficit.
Pawlenty did not cut school spending, but he did delay 27 percent of this year's state aid payments until the next fiscal year. That delay has caused many schools around the state to borrow money to maintain their cash flow between aid payments.
Area superintendents are waiting to see how further state actions may affect them in the near future.
"They should absolutely be concerned," said Rep. Al Juhnke, DFL-Willmar. In a telephone interview Friday, Juhnke said the budget has deteriorated significantly since the Legislature adjourned in May.
The $1.2 billion deficit that has built up since the fiscal year began on July 1 will contribute to a projected $5.5 billion deficit for the next two-year budget cycle, Juhnke said.
When inflation and other factors are included, it's possible the state could be trying to cut $8 billion, about one-quarter of the two-year budget.
"I think it's extremely sobering and serious," Juhnke said.
"We need to change the way we do business," he added. "In 14 years (as a legislator), I've never seen anything like this."
The blame for the lack of cooperative spirit among state leaders can be placed on Gov. Tim Pawlenty and legislative leadership from both parties, Juhnke said.
"I think it's time for them to get back to work," he said. "The leadership just isn't around ... at least that's my view from the sideline."
Juhnke said a budget fix won't come easily. "It has to be done in a balanced way," and include revenue increases, spending cuts and significant government reform, he said.
Sen. Joe Gimse, R-Willmar, said he hopes schools aren't affected by the deficit in the current year, but he is concerned about talk of stretching out the delay in paying the schools their 27 percent in aid.
Gimse, who joined the Legislature in 2007, said he is new to the idea of unallotment being used as a large-scale effort to balance the budget, and he's hopeful the Legislature can find other solutions in its 2010 session, beginning in February.
"I don't see a silver bullet, a magic bullet," he said. "There's a lot of ideas out there. ... There are some reform initiatives we're going to have to take serious looks at."
Republicans held a series of meetings with small business owners this fall. They are putting together a report on the meetings that should be released in January, Gimse said.
"I believe we need to continue to look, as our families and small businesses are doing, for ways to spend our money more wisely," he said.
The Willmar School District has already estimated that $1.4 million could be cut from its budget at the end of this school year. However, that number could move closer to $2 million, depending on what the state does, said Superintendent Jerry Kjergaard.
School leaders around the state have been concerned since Pawlenty's unallotment that the delayed state aid may never be sent to them. Those fears were heightened by Wednesday's announcement.
If the money owed to school districts is lost, "it is really going to be ugly," Kjergaard said.
When the district cut $2.8 million from the budget last spring, Kjergaard released a list of items that he did not recommend cutting.
However, if state cuts pile up, "I think all the bad things I said wouldn't happen could happen," he said. The list included cuts to athletics, activities and music programs. "Some of that stuff is going to be real unpopular," he added.
Litchfield Superintendent Bill Wold said the district, already in debt, has borrowed money to maintain its cash flow.
Districts that have a general fund reserve may be able to weather state budget problems a bit better, but Litchfield is already operating at a deficit, Wold said.
If the delayed state aid is not paid, "we'll have to make larger reductions or continue to borrow," he said. "It's disheartening, absolutely."