Minnesota school districts will face serious budget woes under the $1.8 billion in education cuts proposed by the Governor, said State Senator LeRoy Stumpf (DFL-Plummer), who chairs the Senate E-12 Education Finance and Policy Committee.
“Through the unallotments to balance the state budget, the Governor authorized a $1.8 billion cut to education, which is a ‘shift,’” Sen. Stumpf said. “That ‘shift’ is really a cut to education funding because he doesn’t have the authority to re-pay the school districts in the future. This is absolutely the last thing our schools need right now. They received no funding increase this year, and now they face what amounts to a 27 percent cut in school payments.”
The cuts are aimed at state aid payment delays to school districts. The state currently delivers 90 percent of funding up front and delays 10 percent of payments to the next biennium. This proposal would be the highest delay-rate in history, paying districts only 73 percent of their funding now, and delaying the remaining 27 percent. This could cause serious cash flow problems for schools, forcing them to borrow or seriously deplete reserves.
“We are being told that it could cost districts $33 per student in interest costs if they are forced to borrow,” Sen. Stumpf said. “If they are forced to deplete their reserves, it could cost them $27 per student in lost interest.
Education cuts would also contribute to an enormous expected budget deficit of $7.3 billion in the 2011-2012 budget cycle, he added.
“Our state was devastated by the huge $6.4 billion deficit we faced this year, but we were able to soften that blow with federal stimulus dollars,” Sen. Stumpf said. “We won’t have that money in 2011, and we will face an even larger deficit — that totals almost 24 percent of the state’s entire budget of $31 billion. Unfortunately, this does nothing to help our school children and simply pushes our state’s budget crisis off to the future.”
Plummer, Minn. —
