School Finance Update

Governor Tim Pawlenty discussed the state's budget situation on his radio program on WCCO this morning. He reiterated that he wants to protect safety (the military) and public safety (police) and K-12 education. It is encouraging to know that K-12 isn't on the chopping block, at least at this time. I am not sure what this means for community education.

He went on to discuss the county commission that voted themselves a raise then took action to cut the budget. The governor is promoting salary freezes for all government employees in light of the economic conditions facing the state and nation.

He has been talking about "zero based budgeting." He is now advocating "priority based budgeting," which identifies the most important government services and funding just them.

This week the school board's finance committee met to continue discussion on how the school district will deal with a $921,912 deficit in next year's budget. Without action for next year the projected deficit for the next year grows to $1,504,199 and to $2,245,831 in 2011-12. This assumes no increase from the state. 83% of the General Fund revenues come from the state.

The district is fortunate to have some fund balance to soften the blow of future reductions. At this point the finance committee is discussing using about $1.7M of the fund balance to cover deficits for the next several years. Under this scenario there would need to be about $1.7M in cuts, while using the available fund balance, leaving enough fund balance to cover one month expenses.

The finance committee will be bringing the whole board up to speed in a study session on January 13 and finalizing the numbers that we will be working with.