Proposed budget adjustment may tap school fund balance
Budget balancing will require $300,000 adjustment
A Forest Lake School District 831 budget adjustment of some $300,000 for the 2012-13 school year could result in use of dollars now in the general fund reserve account.
The school board is expected to adopt the budget changes when it meets again in regular session on Thursday, March 29. The board had its first full look at the administrative plan on Thursday, March 1.
As proposed last week, the budget adjustment does not result in straight cuts, but also relies on outside revenue and a reduction in expense in one major area.
The latter is a reduction of levy amounting to $118,000 that is local support to District 831’s membership in the East Metro Integration District.
The district is also considering a proposal from Lakes International Language Academy, a public Spanish-Chinese immersion charter school in Forest Lake, to lease four classrooms starting next fall. The plan, which is yet to be approved by the LILA School Board, would generate revenue of $25,000.
The balance of the budget reduction model calls for the elimination of 2.5 full-time equivalent teaching positions ($115,000) and one special education teacher ($25,000 general fund savings). Fund balance is also stated as a means of absorbing the teacher costs and not terminating employees.
An additional $10,000 savings could come by cutting curriculum writing.
Board member Kathy Bystrom said she favored using reserves as opposed to releasing more teachers, a step that could continue to harm class size in the district.
“Certainly these budget cuts could have been much worse,” Bystrom said, giving thanks to the public for last fall’s levy renewal that maintained just over $6 million a year in local property tax levy dollars. Without that levy, the cuts would have been massive this winter.
Board member Erin Turner joined Bystrom in supporting fund balance use to preserve the staff positions and maintain the full level of curriculum writing. “That’s where I come down, at least for now,” Turner said.
The district is carrying a $5.6 millon fund balance.
A Bigger Problem
The budget adjustments now under consideration are symptomatic of a greater problem in terms of funding, said Superintendent Linda Madsen in walking the board through the proposal last week.
State aid to support schools has dramatically fallen behind the cost of inflation, she said. Based on state data, Madsen reported that for Forest Lake, there is a $2136 gap in funding per pupil between current state aid funding levels and cost if adjusted for inflation.
And Forest Lake is also at the bottom in terms of per-pupil local levy revenue when compared to neighboring schools and Suburban East Conference schools.
Forest Lake’s current operating levy produced $725 per pupil unit. South Washington County is next in line with $929 while Centennial, a non-Suburban East school, is at $964 per pupil unit. Stillwater generates $993 per pupil unit.
From there the gap widens even more.
Hastings receives $1421 in per-pupil local levy revenue while Mounds View takes in $1523. At the top of the list and just $1 apart are Roseville ($1575 per-pupil) and White Bear Lake ($1576 per-pupil).
Funding charts also show taxpayers in Forest Lake get far less in form of excess levy dollars than taxpayers do in other metro districts based on market value.
For example, Madsen reported, the Forest Lake levy requires a cost of $125 per $100,000 of tax value to generate its $725 in per-pupil funding.
In White Bear Lake, generating $1510 in per-pupil levy dollars requires a $170 cost per $100,000 of tax value. Mounds View is able to raise $1523 in per-pupil funding on the backs of a $193 cost per $100,000 of tax value.
The gap is even wider in the western suburbs.
Minnetonka, for example, based on its larger tax base, is able to raise $1890 in local levy property tax revenue tied to a $200 cost per $100,000 of tax value. Wayzata taxpayers fork out $159 per $100,000 of tax value to generate $1531 in per-pupil revenue while neighboring Orono can raise an identical amount of per-pupil local levy dollars based on a $107 cost per $100,000 of tax value.
The new budget forecast released last week will bring some good news to Forest Lake, but no new state aid. The return of dollars from the new state budget surplus simply means some of the dollars shifted to future payments under the budget agreement last summer will return sooner than expected.
Larry Martini, director of business services, said that means District 831 will be able to reduce its future borrowing totals. Borrowing will be necessary for cash flow purposes because of the state aid shifts that delays aid payments as a means for the state to help balance its books.