As Minnesota grinds on toward shutdown, schools are graduating students and closing their doors for summer. Unfortunately, summer vacation won’t make them safe from the consequences of state budget gridlock and shutdown.
Minnesota schools have to adopt budgets by July 1, even though they don’t know what state aid they will get—or when. So they’ll pass budgets, as Willmar did this week, “based on quite a few assumptions,” knowing that the budgets they painstakingly devise will have to be revised later, when state decisions are made.
This year, state aid will be late again. If the state shuts down, that may further delay payments to schools. MPR reports that districts may have to borrow even more:
“The fact that we’re not hearing anything, and no movement’s been made — it’s making me very nervous,” said Colleen Mertesdorf, finance director for the Faribault school district in southern Minnesota. …
Mertesdorf is also president of the Minnesota Association of School Business Officials, which represents all school budget officers in the state. She says the concern centers around cash flow — if state money dries up, will she be able to meet payroll and keep paying bills?
Many schools have already had to borrow money because of the Pawlenty plan, which delayed state payments due in the last biennium. According to the Winona Daily News, nearly 40 percent of Minnesota school districts borrowed money last year, and more will have to borrow this year, because of shortfalls and delays in tax payments to schools.
While schools can repay the loans when state aid comes in, that doesn’t really solve the problem. The interest paid on the loans costs real dollars that otherwise could pay for books and teacher salaries and field trips.
Rosemount-Apple Valley-Eagan, the state’s fourth-largest district, is not a poor district. It has maintained a healthy rainy day fund. Nonetheless, it will have to borrow this summer, for the first time in 20 years. Patch reports that interest and fees will cost the district $57,625.
“This is a teacher,” board member Joel Albright said. “And we’re going to do it again and again and again until [state government officials] get their house in order.”
The Republican legislators don’t want to tax the richest two percent of Minnesotans. They’d rather “balance” the budget by making schools borrow money and pay for interest and fees, instead of for students and teachers.