District 833 May Have To Borrow As Result Of State Funding Shift

With more state funding for Minnesota schools being pushed back a year, District 833 might have to do some short-term borrowing.

As part of the , the Legislature opted to delay 40 percent of 2010-11 payments to schools to 2011-12. (The state delayed 30 percent of payments last year.)

Aaron Bushberger, South Washington County Schools finance director, said he was still looking into whether the otherwise financially sound district will have to borrow as a result of the funding shift.

“We’ve been fortunate not to have to short-term borrow in the past,” he said.

Bushberger said he would be in contact with the state Department of Education about cash-flow scenarios, but as the agency is still coming back online following the shutdown, there isn’t a lot of information available at this point.

He expects he will have details about the possibility of borrowing for the school board at its Aug. 11 meeting.

Aside from the interest costs related to borrowing, the district would also have to pay fees for financial consultants, Bushberger said.

Patch recently asked Scott Croonquist, executive director of the Association of Metropolitan School Districts, about the funding shift, which generates $700 million in one-time money for the state.

Patch: What’s your reaction to the plan?

Croonquist: This is not a structural balance to the budget—this is one-time revenue. … Our preference would have been that it was done more responsibly. We will be right back here in two years. We are not balancing the state budget. That’s the real danger and downside here—the future.

Patch: Is this continued shift is a slippery slope?

Croonquist: We are sliding down that slope very quickly. … It’s a tool that the Legislature has used over the years but we’ve never gone this far.

Patch: Will school districts with more money fare better than school districts with less money?

Croonquist: Districts with a healthy reserve won’t be hit as hard.

Patch: Do you feel that Gov. Mark Dayton let you down, schools down, as an ally?

Croonquist: We have a lot of frustration with the shutdown and its affect on schools. … And there does come a point when you have to settle the thing.