School Board Approves Budget, Fears Shutdown

By a unanimous vote Thursday, the South Washington County School Board approved its general fund budget for the next school year, but a looming government shutdown could affect schools across the district if Gov. Mark Dayton and the Republican-led Legislature don’t come to an agreement about the state’s budget by July 1.

South Washington County Schools Finance Director Aaron Bushberger said the district will be operating at about a $6.5 million deficit for fiscal year 2011-12, and if a government shutdown does indeed happen and last for an extended period of time, the school board might have to do some creative budgeting if no revenue is being allocated to the district by the state.

“The big thing for us is state revenue,” Bushberger said in a Patch interview following the meeting.

During the meeting, he told board members that state money makes up about 79 percent of the district’s budget, with 15 percent coming from the property tax levy and the rest being filled by other means.

For the upcoming school year, one of the district’s budget assumptions is that there will be no change in revenue from the state. But if less money is allocated than was anticipated at the end of the school board’s budget process, that could mean cuts for the district, Bushberger said, due to the deficit the anticipated $6.5 million operating deficit.

If that were the case, the deficit could possibly be covered by $10.7 million the district has set aside in fund akin to a savings account, which is money left over from previous budgets. However, Bushberger said the school board has a goal of keeping that fund balance at 5-9 percent of the total general fund budget, and if that money were to be used to cover the deficit, the fund balance would drop below that desired percentage.

“We continue to deficit spend, and part of that has been planned,” he said. "We’ve got sufficient fund balance to cover that deficit at this time.”

Summer School Likely Not Affected

During the meeting, board member David Kemper asked Bushberger if summer school programs would be affected if the state government does shut down come July 1.

“From a cash-flow perspective, we do anticipate that we’ll be OK through the end of July,” Bushberger said. “However, the state does pay us twice a month—on the 15th and at the end of the month—and when we’ve reached that Aug. 15 date, that’s when there’s going to be a crunch for us. Right now we’re doing some digging—we’re doing some research (about how to deal with such a situation)."

Bushberger added that even if a shutdown does last until mid-August, summer school programs would not be halted, because the district does have some options to fund the programs in the short term, such as taking money from district investments, which could be done with a monetary penalty.

Hoping for a Compromise

Toward the end of the discussion on the budget, Superintendent Mark Porter addressed the possibility of a government shutdown.

“We do not anticipate any immediate shutdown of any of our services, but we are looking into our cash-flow model, and looking at some short-term lines of credit if this extends into August,” he said. “As this much-discussed possibility becomes nearer to reality, it will have an impact. It will have an impact on us. We have some resources available to us that others don’t, but still, we will need to make some provisions for what it might mean if it extends for any lengthy period of time. I guess I would join anyone else in hoping for and encouraging a solution and resolution to be found in this budget process.”