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State budget has good news, bad news for Rosemount school district

The budget deal reached by legislators July 19 is a mixed bag for Independent School District 196. The deal doesn't make the cuts district leaders feared, but changes to the way the state distributes funding will likely force districts to borrow again next summer to make ends meet.

The District 196 School Board will discuss the state's budget and its impact on the district at a special meeting at 5:45 p.m. tonight at the District Service Center, 3455 153rd Street West in Rosemount.

Finance director Jeff Solomon hadn't seen detailed information about the new budget by late last week, but he said a shift in the state's funding schedule will have an $18- to $20 million cash impact on the district.

The state has made several changes in recent years to the schedule on which it funds schools. Right now, school districts get 70 percent of their state funding in the current year and 30 percent next year, and the percentage of funding pushed to the future has been growing. This year District 196 borrowed $15 million to cover funding shortfalls until that second payment comes in.

The new deal changes that split to 60 percent in the current year and 40 percent delayed. Solomon said that means the district will have to borrow more.

"All of our prior assumptions were under the older, 70-30 number," Solomon said.

The District 196 School Board sold aid anticipation certificates earlier this year to cover expenses over the summer. The sale cost the district an estimated $57,000 in interest and other expenses. Solomon expects the district to use tax anticipation certificates next year. Those are similar to the aid certificates but work on a slightly different timeline.

While the schedule of school funding appears less than ideal for the district, the amount of funding is better than expected. The budget approved this week included an additional $50 per student in state funding this year and another $50 the following year.

The first-year increase will add about $1.5 million in new money to the district's budget.

The District 196 School Board voted in March to cut $8.5 million from its budget for the coming year. Those cuts, including 27.3 teaching positions, were made in anticipation of a 3.5 percent cut in state funding -- about $179 per student.

Solomon said he doesn't expect the district to restore any of those cuts. He said the way the state balanced its budget this year leaves too much uncertainty for the budget two years from now.

"Overall, it's unfortunate to see the state borrowing from schools" Solomon said. "Really, it's pushing problems down the road."

Other changes

There were a few other changes Solomon said will be good for school districts. The legislature's decisions removed a stipulation that said districts had to maintain funding from year to year for support staff and included increased flexibility for districts' ability to transfer money from one fund to another.

"There was some good policy changes that came through that gives more flexibility to local leaders," Solomon said.