An auditor for the Pine Island School District says that by the 2010-11 school year, every school district in the state will be borrowing cash to make up for the state shift in aid.
On December 3, Douglas Blanshan from Larson and Allen reviewed the audit for the district’s 2008-09 school year. He said the district is in good financial shape now and should not need to take out short-term loans until 2010-11, but if there are no changes in state school funding the district will experience a reduced fund balance over the next two years. After that, the district might need to plan to operate on 70 percent of its current funding in the future.
Blanshan also noted the federal stimulus dollars are not new money to the schools, but a replacement for the loss of state dollars that did not create new jobs but kept some jobs from being cut.
Financially well-tended districts like Pine Island are paying the price for education aid shifts that will drive them to use public funds to pay interest on loans rather than educate children. This is a legacy that Minnesota’s policymakers would do well to avoid.