As Minnesota governments reel from the December 4 announcement of the $5.3 billion state budget deficit Twin Cities schools are nervously examining their own budgets in anticipation of cuts in state aid. $476 million of the deficit announced last week will fall during this budget cycle, and the remaining $4.8 million will fall in the next 2-year cycle, beginning in 2009. Even as the state announced its budget deficit, Minneapolis Public Schools announced that the district is facing a $28 million shortfall for the 2009-2010 school year, up by $6 million from projections made in January.
The district’s December 5 press release said:
“- Enrollment projections will decline 2.8% next year – a smaller decline than in years past, but a decline nonetheless.
– State revenue will not increase next year. Earlier projections had anticipated a 2% increase from the state, but that assumption has been changed to a 0% increase, given the recent state economic forecast.
– Personnel costs, which account for 80% of the budget, do not include any increases beyond what is currently identified in existing contracts.
– Investment earnings losses of $4 million.”
“We don’t know what we’re going to do for the long term,” MPS’s Chief Financial Officer Peggy Ingison said in an interview. “We have to decide if we’ve given parents too many options. If there’s only five ELL students at one school, do we continue to offer an ELL program at that school, or do we assign them to another school?”
Ingison said the school board is afraid parents will pull their children from the school district if too many specialized programs — such as language immersion schools or culturally-focused schools — are cut. MPS established many of these programs in recent years in an effort to woo parents back to the district and away from charter schools that provide these kinds of alternative education options.
However, Ingison said, commitments the district made in the “Strong Schools, Strong City” referendum would be considered sacred. She said the $60 million per year in property taxes would not be touched, and would continue to be used to keep class size down, dramatically improve students’ math and reading scores, and buy new textbooks and classroom technology.”
St Paul Public Schools had previously announced a $15 million budget gap for 2009-2010. A district spokesperson said solid budget forecasts would not be ready for two weeks.
Anne Carroll, a member of the SPPS Board of Education, said she is not worried, and called attempts to estimate St Paul’s budget shortfall and possible options “irresponsible” before a full budgetary analysis has been done. Over the next few weeks, Carroll said, the Board would “look at things that don’t advance the strategic plan on behalf of the kids” in order to find savings.
Any decision made, she said, would be based on a thorough-going analysis of different programs and the use of facilities by Chief Accountability Officer Michelle Walker’s office.
Officials from neither Minneapolis nor St Paul Public Schools were certain when final decisions would be made.
Minneapolis’s Ingison estimated the Board of Education won’t take action until sometime after the start of the 2009-2010 school year. “The Board wants to engage the community and parents a lot on this” and get input on decisions to close schools or shutter costly specialty programs, Ingison said.
The 2009-2010 school year is when most of the cuts designed to fix the state’s $4.8 billion deficit will hit public schools.
With $476 million cuts needed to balance the state budget this fiscal year, Minneapolis schools’ Ingison is worried that this year’s budget may suffer if legislators use a time-honored tactic of dealing with temporary fiscal emergencies, called an “accounting shift.”
In an accounting shift, according to Ingison, the state legislature defers one or more of the typical bi-monthly payments to school districts, forcing them to borrow money on a short-term basis to meet immediate needs. With credit markets very tight, though, that is a near-impossible option, Ingison said.
The chair of the House K-12 Education Finance Committee, Representative Mindy Greiling (DFL-64A), is also worried that Governor Tim Pawlenty might reach for this tool in any proposed solution. However, she said cuts from the education budget are not likely to happen in this budget cycle because there was no unspent money in the education budget that could be cut.
In the long term, cuts to education funding were not likely, Rep. Greiling said. “I take heart that the Governor has named education funding as one of his priorities to protect,” she said. “I look forward to holding him to his promise.”
Repeated calls to Governor Pawlenty’s office for comment were not answered. His office’s December 4 statement said:
The Governor’s reduction order targets 10 percent of unspent operating funds in the budget period that ends June 30, 2009, and would save approximately $25-50 million that would be used to reduce the current shortfall. State agencies will submit detailed plans to meet this target by January 1. Areas exempted from these immediate state agency actions include public safety, military and veterans affairs, and corrections.
James Sanna is a freelance writer and an intern covering education issues for the Daily Planet.