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Government in action: Implications for District #861 (05/31/2009)
By Paul Durand
Rarely a day goes by when I am not asked a question about next year’s school district budget or the future we face because of the current economic downturn in the state and nation. I’m generally an optimist by nature yet the challenges we face do require us to work extra hard gathering accurate facts so we can carefully consider any potential actions. Some have called this recession a “crisis of confidence”. I agree, yet we must never forget the percentages, dollar signs and decimal points being publicly bandied around connect to real life issues for our families, their students and our employees. Public schools, just like our cities, townships, county and our area post-secondary institutions all reflect the financial realities being faced today by people. One can hardly open a newspaper, listen to the radio or watch television without being bombarded with information, mostly negative, about jobless claims, worker layoffs, or budget shortfalls.

In February 2009 we projected a budget deficit for the Winona Area Public Schools of 3.17 million dollars (details can be found at: www.winona.k12.mn.us – Multi-Year Financial Forecast 02-2009). Our Board of Education acted expeditiously and responsibly as they considered many complex options to address this budget shortfall. In May our Board took final action to approve necessary expenditure reductions and revenue enhancements. This task would have been infinitely more difficult if it were not for many caring District #861 employees (teachers, clerical staff, maintenance employees, administrators, coaches, advisors and many other dedicated employees) who stepped up to help through actions, ideas and possible solutions to address the challenges we face. We have made the hard decisions locally, and now we must turn our attention to the state and federal levels to carefully watch to understand how the decisions made by the Minnesota Legislature, Governor Pawlenty, the U.S. Congress and President Obama will impact the educational system in Winona. The following are a few of the very IMPORTANT factors we consider:

Factors we consider at the local level:

· Our school district is currently negotiating contracts with several of our employee bargaining units. Our largest employee group representing our teachers contract expires June 30. This means we are currently negotiating with the majority of our school staff. Our contracts are potentially a major factor of increased district expenses. This year’s talks could be especially rough because of the flat state funding, significant budgetary shortfalls and economic pressures. Tom Dooher, president of the Education Minnesota teachers union, said, “It was challenging last time, and we had some money. Without new revenue, I think it’s going to make it even more difficult.”

· Nearly 75% of the school district General Fund budgets are comprised of salary, wages and employee benefits.

Factors we consider from the state level:

· The 2009 Legislature adjourned with no resolution to the budget deficit. Governor Pawlenty says, “There will be no special session and there will be no government shutdown.”

· The governor said that he would use his veto, suspend payments, and unallot to trim the two-year budget down to $31 billion, if a deal was not reached. Measures such as payment suspensions or unallotment could begin on July 1, 2009.

· When Governor Pawlenty signed the E-12 schools bill into law it froze school funding over the next two years. He said he will likely resort to funding “shifts,” which delay some state payments to schools by a year.

· If the state “shifts” funding schools must borrow money to meet the day-to-day cash flow needs and pay interest on that borrowed money. A big funding shift compounds the problem of schools getting no new money while facing increased costs due to inflation. Factors we consider from the federal level:

· Though the American Recovery and Reinvestment Act (ARRA) of 2009 the federal government is making a one-time multibillion dollar investment in education across the country. However historic these funds may be they also bring unprecedented levels of accountability, transparency and paperwork.

· The state of Minnesota will, in each of fiscal years 2009, 2010, and 2011, be required to maintain support education at least at the level of such support in fiscal year 2006. We project the Winona Area Public Schools will receive approximately $950,000 in ARRA revenues that must be spent within a 27 month window with the majority of these funds required to cover excess or additional expenses directly in special education.

·School districts are encouraged to spend ARRA funds quickly to save and create jobs to help drive the nation’s economic recovery. But we have also been advised to invest one-time funds thoughtfully to minimize the “funding cliff.” Since these funds are temporary, depending on the program, funds are available for only two to three years we must use them in ways that do not result in unsustainable continuing commitments after the funding expires.

· To assure the most effective use of the new federal funds there are additional and more rigorous reporting requirements.

On February 24th, 2009, President Obama stated, “In a global economy where the most valuable skill you can sell is your knowledge, a good education is no longer just a pathway to opportunity - it is a prerequisite. The countries that out-teach us today will out-compete us tomorrow.” With this in mind, I believe the continued success of public education in Winona depends on us focusing our collective energies on informed leadership, data-based decision making, using sound educational and financial judgment, upon coordination, increased collaborations and ever transparent communications.



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