State aid the ‘best economic news’ in decades for NBAPS

North Branch Area Public Schools is going to see a boon as the result of the $15.7 billion education bill Minnesota Gov. Mark Dayton signed into law last month.

Up to $3 million in additional funding could be a possibility during the next biennium, NBAPS Finance Director Randi Johnson said at the Thursday school board meeting.

Johnson explained the numbers still have to be smoothed out, but North Branch stands to benefit from the Legislature’s decision.

“When I read my email (about the funding), I was like, ‘Oh, my gosh,’” Superintendent Deb Henton said.

Johnson explained there have been increases in the state’s basic funding formula, and there have also been significant changes in the way the state counts students and subsequently allocates money.

How the state shells out cash for special education has also changed, adding more dollars to the pool.

“There’s significant potential for new funding streams, should the board choose to take advantage of those,” Johnson said.

She said the change in the basic state funding formula is an increase of 1.5 percent each year for the upcoming biennium, which equates to an increase of about $274,000 for North Branch schools in the first year.

In the second year, that amount grows to more than $1 million, due in large part to the state funding all-day, every-day kindergarten and changes in pupil weights.

“All of a sudden our kindergarten students are counted as full-time students, assuming that families take advantage of (all-day kindergarten),” Johnson said.

She noted the change in the funding formula also impacts the amount of money the district will receive from the state in compensatory funding, which is allocated based on the number of students on free and reduced lunch.

“That has specific areas you have to use that money for, but it still automatically triggers increases,” she said.

Another big change is in how the state will offset the cost of operating levies.

“The operating referendum has the potential for the school to get an additional $300 per pupil unit,” Johnson said.

She explained a levy would have the potential of generating $966,000 in new revenue, with far more of that money being covered by the state than in the past.

She said the state would cover 55 percent of that first $300, with 45 percent being paid by local property taxes.

“If you contrast that to the operating levy that you attempted a year ago in the fall, at that formula, 80 percent was local property taxes, and 20 percent was state aid,” Johnson said to the board.

Under the new location-equity index, the district could also garner another $212 per pupil unit.

“There was a lot of debate about how that was going to work because the legislation was not clear on how that interacted with this other $300 per pupil unit,” Johnson said. “The news we got during (a) policy meeting is that they would allow school districts to stack that.”

So, if stacked, the district could get up to $512 per pupil unit, if the school board chooses to levy that amount.

With the $212 added in, the total aid to the district rises another $600,000 in the second year of the biennium.

However, Johnson said the location-equity index money is not equalized at the same rate by the state.

“It’s more local property taxes,” she said. “It’s 78 percent local, 22 percent state aid.”

In a follow-up email after the board meeting, Johnson said the board could levy the $512 per pupil unit without having an election where residents would vote on the tax.

Board Member Kirby Ekstrom asked Johnson if the board would be required to levy the maximum amount.

Johnson explained there is no requirement; the board could levy the amount it chooses, up to $512 per pupil unit.

When other, miscellaneous funding streams are figured in, the possible funding total levels out at about $3 million over the next two years.

Johnson said the district’s finance department had been projecting a $2.2 million deficit for 2014-15.

“We’ve got the potential for thinking about not cutting and potentially even expanding programming if the board chooses to move in that direction,” she said.

“This is the best news we’ve received in a very long time,” School Board Chairperson Kim Salo said.

Johnson added, “It’s the best economic news I’ve had in my career here, and that’s three decades.”

 

In other news, the board:

• Accepted the resignation of Sunrise River Elementary School Principal Jason Hartmann. He was recently named the new principal at Blue Heron Elementary School in Lino Lakes.

“Jason came to us four years ago, and he brought a building that had not been making adequate yearly progress to a building that’s now a celebration school,” Henton said. “We could not be more proud of his effort.”

• Voted 4-2 to offer Superintendent Deb Henton a new contract for next year. Board members Randy Westby and Jay Falk cast the dissenting votes.

  • Flambeau

    This may be the “best economic news in decades” for the district but it isn’t necessarily all that great for tax payers.

    Of the $512 total about 40% ($212) would be covered by the state and 60% ($300) would be covered by higher local property taxes.

    While I would agree that 40/60 is better than 20/80, from the taxpayers perspective $300 is a lot more than $0 which is what we currently pay for operating levies.

    What I think Randi Johnson and Superintendent Henton may really be referring to when they say this is the “best economic news they have had in my career ” and “When I read my email (about the funding), I was like, ‘Oh, my gosh’ (perhaps we could envision this being followed closely by “ Like, this is Soooo TOTALLY Awesome!”?) is that it appears they will be able to levy this WITHOUT having to ask for taxpayer approval.

    Whenever this District has had the opportunity to unilaterally raise property taxes over the past decade they have leaped at the chance regardless of what it was for (Think Gymnasium addition, OPEB Bonding, Q-Comp). As Johnson says, “That has specific areas you have to use that money for, but it still automatically triggers increases” and that is what it is all about.

    So it doesn’t really matter all that much that there may be more things the District will have to do – like providing all day kindergarten – it is all about growing revenue.

    The District has spent the better part of the last ten years working on their Community Engagement Plan and attempting to foster the notion in the Community that the District is a good steward of their financial resources.

    If in fact the District chooses to levy this full $512 per pupil just because they can thanks to Governor Dayton and a Democrat controlled legislature – I suspect they will find that whatever trust and belief in the districts financial stewardship they may have built up over the years may quickly evaporate when people get their property tax bills and they will be back to square one in that regard.

    I know it goes against the District’s grain to exercise fiscal restraint where “significant potential for new funding streams” are concerned but I would advise them to do so if they really want to demonstrate good financial stewardship. Good financial stewardship is not much of a virtue when you have no other options. It is only when you do have other options that is the test of good financial stewardship.

    Of course, if all that community engagement stuff and the District as a Business stuff and the Community Ambassador stuff was all really bunch of baloney simply designed to find some way to get people to pass a levy referendum as many a cynic over the years has suggested well then we know how things will turn out.

    It will be interesting to see how the District ultimately defines themselves with regard to this issue of financial stewardship.

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