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The few additional dollars from the Legislature for next year’s Minnesota school budgets will mostly be used to take pressure off shrinking reserve accounts and soften budget reductions.

Schools have to be careful how they spend the money because it probably won’t be available again.

The new money adds up to $525,000 for St. Cloud, $200,000 for Sauk Rapids-Rice, $130,000 for Rocori and $170,000 for Sartell-St. Stephen.

The new money is minuscule in the context of the millions of dollars each district spends each year. In St. Cloud, the $525,000 is 0.6 percent of an $88.5 million budget planned for 2008-09.

“We know the district always welcomes (new funding), however slight the increase might be. It could play a role in how low the fund balance gets,” Superintendent Bruce Watkins said.

St. Cloud and Sartell-St. Stephen school district are expected to keep the money in reserves.

The general fund reserves in both districts are under pressure because both districts plan to spend some of the money to balance budgets next year and soften or eliminate the need for budget reductions.

Sauk Rapids-Rice, with $1.5 million in reductions, plans to look at its budget again to see if some things can be put back, Superintendent Greg Vandal said.

Legislative help

The Legislature this weekend approved an additional $51 per student for schools for 2008-09. It will cost the state about $41 million. The law allows districts to spend up to $51 per student on regular education costs if they have reserves in the building and repairs account. The St. Cloud, Sauk Rapids and Sartell districts have enough money in reserve that they could do that. Only Sartell-St. Stephen plans to consider it right now.

It’s unusual for the state to send school districts money in the second year of the state’s two-year budget cycle. The money will have minimal impact on 2008-09 budgets that have to be set by June 30.

It is the 2009 session, which could be done by this time next year, that will have the greatest effect on whether schools have to make reductions for 2009-2010. That session could include a major push from schools to change the way the state pays for education.

St. Cloud also plans to ask voters in Nov. 4 to restore a property tax increase voters rejected in November. If that doesn’t pass, the district plans to make $4.3 million in reductions.

St. Cloud had to close a $4.8 million budget shortfall for 2008-09 after voters rejected in November a request to renew a property tax increase. The district plans to plug the gap by spending $2.2 million in reserves from the general fund and $1 million from the building and repairs fund. The district made $1.5 million in reductions, including changes to bus routes and reductions in special education and activities programs.

“We have already declared what the cuts would be next year. I don’t think we are backing away from those,” Watkins said.

Part of St. Cloud’s new revenue has already been earmarked. The district agreed to give teachers 70 percent of the first $250,000 in additional funding from the Legislature. The money was to help teachers offset the additional cost of health insurance while the contract was being settled. This summer, 341 families are expected to receive money.

The district is expected to have about $275,000 available once the contractual obligations are met, said Kevin Januszewski, director of business services. Five other unions have yet to settle and might seek the same one-time payment for health insurance costs.

Caution

School districts have to be cautious about their use of the dollars because they will be only be available one time and are not being built into the school-funding formula. Any dollars used for a recurring expense means the money has to be found again in subsequent years.

“You can’t increase your budget permanently with one-time money,” said Jerry Von Korff, a St. Cloud school board member who chairs the finance committee.

Sartell could spend as much as $1 million out of its reserves in 2008-09, Superintendent Dale Gasser said. The district might consider using the capital reserves option as well. The new money and the capital reserves option would help rebuild the fund balance. The $170,000 amounts to about three teachers, Gasser said.

“It will also reduce the amount we have to spend out of our reserves,” Gasser said.

In Sauk Rapids-Rice, the district will examine what can be done with the one-time dollars, Vandal said.

“It provides us an opportunity to take a look at the things that we cut and what we can restore. It doesn’t provide us with the opportunity to do a complete restoration for what was lost,” Vandal said,

Sauk Rapids closed a $1.5 million shortfall with reductions and fee increases. The district has made $3 million in reductions in the past two years.

“There is no question; because it is one-time money, we have to be very strategic how we put it into place,” Vandal said.

Rocori Superintendent Scott Staska said the board has asked him to look for ways the new money can help out next year. He said it might be used for equipment and supplies. That would free up money from a property tax increase approved in 2007 that is more sustainable.

“It helps balance next year’s budget for us. How can we use it to meet student needs but not (have it) become a long-term obligation?” Staska said.

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