Richfield Public Schools Hurt—But Prepared—For Latest K-12 Education Bill

As Minnesota’s last week, the Richfield Public School District emerged with a clearer picture of how the state’s new public education funding formula and other measures in the education bill will affect the city’s schools.

Business Manager Michael Schwartz estimated that the district would need to ask the to approve roughly $16.5 million in borrowing at some point during the next several months in order to cover funding gaps left by the new bill. He said it was a possibility the district was prepared for since it anticipated that state funding would remain flat.

The most prominent—and for some educators most disconcerting—change in the new education bill is a provision which delays approximately $700 million in school funds due to districts across Minnesota until the next two-year budget cycle. As a result, Richfield Public Schools will most likely have to go in for short-term borrowing in order to cover gaps left by the payment delay.

While the —meaning schools get 70 percent of money owed them by the state, with 30 percent of it shifted until the following year—that formula will be 60/40 under the new bill.

The per-pupil general education formula will be increased by $50 in each of the next two years in order help make up the difference, but uncertainty remains about how much of that increase will be left over after schools pay interest on borrowing, which the bill forces them into. Depending on the loan’s rate, the approximately $200,000 Richfield schools receive in additional state money may largely be used to repay interest.

“We’re estimating that the borrowing cost and interest will be somewhere between $120,000 and $150,000,” Schwartz said. “It could be more or it could be less. We’ll know more by the middle of August [2011],” he said.

Of particular concern is the recent downgrading of Minnesota’s bond rating, previously reported by the Star Tribune. If other ratings agencies follow suit, the cost of borrowing for Minnesota schools could rise significantly. Schwartz warned that the additional money from the per-pupil formula wasn’t especially going to help the district, since costs—for everything from teacher salaries to fuel—continue to rise even as state funding stays effectively flat.

Other Funding Changes

Also eliminated as part of the compromise public education was integration aid in Minnesota schools. Aimed at encouraging racial integration, especially in more urban areas like Minneapolis, St. Paul and Duluth, Richfield schools previously received between $580,000 and $600,000 from integration aid annually. While that funding source will be phased out over the next two years, it represents a significant decline in revenue.

Rep. Linda Slocum (DFL-Richfield) teaches at the Field Community School in Minneapolis and said she wouldn’t be surprised if, under the new education bill, she saw more than 40 students in some of her classrooms during the next several years. Rep. Slocum reported that this past year she had one geography class with 37 eighth-graders.

“I see directly what the cuts in education are. We’re at the bone, there’s no more,” she said. “Anything we cut is really going to effect people’s lives.”

No Democratic legislators voted to pass the education bill last week, although the bill passed 71-57 in the House and 28-26 in the Senate.

Up next for Richfield Public Schools will be a special closed session at 6:30 a.m. July 27 to discuss salary negotiations, followed by a special meeting at 7 p.m. Aug. 8 to discuss the possibility of increasing a tax levy for the district. The school board will then have its regular meeting at 7 p.m. Aug. 15.