Posted at: 12/03/2012 4:50 PM
Updated at: 12/03/2012 6:13 PM
By: Dan Conradt
Revenue Forecast Catches Schools' Attention
(ABC 6 News) -- We should get a better idea of Minnesota's financial health this week when the state issues its latest revenue forecast. A when it does, Minnesota school districts will be paying close attention.
"The budget has to be balanced each year," says DFL State Representative Jeanne Poppe of Austin.
And when you need money, you go where the money is.
"School districts make up the largest share of state budget expenditures," says the Austin school district’s Mark Stotts.
“Unfortunately the schools have become our banker," Poppe told us. “We borrowed from the schools, so instead of giving the schools what they're supposed to get their money, there is a delay of payment."
“And the remaining amounts we'll pay you in later years," Stotts continued.
But since school districts still have their own financial obligations, it often means they need to do short-term borrowing. The Austin school district has done that once, 7 million dollars borrowed this past March, and repaid six months later with interest.
"Even though interest rates are favorable, that was about $39,000 to the district," Stotts explained.
"It's not necessarily the forthright way of balancing the budget. It is a way to kind of manipulate the dollars," said Poppe.
While the state's budget is balanced on paper, the state still owes schools 2.4 billion dollars.
"Under current state statute they are obligated to pay that, but obviously the legislature has the power to change that at any time," Stotts told us.
“People of Minnesota need to recognize that we have been taking from the schools in order to provide other services that people expect," said Poppe.
State law requires that any budget surplus be first used to repay the schools.