Regardless of shutdown, state funds should continue going to public schools

Regardless of the politics, state funds should keep going to schools. That’s my conclusion after interviewing about 20 superintendents and principals, Gen Olson, chair of the Minnesota Senate Education Committee (and a Republican) and Charlene Briner, a spokesperson for the Minnesota Department of Education (MDE). A shutdown may delay in payments to schools. Jeff Solomon, ISD 196 Director of Finance and Operations explained that “Our district’s estimated state aid payments for July 15th is $7,774,219. However we are also anticipating approximately another $1,220,000 on July 13th and 14th. Our total anticipated mid July payments are approximately $9,000,000.”

Jane Houska, Fiscal Operations Manager for Farmington Area Schools told me that the district expected to receive approximately $1.8 million in state aid payments on July 15. Michelle Vargas, Chief Financial Officer of Anoka-Hennepin ISD #11, the state’s largest district, reported that the district anticipates a payment of $13.6 million on July 15. Statewide, Briner of MDE estimated that school districts normally would be paid about $296 million.

What’s the impact of a delay in payments? Solomon explained, “We would be required to access our line of credit to cash flow our obligations.” Houska wrote, “With the potential shut down of the State, the District has positioned itself to carry on business for a little while but there are always concerns to be thinking about. For our short-term solution, we are…setting up a line of credit. With any borrowing situation comes interest costs and lender fees, which is an additional cost to the district. Meaning we are not able to spend these funds on the classroom where they were intended to be spent.

If we don’t receive our aid payments for the month of July, we have interest payments on our bonds that are due by the beginning of August which will put us in a cash flow crunch. If the government shutdown is for an extended period of time, we will need to look at other scenarios to keep our business running.”Jamie Steckart of Northwest Passage in Coon Rapids wrote, “All of our employees are on 10 month contracts but have their pay spread out over 12 months. The July 15th payments is money they have already earned and is money the state has promised us. If they want to stop payments to schools then I suggest that they issue the schools the money owed from last year so we can meet past obligations. Currently the state owes our school close to $500,000 from last year’s revenue.”

Houska also noted, “Another issue with the shutdown, is ensuring our current teaching staff is able renew their teaching license in a timely manner. Additionally, any new teachers who are getting their license for the first time, before the government closure, are facing a 6-8 week turn around. So now what will happen to these individuals if they are not able to obtain a license by the time school starts.George Weber, Pierz area superintendent told me, “I think the financial challenges are only a portion of the problem. The state has gone down the path of creating punitive measures through No Child Left Behind and other MN policies. The turmoil created by the inability of the two parties to compromise and the subsequent lack of continuity of direction and support for schools is an even larger challenge.

Jerry Hansen of Milaca also pointed out that many school districts, including his, do summer construction projects…some districts may not be able to open entire sections or buildings on time if State inspections and certificates of occupancy can not be is
sued.”

Senator Gen Olson, chair of the Senate Education Committee (and a Republican) told me that “based on advice from our staff, I believe the Governor and MDE already have the authority to make general fund payments to schools.” She says that the administration would have to designate people as “essential” to actually send the checks to schools. Ms. Briner wrote, “State aid payments to schools have not been deemed a “priority 1 or 2 critical service” or those which effect life or safety. Ultimately, it is up to the Court to make the final determination on critical services.”

Solomon wrote, “We are hoping and strongly encouraging our state leaders to finish their work and resolve the budget decisions prior to July 1st.”

Briner wrote that Governor Dayton wants a compromise, not a shutdown. Olson agree that they want an agreement, not a shutdown. The principles are deeply felt and intense. But I hope the courts conclude that regardless of the debate, state payments to schools should continue. Educators are trying to do their best for youngsters. They deserve the best we can do for them, which I think means, hire people and send out the money that schools already have been promised.