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Thursday, September 8, 2011

MN Schools Short on Cash

MN Schools Short on Cash

Reported by: Shane Delaney

ALBERT LEA, MN - Minnesota public schools are back in session and already most of them are struggling for money.

Earlier this year state lawmakers agreed to borrow money from Minnesota schools to help resolve the state's government shutdown. When the state borrowed the $2.2 billion they never set an exact date on when to pay it back.
That means for this academic year schools will be short money, and districts with already declining enrollments are looking for funding elsewhere. 

“The state is taking out a short term loan on the backs of the school districts,” said Michael Funk, superintendent of Albert Lea Public Schools.

Funk says his district, along with about 90 percent of public districts in the state, are taking out loans to cover the shortage.

“It amounts to about $20,000 in interest we have to pay throughout the year but that's because we have a pretty good fund balance we can dip into when the state isn't paying us money,” said Funk.

Funk says the funding gap comes at a time when a record setting number of districts are asking voters for an increase in operation levees this November.

“That is a direct result I think of not having real solid balanced and not having enough money from the state and this shift just compounds things,” said Funk.

The shift is even hurting districts with increasing enrollment.

“We're looking at probably late spring maybe early summer where we'll run out of cash to pay our bills and we'll have to go out and then borrow,” said David Krenz, superintendent of Austin Public Schools.

Krenz says his district has already secured a line of credit with a local bank. He says while an increasing enrollment means more state money, it also means more expenses.

“In our case we're continuing to grow so that's a good thing and being a larger district those students can fit in a little easier than if you were in a smaller district,” said Krenz.

And even though districts will eventually get the money paid back to them, some administrators say enough is enough.

“Is the education of our kids important or is playing this game of financial gimmickry what we want to do, and I wish we had real leaders at the capitol who would step up and say enough is enough,” said Funk.

When the state does repay they'll give the districts an additional $50 per student to help cover interest charges and other costs.
Funk says that should be enough for the Albert Lea district , but many in the state will have to absorb those interest charges

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