Area schools respond to state aid delays
WORTHINGTON -- Delayed aid payments to schools will affect most districts in southwest Minnesota, with many seeing the postponement of their entire March and April payments until late May.
The amount delayed is largely determined by the size of financial reserves the district has on hand. Districts with the least money in the bank will receive normal payments, while some districts will get only partial payments and some will get no money at all.
Hills-Beaver Creek, Red Rock Central and Murray County Central school districts will not have their spring payments delayed; while Jackson County Central, Mountain Lake Public Schools and Windom Area school districts will receive partial payments.
Worthington District 518 is among many area schools that will have its March 15, March 30 and April 15 payments delayed. The district will be short about $2.5 million for those months.
"At this point, we have a sufficient fund balance to cover it for this year; we don't believe we'd have to engage in any short-term borrowing for that purpose," said Dave Skog, the district's director of management services.
During the next fiscal year, which starts in July, that might not be the case. "If they start taking earlier and take a larger amount for next year, that's obviously going to have a different effect on our cash flow," Skog added.
Windom Area Public School District will be affected to a lesser extent, with about $59,000, or 6 percent of its roughly $965,000 payment being delayed.
Superintendent Wayne Wormstadt said the district would be able to absorb the blow. The district borrowed nearly $1 million earlier this year in the face of uncertainty about when stimulus funds would be received.
"We have enough left over ... we'll use that to work our way through state aid payment delays," Wormstadt said. "We have fought for years to get a healthy fund balance, and now we'll have to be dealing with state aid payment delays and it's possible they could be doing those in the next years also."
"The only benefit to this is it won't hurt the state credit rating, which affects all of us," he added.
The state will run out of money in March and April, and the Pawlenty administration has said it needs to borrow money from schools to pay the state's bills. The state sent school superintendents a notice Tuesday saying it will delay a total of $423 million to about two-thirds of districts. The administration has promised to repay the money on May 30, when tax revenues are expected to increase enough to cover the state's needs.