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State's latest funding shift won't affect ISD 192

A plan by the state of Minnesota to balance its budget by delaying payments to school districts should not have a significant impact in the Farmington School District, finance director Jeff Priess said.

The Minnesota Management and Budget department on Tuesday told schools the state will delay $423 million of payments to them this so the state can pay its bills.

The missed payments are to be made up by the end of May, but some school leaders say they may have to take out short-term loans.

Independent School District 192 took out a loan last year to cover a similar shift.

"It certainly isn't good news," Priess said. "The state's going to try to balance their budgets on the backs of the school districts."

The new shift will affect only school districts that have an unreserved fund balance of at least $700 per pupil. State law dating back to 1986 allows the state to delay payments to districts with as little as $350 per student in unreserved funds. If the state had followed that guideline it could have meant $680,000 in shifts for the Farmington district.

The fact the district will not be affected is not entirely good news. Priess said the district's unreserved fund balance -- essentially a rainy day fund that allows it to cover unexpected expenses -- is currently about 5 percent of its overall budget. District policy calls for the fund balance to be 8 percent of the budget.

Two-hundred thirty-one districts' payments will be delayed out of 341 districts.

State attorneys say the law requires the administration to delay school payments before it can borrow from outside sources.

The latest payment delay comes on top of an overall delay enacted last summer when Pawlenty balanced a $2.7 billion budget deficit. Of his solution, $1.8 billion was school payment delays.

Nathan Hansen

Nathan Hansen has been a reporter and editor with the Farmington Independent and the Rosemount Town Pages since 1997. He is very tall.

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