![]() In the absence of additional state funds, districts often have no choice but to make cuts.Įvery New York district has its own state-mandated cap on the size of tax increases they can levy on property owners. The Government Finance Officers Association recommends governments retain two months’ worth of operating expenditures in reserves.īut New York districts can’t do the same-the law caps their reserves at 4 percent of their annual operating budget. In New York, the state has been building up its reserves in recent years, in case an emergency like the COVID-19 pandemic requires a massive unexpected investment. Schools have to commit the last round of COVID relief money they have by Sept. ![]() Ned Lamont, a Democrat, answered concerns about a lower-than-expected increase in proposed state aid for public schools by saying schools still have federal COVID relief money to spend, according to reporting in the Hartford Courant. Jeff Landry, a Republican, said they’re wary of including a permanent teacher pay bonus in future budgets because they’d struggle to remove it when a fiscal downturn materializes, the Louisiana Illuminator reported. ![]() States often make financial decisions based at least in part on projections of what their finances will look like in the future. Paul and Minneapolis school districts will experience budget shortfalls of $90 million to $110 million this fall if the state doesn’t offer any additional aid.įears about the future inform decisions in the present According to a survey by the Association of Metropolitan School Districts in Minnesota, the St. Some districts in the state have it even worse. Meanwhile, rhetoric around a massive influx of cash emboldened the district’s labor unions to seek substantial raises. Much of that money was geared toward particular categories of expenses, rather than letting districts spend it on whatever they decided their most pressing needs were. But Morstad said the reality was more complicated. State officials last year touted historic investments in K-12 schools. The most recent Consumer Price Index report from the federal government showed a year-over-year increase of 3.1 percent in the cost of consumer goods. “With inflation still in the threes, that’s negative for us,” he said. The state will supply the district with a 2 percent funding increase for the coming school year. That’s true for the Osseo schools in Minnesota, said John Morstad, the 21,000-student district’s executive director of finance and operations. Inflation persists, and school funding is struggling to keep up Plus, Thatcher writes, “inflation has severely degraded the purchasing power of federal spending and state increases in education appropriations.” Many state investments in K-12 schools come with strings attached-they can only be spent on certain programs or types of staff members, or districts must contribute a share of their own funds in order to receive the additional state aid. Some states, like Wyoming, are implementing policies that reduce local tax collections, offsetting the impact of state aid increases. ![]() Alaska’s governor is threatening to veto an education funding bill over concerns about the state’s ability to fund budgetary increases. Several large Minnesota districts are facing substantial deficits as the state shores up resources for a potential deficit of its own. The governor of Louisiana has said he’s opposed to permanently extending a pay bonus the state gave teachers last year. New York is one of several states bracing for a downturn in tax revenue collections-and curtailing the major boosts in K-12 school funding that have been common over the past few years. It’s just the timing, the planning, the effort that it takes isn’t going to happen in one budget cycle,” he said. The new financial reality, however, may materialize in just a few months. But those arrangements take time to craft, and cost savings could take even longer, if they arrive at all. He’s already begun talks with other districts over sharing programs or even consolidating with another nearby district.
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