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Nevis school cuts possible in wake of budget crunch

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news Park Rapids, 56470
Park Rapids Minnesota PO Box 111 56470

A reduction or delay in state aid and the decrease in student numbers this year may lead to cuts in staff, Nevis superintendent Steve Rassier cautioned board members this week.

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"I believe we will have to trim $250,000 to $300,000" from next year's budget, Rassier told the board, noting 67 percent of the district budget is used for professional salaries - teachers and administrators.

Although "still under discussion," the district is considering cutting one administrative post, a physical education teacher, a Title I reading specialist and reduce an English teaching position by half.

If a sufficient number of veteran staff members takes advantage of the "lucrative" retirement incentive being proposed, however, the cuts may not be necessary, Rassier said after the meeting.

Teachers who've been employed by the district seven consecutive years are eligible to retire and be paid an amount equal to 65 percent of their 2009-10 salary. The funds would be deposited in a health care savings plan over a five-year period.

Four staff members have attained the Rule of 90, age and years of employment totaling 90, and could retire with full benefits, Rassier said. Others could retire without full benefits, but be eligible for the retirement incentive.

Teachers have until the end of February to apply for the incentive.

The state is facing a $1.2 billion budget shortfall, Rassier said. "For the first time they are talking school district funding may be cut."

The current $5,124 per pupil unit in state aid could be reduced by up to $500, he said.

And this year's 30-student drop in enrollment means $240,000 lost in funding for the district.

The state's "73-27" shift in funding school districts will affect the fund balance," Rassier said.

In previous years, the state provided 90 percent of funding to districts within the fiscal year, 10 percent withheld - approximately $350,000 in Nevis' case - until final reports were complete, usually in the early fall.

Now, "because the state doesn't have the money," the suspended payment has been upped to 27 percent - about $950,000 now being withheld. Rassier pointed out the district received 35 percent of its general fund revenue through January, compared with 43 percent a year ago, a $392,000 difference.

And the full amount may not be repaid, Rassier said. "I don't think they've got it; we may get 10 percent."

He also reiterated concern that this year's federal stimulus dollars - $337,890 - must next year come from the state, an estimated $816 million statewide.

Expenditures are on pace with last year, he said the numbers nearly identical. "It's revenue that will create the budget problem."

Rassier pointed out the last "unallotment" repayment in Minnesota spanned 10 years.

"We've watched Walker-Hackensack-Akeley and Park Rapids make significant cuts that we haven't had to do," Rassier said. "But we can't afford to keep the staff we have in place."

"The concern is next year," Rassier said. "I'm not hearing one piece of good financial news."

School levies are closely regulated by the state, he said. Health and safety funds are the exception; the money can be levied without going to voters.

"There is not a lot a district can do to control revenue," Rassier told the board.

The state will not learn until April if school districts that have applied will be eligible for Race to the Top funding.

Board members suggested looking at projected enrollment figures and holding work sessions to address the issue.

"Let's hope some magic windfall shows up," board chair Ed Becker said.

The board learned this year's budget has been revised to reflect revenues of $6,154,020 and expenditures of $6,079,787.

"The question is what happens next year," Rassier said.

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