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PR schools could see $3.5 million in overdue aid payments

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News Park Rapids, 56470
Park Rapids Enterprise
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Park Rapids Minnesota PO Box 111 56470

The $3.5 million the Park Rapids School District is anticipating isn't a windfall, by any means.

Call it payments in arrears. Without the finance charges and interest. The Dec. 6 memo from Minnesota's Department of Education changes the state aid payment schedule to schools "due to the November forecast."

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State aid payments increased Dec. 15 from 64.3 percent to 82.5 percent statewide.

Park Rapids Superintendent Lance Bagstad told the board Monday night that should amount to $3.5 million.

The director of the Division of School Finance, Tom Melcher, sent a memo out to school districts indicating "a $1.330 billion improvement in the state's budget outlook for the FY 2012- FY 2013 biennium. The entire improvement in the forecast balance is automatically allocated to reducing the school aid shifts enacted in recent legislative sessions."

So the school districts, according to Melcher, will be getting back $1.324 billion, with $1.101 billion still in arrears.

The Dec. 15 payment of $505.9 million was injected to play "catch-up."

But if school districts had any idea about going on a splurge, the memo continued: "The percentage of state aids payable during the school year will be reviewed again when the February 2013 forecast is completed."

The reimbursements will continue at the 82.5 percent rate "assuming no legislative change is made," Melcher's memo ends.

But many other issues hang in the balance, said finance director Carol Hutchinson. Speculating on school finances is just that - speculation.

Set aside the uncertainties of the fiscal cliff. More uncertainties are looming.

"It's a negotiation year," she said. "We anticipate significant increases in health insurance costs and again some of that would be attributable to the legislature. We're going to be starting the ALC (Alternative Learning Program)."

And Legislative changes to re-work the district funding formula, erasing disparities between funding metro and rural schools, are always an issue. "That is the intent, to simplify, make things more equitable, one district to the next," Hutchinson said.

The funding formula "is very complex," she added.

One piece of a legislative proposal would, once again, roll in a portion of the school referendum into general education, making seasonal taxpayers liable under a "general aid" formula.

Hutchinson can't speculate on whether that would pass.

But referendums spread across the general market value would be fairer to taxpayers while raising a stink with summer residents, who would undoubtedly question why they should contribute to school districts their children don't attend.

The only non-speculative aspect of the state financing is the amount of payback, Hutchinson said. So far.

"The key there is that was money owed us," she said.

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Sarah Smith
Sarah Smith is the outdoors editor. She covers courts, business and breaking news in addition to outdoors events.
(218) 732-3364
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