The federal stimulus package could reduce the Annandale School District’s $921,796 deficit by $110,000 and possibly more. While the specifics of the 1,000-page bill are still being reviewed by the Minnesota Department of Education, it’s clear that Minnesota will be getting an estimated $816 million as part of the State Fiscal Stabilization Act. Of that amount, the governor must allocate 81 percent to kindergarten through 12th grade, post secondary and early childhood programs. The federal help comes less than a month before Annandale board members are due to make final decisions on a list of cuts that would eliminate multiple programs and at least 12 full-time jobs. While the bill will far from solve all of Minnesota schools’ financial woes, it will at least help the state in keeping funding constant for the next three years, Annandale Supt. Steve Niklaus said. "The good news is it is going to help support services so it won’t be a real downturn for kids because of the recession." The stimulus bill will help Annandale schools in two big ways: The first is through new federal special education funding, which is where the district is likely to see some additional money. Annandale’s share of the $95 million influx into the state for special ed is estimated to be $220,000 each year for two years. Half of that has to go to special education services only. The other half, about $110,000, can be put toward general expenditures to help deflate the district’s overblown deficit. To Niklaus, the move shows that the government is finally recognizing that there is a significant amount of general funds that go toward special education. In Annandale, that amount is about $1 million a year. "We’re disappointed that the full $220,000 isn’t available for general expenditures given the fact that the cross subsidy is so high," he said. The outlook may change, however, as the education department looks more closely at the stimulus bill. They will be going to the feds in search of clarification shortly with the hopes of having more answers for school districts in the coming weeks. Annandale officials are holding out hope that the the entire $222,000 will be made available for them to use to combat the deficit. But if the department’s interpretation is correct, not only will the district be able to use only half of the special ed allowance for general items the first year, the following year the entire $222,000 allocation will have to go toward special education programs. The other benefit of the stimulus bill will be to the general funding formula. No new state money Although Niklaus doesn’t expect any new money from the state, the federal funds will prevent schools from enduring the cuts other state funded organizations are looking at as Minnesota tries to balance a more than $5 billion deficit. Here’s how it looks: The federal government has stipulated that states must use their allocation of stimulus money to first restore funding to K-12 schools in 2009, 2010 and 2011 to what it was in 2008 or 2009. States must also hold funding to post-secondary schools constant. According to Niklaus, the governor’s budget proposed to cut about $350 million from higher education. "If you figure that’s how much the state will need of the stimulus money to keep post-secondary education constant, that leaves about $667 million left for K-12 schools," he said. Once the state fulfills those stipulations any money left over can be put toward facility projects. "The state will know in March how far that amount will take them and how much will be left for facilities," Niklaus said. "I don’t think there will be a lot left. I think the requests will far exceed the funds." If Annandale were to get some leftover stimulus money for facility projects, it could only be used for remodeling, no new construction. While the state figures out exactly what the stimulus bill means for public education, the Annandale School Board will be thinking about how it is going to take care of its own financial crisis. The discussion at the regular board meeting Monday, Feb. 23, was about how much the board should cut and how much of a deficit to leave for the following year. "I really think we are going to have to do some deficit spending, but we’ll have to be careful," Niklaus told the board. The consensus board members eventually arrived at was to eliminate about $600,000 worth of programs and positions. That would leave a close to $320,000 deficit for fiscal year 2011. The board will officially make those cuts at their Thursday, March 26, regular meeting. The board also expressed a willingness to dip into the fund balance to "soften the landing" even further, Niklaus said. That amount, members agreed, should be somewhere between $320,000 and $350,000. Hit list The programs high up on the 36-item list will likely be the first to go. The first item takes away $24,000 for staff development at the three schools. The elimination of one wrestling coach, danceline, the middle school golf program, pep band and a speech coach are numbers 8-12. One full-time secretary, the head custodian at AMS, three elementary, three middle school and two high school teachers are also on the list. "The problem with cutting a significant amount means cutting people," board member Mike Dougherty said. Chairwoman Mary Barkley Brown requested that the elimination of a fourth- and a third-grade section, which would result in the loss of two of the elementary teachers, be moved further down on the list. The elimination of a second-grade section, resulting in the third teacher cut, is third from the bottom of the list.
