Column: Fiscal prudence sets stage for referendumAs members of this community, school board and finance committee, we understand that the district needs to manage its finances in a judicious and prudent manner.
By: Paul Kramp and David Jonas, Red Wing, The Republican Eagle
As members of this community, school board and finance committee, we understand that the district needs to manage its finances in a judicious and prudent manner.
We believe that significant progress has been made in overall financial management with controls and processes put in place over the last few years. Accountability, expense control, and expenditure justification is and will continue to be the expectation. The financial situation currently facing the Red Wing School District is the result of events that occurred over a long period of time.
A summary of the facts as it relates to what lead up to this referendum vote are outlined as follows:
1. In 2003, the district received $6,075 per pupil in General Education Aid (the biggest share of funding). With a 3 percent inflation assumption, this would equate to $6,987 per pupil five years later.
Instead, we are receiving $6,286 per pupil, a revenue shortfall of approximately $700 per student.
The district has annually used budget cuts to attempt to close the gap.
We also note that many of the mandated/required programs receive only partial state or federal funding which continue to decline; in some cases, the district share has tripled since the late 1990s. Two federal title programs were eliminated this year, and several others reduced.
2. Unlike other local governments, the district has no discretionary levy authority; its levy and revenue are calculated by the state.
The district has sought to live within a budget that averaged 0.69 percent growth per pupil over the last five years for general education revenues. Inflation during this period has averaged approximately 3 percent per year, with utilities and fuel much higher.
3. The district’s class size is already as many as five students over the neighboring districts’ average; further cuts only increase the negative effect on education.
School operations have become more efficient: we have closed schools, eliminated programs and reorganized administration and downsized our teaching staff. The district’s finance department over the last few years has done a good job of matching its spending with its revenue.
The results of these initiatives are as follows:
A. District administrative expenses were 5.3 percent of revenues in 1997 (state average 4.2 percent); they are now 3.9 percent (state average 4.1 percent). Red Wing ranks 226th out of 336 districts.
B. The district property tax levy was $14.7 million in 2001. It was $7.4 million in 2008.
Though this was created by the tax reform of 2001, it illustrates the reduced impact the school has on the local taxpayer.
C. The district refinanced loans and reduced the property tax levy by $100,000 this past year.
D. Over the last five years, the district has cut $2,975,000 from its general operating budget (partly to reduce operating debt from prior years and to attempt to balance budgets).
E. The district negotiated a 2 percent salary increase for 2007-08 and a 0 percent salary increase for 2008-09 for our teachers (our largest group) and administrators.
Mandates and requirements such as No Child Left Behind are increasing, so we are being told to do more with less. Student achievement has shown improvement over the last couple of years and we cannot afford to jeopardize our future and the positive results we have accomplished in keeping the Red Wing School District a quality educational institution that instills community pride.
Since our current referendum is expiring, a failure to replace it by a positive vote will result in the loss of $2.1 million in revenues, potentially the equivalent of 20 percent of our teaching staff.
As community members, parents and property owners, we believe the choice is clear. Vote Yes for both questions 1 and 2 on Sept. 9.
Paul Kramp is chairman Red Wing School Board and member of the district’s finance committee.
David Jonas is Red Wing School Board treasurer and chairman of the district’s finance committee.