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State deploys school dollars

ST. PAUL -- Minnesota schools may view the Legislature's education funding increase this year the way a lottery player would a modest winning -- they gladly will take it, but it won't dramatically alter their finances.

When lawmakers finished their work for the year, schools were given a small bump in state aid in a year when they had been warned not to expect any new state funds.

School officials say the one-time, $51-per-student increase to districts - equivalent to a 1 percent state aid increase - means some schools can hire teachers and staff, while others will use it to soften the blow of expected budget cuts.

Still other schools may use the money to buy classroom materials, and some might put it away for use in future years.

"Most districts have been cutting, and as a result what the money will do is either stave off cuts for one more year or they'll be used to preserve a program that's in place, but it's not a long-term solution," said Lee Warne, executive director of the Minnesota Rural Education Association.

Kindergarten-through-grade-12 schools were among only a few state budget areas that saw funding increases this year as Gov. Tim Pawlenty and lawmakers sought to fix a $935 million state budget deficit. Many state programs saw state aid taken away, including higher education.

"They got some money" is how Sen. Kathy Saltzman, DFL-Woodbury, described a legislative session that yielded a small funding increase but little else for public schools because there was no final deal on an education policy package.

Most districts already set their budgets for the 2008-09 academic year, so the funding boost comes after schools made cuts or used their reserves, said Charlie Kyte, executive director of the Minnesota Association of School Administrators.

He said schools probably will use the new state dollars to cover rising energy and fuel costs or restore teaching positions and programs they planned to eliminate.

"What this one-time money does is allow them in a number of small ways to add some pieces back," Kyte said.

Legislators also allowed districts with extra capital improvement funds to transfer those dollars into their operating accounts for classroom use. Districts can move up to $51 per student from the building improvement reserves to the general fund.

That gives districts some flexibility, said Rep. Dean Urdahl, R-Grove City, who said a superintendent from his area suggested districts be given that authority. "Some have them, some don't," Urdahl said of capital reserves.

Warne, whose group represents rural Minnesota schools, said if districts are planning long term, they should have extra capital funds they could use for classroom expenses.

But that one-time transfer may not mean new money for some districts, Kyte said, because many superintendents know how they legally can use capital funds for classroom purposes, such as buying textbooks. Kyte said he did not bring that up during the session because lawmakers were trying to help districts in a tough budget year.

Kyte said the reaction was mixed when he recently told school chiefs of that provision.

"They all kind of looked at each other and shrugged their shoulders because most of them knew how to do that already," he said.

While school districts saw a funding boost this year, higher education joined most of the state budget in seeing cuts. The University of Minnesota and Minnesota State Colleges and Universities each lost some of the state funds they were to receive.

Higher education leaders said they must make spending cuts as a result of trimmed state allocations, but they do not expect to raise student tuition higher than it was expected to increase. They said their systems overall did well this year because of lawmakers' earlier approval of state-borrowed funds for campus projects.

The MnSCU system, which lost 1 percent of its state funding because of budget cuts, will hold tuition increases next year to 2 percent at colleges and 3 percent at its universities.