By Joanna Miller

Staff Writer

Prior Lake-Savage Area School Board members have asked residents to look to St. Paul for answers after a local budget crunch.

An education funding bill that passed in the House 119 to 13 and has moved on to the Senate and Gov. Tim Pawlenty raises local funding questions.

But Director of Business Affairs Margo Nash said she must develop a budget long before legislators conclude their session.

“They’re going into conference committee, and the numbers are changing,” Nash said.

Nash used an averaged estimate of a 2.3-percent increase to the general education formula to create the budget that recently cut nearly $1.6 million.

Depending on who wins out at the Capitol, the district could gain funds or wind up short-changed.

The House bill asks for a 3-percent increase in base funding, which would allot an additional .7 percent locally, or a $275,000 increase from the estimate.

The Senate and Pawlenty’s versions call for a 2-percent increase, which would leave the local budget .3 percent short, or $120,000.

However, the governor’s version adds back an additional 2 percent to the basic formula for two years as an incentive for schools meeting three or more stars on their annual report cards; Prior Lake-Savage Area schools meet this standard.

The 4-percent increase allows for an additional $670,000 above the district’s projection, Nash said.

Board Member Sue Bruns explained that budgeting for education in recent years has resulted in less of an increase to the general education fund and more money allotted for sub-categories, such as special education funding. Bruns has presented information to Parent Teacher Committees so parents can understand the issue.

The problem? Not all of the categorical funds apply to programs in Prior Lake-Savage Area schools.

“Obviously, the basic formula is something we’re watching,” Bruns said. “If the governor’s budget comes in at 2 percent, we’re already behind.”

An organization called PS Minnesota is leading research to update the budgeting process, she said, which is supported in both the House and Senate proposals.

Bruns said the governor’s plan to reward star schools has been controversial.

“To reward successful schools when there are struggling school districts doesn’t make sense,” Bruns said.

The categorical items that could aid the district in this biennium include a provision for all-day kindergarten in the House version that would add approximately $94 million beginning in the 2009 funding year.

That is not enough to completely fund all-day kindergarten, Superintendent Tom Westerhaus said. The board would decide how to use additional funds with the current program.

“We’d have time to sort that out next year,” Westerhaus said.

Special education dollars could help the district under all versions of the budget.

The governor’s version would increase the special education basic formula by 2 percent and change its reimbursement schedule to the current year.

“We have been falling behind,” Bruns said.

The House would raise the state-wide capped appropriation from $529 million to $572 million in the 2008 funding year and up to $573 million in 2009, along with changing the reimbursement.

The Senate version would fund the existing formula, restore a 4.6-percent growth factor and change reimbursements to the current year.

Westerhaus said any additional special education funds mean using less money from the general fund to offer current programming.

The School Board indicated that additional funds would be applied toward class-size reduction, he added.

Potential property-tax relief for residents would assist the district as it looks at a bond referendum and an operating levy referendum this fall.

While a shift in equalization wouldn’t increase funding to the schools, it would change the ratio between state and tax funds.

“I’m really hoping for property-tax relief, either through debt service or equalization,” Westerhaus said.

As far as reducing taxes through equalization, Bruns said there may not be a large impact in the district.

“Because of our home values, we’re not a big winner. We don’t really qualify for a lot of these dollars,” she said.

Any funding for the International Baccalaureate program, suggested only in the governor’s budget at an additional $6 million over the biennium, would be used for training, Westerhaus said.

For now, the board will await the final numbers to be passed down from the Capitol.

“Where it all shakes out is anyone’s guess,” Bruns said. “Both the House and Senate bills require a tax increase, and we already know the governor is going to veto it. The question becomes, ‘What’s going to be in the second bill?’”

 Joanna Miller can be reached at (952) 345-6375 or jmiller@swpub.com.