For the past several months, the administration of Wayzata Public Schools has been examining the possible impact of the stateâ€™s deficit on the districtâ€™s budget. While final details will not be available until the Legislature finishes its work later this spring, the administration has been exploring several potential budget scenarios for planning purposes. These scenarios will help our district to be better prepared to respond to legislative decisions that will affect our budget.
The stateâ€™s most recent budget forecast, which was released in early March, now shows the stateâ€™s budget deficit at $4.5 billion compared to the December forecast that estimated a $4.8 billion deficit. The March forecast includes revenue that Minnesota will receive as part of the federal stimulus package, which is why the estimated deficit decreased slightly. Without this revenue, the stateâ€™s budget deficit would have been projected at about $6.4 billion.
Using a â€œzero percent increaseâ€ or funding freeze scenario, Wayzata Public Schools is projecting a budget gap between revenue and expenditures of about $2.1 million for the 2009-2010 school year. To address this budget gap, the district administration has recommended that the board adopt the following budget adjustments for next year:
* Reduce OPEB (Other Post Employment Benefits) contribution â€“ $1.5 million
* Transfer funds from the OPEB trust to the general fund â€“ $630,000
* (See the Board Chair column on page 2 for more information about the OPEB contribution).
* TOTAL â€“ $2,130,000
These budget adjustments will balance the 2009-2010 budget assuming that the state does not reduce funding to the district.
Along with the â€œzero percent increaseâ€ or funding freeze scenario, the district has developed scenarios based on potential reductions in K-12 funding from the state. The recommendations below do not include any changes in programs for students or class sizes for the 2009-2010 school year. The following are the recommended budget adjustments if state funding is reduced by one percent:
* Budget adjustments included in the previous scenario â€“ $2,130,000
* Special education funding from federal stimulus dollars â€“ $500,000
* TOTAL â€“ $2,630,000
The following are the recommended budget adjustments if state funding is reduced by two percent:
* Budget adjustments included in the previous scenarios â€“ $2,630,000
* Reduce contribution to severance fund â€“ $400,000
* Shift cost of bus garage lease to capital fund â€“ $170,000
* TOTAL â€“ $3,200,000
The following are the recommended budget adjustments if state funding is reduced by three percent:
* Budget adjustments included in the previous scenarios â€“ $3,200,000
* Use funds that were previously transferred from the capital fund to the general fund â€“ $600,000
* TOTAL â€“ $3,800,000
The following are the recommended budget adjustments if state funding is reduced by four percent:
* Budget adjustments included in the previous scenarios â€“ $3,800,000
* Reduce building supply allocations for all district schools â€“ $600,000
* TOTAL â€“ $4,400,000
If state funding is reduced by five percent or more, district administration will recommend that money from the unreserved fund balance be used. The final impact on the districtâ€™s funding for 2009-2010 and 2010-2011 will not be known until the Legislature concludes its work in late spring.
The budget outlook for the 2010-2011 school year depends greatly on the outcome of the 2009 legislative session. A funding freeze or reduction will affect the amount of the districtâ€™s budget gap. However, using a zero percent or funding freeze scenario, the district is anticipating a budget gap of about $3 million for 2010-2011. This is an estimated amount and could be larger if state funding is decreased. The administration will continue to closely monitor the work of the legislature in the coming months. Once we know what the funding levels will be for 2010-2011, plans will be developed to make any necessary budget adjustments. Additional information will be shared in future editions of â€œDollars and Sense,â€ in the Communicator newsletter and on the districtâ€™s Web site.
The district has created a new publication, â€œDollars and Sense,â€ to share information about budget issues and the impact of legislative activity on the district. Two editions of the publication are posted on the districtâ€™s Web site at www.wayzata.k12.mn.us. The â€œDollars and Senseâ€ link is located on the right side of the front page. You can also request a print version of the editions by calling the districtâ€™s communication office at 763-745-5017.