| State to delay payments to local school districts |
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 Along with 231 of the state’s 337 school districts throughout Minnesota, the three districts in Moose Lake, Barnum, and Willow River are bracing for an upcoming delay in state aid payments to schools that total $423 million. In a January 26 memo to affected school administrators, Department of Education Commissioner Alice Seagren outlined the estimated amount of state aid payments that will be delayed on March 15, March 30, and April 15. Moose Lake district will have $621,267 in payments delayed, Barnum will have $597,307 delayed, and Willow River will have $371,134 in payments delayed. While funds are expected to be restored to the schools on May 30, these delays are in addition to the $1.8 billion in state aid that Governor Tim Pawlenty postponed to schools in July of 2009 to help cure the state’s budget deficit. That aid has not yet been paid. Seagren’s memo explained that the cause for the delay stems from a never-before used statute that allows the state to modify the schools’ payment schedule to reduce the need for state short-term borrowing. According to the memo, “The state must first use its authority to delay state aid payments to school districts to the maximum extent allowable before engaging in state short-term borrowing.” The state is expected to have cash flow shortages from March through May, and state law requires the state to postpone payments to schools before borrowing money for state operating expenses. Delayed payments apply only to school districts with a significant net unreserved operating fund balance as of June 30, 2009, and which exceeds $700 per pupil unit. All three area school districts will have the maximum amount of payments delayed. The Moose Lake School Board first heard of the delayed payments conundrum at its regular January 19 board meeting, when business manager Linda Dahlman stated, “If the state takes away money, we could use aid anticipation or get a line of credit to cover potential losses.” Superintendent Tim Caroline noted the advantage to having a fund balance and said, “We’ve been very cautious and have prepared ourselves for unknown costs down the road.” However, he added, “We don’t know how bad it’s going to get.” The board is meeting for a working session on February 8 at 5:00 to discuss tactics in warding off financial stress. “We’re going to have to do something potentially,” said Caroline. Dahlman asserted that the state may have cash flow shortages in October or November, alluding that further delayed payments could come again as early as September.
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