Monday, July 23, 2012

Special Education Crisis Part II

I've begun a series of posts that summarize my comments to the Office of Legislative Auditor on how to address the crisis in special education finance.   My hope is that the OLA's focus on this problem will lead the legislature to make far-reaching and comprehensive revisions to the way in which Minnesota manages special education finance.   The crisis is indeed grave.  In the next biennium, many Minnesota school districts are staving off back breaking staffing and program cuts by running sizable operating budget deficits.   In my first post on special education, I explained that the total special education deficit for all school districts combined has risen from about$300 million to $700 million in the last decade.   The special education deficit is one of the primary causes of  the financial crisis in public education.   Solving that deficit should be among the primary objectives in the next legislative session.

A few examples will put the special education deficits of school districts in context. These examples show  that unless the State acts next year to provide substantial relief to school districts, school districts that run a deficit this year will be forced to make huge cuts, and that solving the special education deficit would allow school districts to avoid those cuts, provided that districts use that money to balance their budgets responsibly.  

  • Stillwater.  After implementing a series of major reductions over the past several years, the Stillwater school district is drawing from its unassigned fund balance by $5 million to keep from making further cuts.  That represents an operating deficit of approximately 6 percent  in 2013 on an $81 million budget.   Stillwater's adjusted net special education funding deficit is approximately $6.2 million as of 2011.  That means that if the State had fully funded Stillwater's $14 million special education budget last year, Stillwater could have balanced its budget this year, with room to spare.  
  • Lakeville. After implementing major spending cuts, Lakeville school district felt that it could not justify further cuts, and so adopted a budget that runs a $1.4 million dollar deficit.  Lakeville has a $9.4 million special education deficit. If the state had fully funded Lakeville's special education programs, Lakeville could roll back some of the prior year's cuts, and balance its budget with room to spare.  
  • White Bear Lake.  White Bear Lake has an $8 million unassigned fund balance for a $78 million general fund budget. It had budgeted a $4 million deficit in 2011-2012.  But,  White Bear Lake has an $8.2 million special education deficit.  If the State fully funded WBL's special education program, WBL could have balanced its budget with $4 million to spare.  
  • Osseo.  Osseo  shows a budget with $198 million in revenues.  Its budget projects  an $8 million deficit, even though it made $2,032,463 of staffing reductions to align with enrollment and the $1 million  reduction in programs and services. But  Osseo had a $9 million special education deficit, or about $900 per student.  If the State had fully funded Osseo's special education budget, Osseo could have balanced its budget and eliminated its program reductions.  
  • Roseville.  Roseville had a June 30, 2012 unassigned fund balance of $4.4 million (bolstered by $2 million in unexpected  special education revenues ) with general fund revenues of about $66-69 million.  Rosevill's budget overspends its revenues by about $3 million next year, lowering its fund balance to $1.4 million.  Roseville runs an annual special education deficit of about $6.6 million.   If the State fully funded Roseville's special education budget, Roseville could have balanced its budget with $3 million to spare. 
I'll have more to say about the special education crisis in my next posts.

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