If the Gov. PawlentyÕs budget-balancing K12 education proposal is accepted, Pine River-Backus will accommodate delays in receiving state funding without having to borrow money.
Pine River-Backus School District has maintained a healthy fund balance and will use some of its reserves to cover monthly payments if the governor's budget-balancing K12 education proposal is accepted, according to PR-B's superintendent and business manager.
Other districts may have to take out loans to cover their daily operations.
The Legislative Advisory Commission will review the governor's recommendation of $1.2 million in deferred payments to school districts over fiscal years 2010-11.
School districts receive aid from the state in two installments. They typically received 90 percent of the state aid for use in the current fiscal year, and the remainder in the following fiscal year.
Pawlenty's plan is to alter the school payment schedule to 73 percent and 27 percent. So, as of June 30, 2010, districts will have been paid 73 percent of their aid payments for the 2009-10 school year. The final payment of 27 percent of their state aid will be received in October of 2010.
That proposal will result in reduced interest generated from district investments.
The governor also proposed an adjustment in schools' receipt of property tax payments, intending to save the state around $600,000 in expenditures.
School districts will recognize a portion of their property tax receipts from taxpayers in the district earlier than usual.
There will be a corresponding deferral in state aid payments of the same amount.
