Metro schools survey: Nearly two-thirds will borrow to cover costs

More than 60 percent of metro-area school districts surveyed will be forced into short-term borrowing to meet their financial obligations this school year, according to new findings from the Association of Metropolitan School Districts.

The survey (pdf) found that 24 of the 46 districts polled by the association will need to borrow, a significant increase over the 15 districts that borrowed last year, the AMSD says. It’s projected that districts will need to borrow $382 million with interest costs of $3 million this school year.

The ASMD release doesn’t mince words when it comes to the reason for the  borrowing: “The increase in the number of districts borrowing is a reflection of the education bill approved during the July special session, which increased the education aid payment shift to an unprecedented 60/40 payment schedule.”

“While the governor and legislators went to great lengths to protect education funding in the face of a $5 billion budget shortfall last session,” AMSD Executive Director Scott Croonquist said in a statement, “the reality is that most school districts continue to face significant budget challenges.”

In backing up that assertion, the AMSD notes districts have reduced their budget reserves by $55 million and enacted $61 million in cuts for the 2011-12 school year. Those moves included over 600 staff positions lost, including 437 that were licensed staff.

The AMSD report comes on the heels of a November election that saw a near-record of school district levies proposed across the state. Nearly three-fourths of those passed. The report, and those increasing levies, have increasingly become a political football for both Republicans and DFLers at the Capitol. Both parties have voted for K-12 funding shifts in the past, but neither wants to be saddled with the blame for ensuing local tax hikes or school cutbacks.

DFLers and some local officials have blamed years of stagnant funding for increasing levies and borrowing on the part of school districts. Republicans, for their part, have pointed to modest increases in K-12 funding and said tax and spending decisions are made locally, not in St. Paul.