Late state aid puts districts in tight spot

? When state aid to schools was delayed in December, school officials were concerned. The second delay, late in the academic year, has districts in a pinch.

“We will be able to cover this month but will not have any cushion if it happens again,” Haven superintendent Jim Chadwick said Monday. “I suppose if it does, we will just have to put off payroll.”

The state is grappling with a projected $700 million shortfall between expenditures and expected revenue collections for the next 15 months, due partly to slower-than-expected tax collections.

In December, the state initially sent districts only 75 percent of their aid payments as revenue became tight. Districts said they managed by tapping reserve funds until the other 25 percent arrived late in the month, but many said the loss of interest earnings on idle funds would hurt their budgets.

On March 29, the state notified the 303 districts that they would receive only half of the $136 million April state aid payment. State officials now say the remaining $68 million may be delayed until May.

Many local school officials were likely to hear of the latest bad news during board of education meetings Monday night.

The state pays school districts $3,870 per pupil in aid, for a total of nearly $2.3 billion in the current fiscal year.

Sharon Zoellner, deputy superintendent in DeSoto, said because districts are near the end of the school year, they need timely state aid payments to meet their expenses.

In May and June, she said, her district’s payroll is larger than normal because of teachers’ summertime pay.

Mark Tallman, a lobbyist for the Kansas Association of School Boards, said the effect of the incomplete payments would vary among districts, including lost interest earnings on idle funds or delaying purchases of needed supplies.

Tallman said: “For a lot of districts, it will be a problem. Some will weather it easier than others,” Tallman said.

In Iola, superintendent Craig Neuenswander said the district will put off purchases to make payroll.

House and Senate negotiators are expected to finish work this week on a bill that making it easier for districts to use their contingency funds. The measure is intended to give districts greater discretion and free reserve dollars for classroom expenditures.

School districts are allowed to keep funds in restricted accounts for programs such as food service, transportation and special education. Many of those funds build up to cover shortfalls until state aid is paid to start the school year.

Tallman said the latest delay in state aid demonstrates why districts need money in restricted funds. Some legislators have suggested districts should tap into those funds to deal with locals budget problems.

Rep. John Ballou, R-Gardner, has said districts should be able to use the more than $620 million held in those accounts as the state resolves its budget problems.