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Legislators offer views on contract deadline penalty BRAINERD SCHOOL BOARD Staff Writer Brainerd School District officials provided two area state lawmakers with a laundry list of funding issues that affect the district, including the teacher contract settlement penalty, the state funding formulas and the state's recent decision to delay school district payments this spring.
Sen. Paul Koering, R-Fort Ripley, and Rep. John Ward, DFL-Brainerd, were guests Thursday of the Brainerd School Board Legislative Committee.
Superintendent Steve Razidlo told the lawmakers that some state education organizations are seeking legislative sponsors to attempt to rescind the state statute that penalized 25 Minnesota school districts when they didn't reach a settlement with teachers' unions by the Jan. 15 deadline. The penalty was $25 per student in state appropriations, or nearly $200,000 for the Brainerd district, which has yet to come to an agreement with Education Minnesota Brainerd for the 2009-11 contract.
Ward said he spoke to several Minnesota superintendents, asking them if they felt the penalty was fair. All of them said it was, that the deadline pressed them to reach settlements. He said he wasn't opposed to reviewing this statute or the possibility of a one-time reprieve from the penalty during these difficult financial times. But he said the law was implemented to get contracts done in a timely basis and cause fewer teachers' strikes, which it has accomplished, Ward said.
"Our major concern is that the law is so one-sided," Razidlo explained. "It penalized the district, but there's another side that is present at the negotiations table; it's the teachers' union. We would not like to suffer the penalty, but if the law could make it fair, we would support that as well."
"What about fairness for the folks in the Brainerd district?," added board member Jim Hunt. "Is there some balance there? If we're penalized $200,000, are you willing to go to the unions to say you need to pick up half of that? Is that a possibility?"
"I'm not going to be engaged in the negotiations process," Ward told him.
Board member Tom Haglin asked whether districts could have incentives to settle teachers' contracts by a deadline, rather than penalties on funds that districts are anticipating.
"We've talked about disparity and unfairness but I don't think there's a lot of unfairness between the union and administration," said Haglin. "The unfairness is for our students. Rather than have a penalty, which is an old school thought, instead think of an incentive-type approach. I agree there should be a time when you have to settle. In our own district this has dragged on way too long and the sentiment that goes along with it in our district is not good. ... Don't take away what we were already counting on, it's not a penalty to the district and the union, it's a penalty to the children."
Razidlo also discussed inequitable state funding that results between districts that can pass operating levies and those that can't, as well as districts that have a larger percentage of seasonal recreational properties like the Brainerd area that don't pay for these levies. He said he's heard that lawmakers may raise the local levy amount but that doesn't help districts that can't pass levies.
"We ask that you not raise the ceiling if you're not going to bring up the floor," said Razidlo.
Razidlo told lawmakers that districts like Brainerd pay an unequitable share of unreimbursed special education costs. During the 2008-09 school year, 17 percent of the district's students received special education services, or a total cost of $13.8 million. Of that, the district was not reimbursed by the state for $4.143 million of those mandated special education services, which had to be covered by the district's general fund. Razidlo said some districts only have 5 percent of its students receiving special education services.
"It's an unequitable burden," said Razidlo. "We know you're facing a shortfall but I hope if you pinch the formula, we won't be unfairly hit."
Steve Lund, director of business services, proposed that the kindergarten funding formula be increased from .612 per student to .75. He asked lawmakers if the state should be spending a little more than half on its youngest learners than it is spending on older students. The Brainerd district receives $3,136 per kindergartner, compared to $5,713 to educate a first- through third-grader, $5,431 for a fourth- through sixth-grader and $6,661 for a seventh- through 12th-grader.
The district has 524 kindergartners, which generated $1.643 million in per pupil funding this year for the district. With a small boost from .612 to .75 of the state funding formula for kindergartners, it could generate an extra $370,527 for the district for its kindergartners. Statewide, Lund said this would create an additional $43.8 million for districts.
Koering commended the school board for its hiring last year of Lund. He said he learned that the state has a person who monitors the state's cash flow balance on an hourly basis and asked if Lund does something like that. Lund said he and his staff do monitor its cash flow on a daily basis, but not hourly. Koering asked if the district would have to borrow any funds to pay its bills with the $1.7 million anticipated delay in state aid payments this spring.
Lund told Koering that instead of issuing a large aid anticipation bond, the district will go to a local bank and establish a line of credit in case the district has a cash need and use it when it's necessary. Koering said to meet its own cash flow needs, it was either up to the state to delay people's income tax refunds this spring or school district's state aid payments. He said after July 1, when the state needs to reimburse districts for those borrowed funds, it's only going to get worse for the state's cash flow problems.
Ward said the 1986 statute that Gov. Tim Pawlenty is using to delay school aid payments has never been used before. He asked how school officials felt about the repeal of this statute.
"If you gave me a choice to use my money for a period of time and give it back or a hard and fast cut, then I'd rather share our money with the state," said Lund.
Lund told lawmakers that they need to be cautious about jeopardizing the state's credit rating, from which all school districts benefit.
JODIE TWEED may be reached at jodie.tweed@brainerddispatch.com or 855-5858.
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