Lakeville Area School District voters can plan on deciding the fate of a school levy referendum this fall, but even if it passes the district will face cuts.
New projections show the district will need $3.1 million to $3.5 million in cuts for the 2013-14 budget to maintain operations, about $1 million more than first discussed last November.
A public process is being planned to receive feedback on the cuts, which will likely be considered by the School Board in March.
Business Services Director Randy Anderson, on the job for about a month, said the change in district finances is due to a variety of factors including rising health insurance costs from the Affordable Care Act, funding cuts and declining enrollment of about 200 students per year.
That level of declining enrollment costs the district about $1 million annually, Anderson said, and he reviewed birth rates that show the district’s shrinking student population will be an ongoing trend.
“If (voters) pass a levy at about $500 per pupil, which is about the tolerance level in the last community survey, we would be able to balance our budget for 2014-15,” said School District Superintendent Lisa Snyder. “But because of declining enrollment, we’d be looking at going into a cycle of annual reductions of around the $1 million to $1.5 million range starting in 2015-16.”
If Gov. Mark Dayton’s proposal to tax services is passed by the Legislature, Anderson estimated the tax would cost the district another $100,000 annually.
The levy referendum can help the district avoid an additional $6 million to $7 million in reductions in 2014-15, Snyder said.
School Board members expressed frustration about the budget challenges at a Feb. 8 workshop.
“I’m tired of cutting,” School Board Member Jim Skelly said, noting the district’s controversial 2011 action that cut $15.8 million over two years and closed Crystal Lake Elementary School.
He asked if the district could tap into its fund balance to help buffer cuts.
Anderson advised against the idea, noting the district has about two weeks of operating expenses in the account, less than half of the average amount kept by most Minnesota districts, and cutting it could threaten district operations.
Snyder said the district will work with stakeholders to define a proposal for cutting $3.5 million from the budget, and determine a public process that may include community listening sessions.
She encouraged the decisions to be made by March because of the impact they will have on district staffing and on people’s lives.