District 88

prepares

budget for

next year

Budget is

smaller by

$1 million

By KREMENA TODOROVA

Journal Staff Writer

NEW ULM -- As the budgetary process draws to a close at District 88, budget numbers for the fiscal year 2005 look smaller than last year's -- practically across the board.

Last week, Business Manager Donna Luhring began the presentation of the 2005 budget; the school board is scheduled to resume a detailed discussion of it at a special meeting June 21.

The draft presented by Luhring puts the 2005 revenues at approximately $21.2 million, down from approximately $22.2 million in 2004.

Expenditures are projected at approximately $22.2 million, down from approximately $23.3 million in 2004.

The nearly $1 million dollar "deficit" in next year's budget is expected to be covered with reserves, says Luhring. Like other districts in the state, New Ulm is spending down reserves because of cuts in state education funding, according to officials. Legislators last year "froze" basic per-pupil funding at current levels, forgoing any inflation adjustments; they also cut funding for "non-core" programs.

As of June 2003, the last time an audit was completed, the local district's reserves were about $3.3 million. The current number, to be announced after a pending completion of this year's audit, could be as much as $1 million lower.

Factors reflected in

the 2005 budget:

The revenues in the 2005 budget are based on enrollment projections for next year, says Luhring. In 2004, the school district budgeted for 2,431 students; in 2005, it is budgeting for 2,321 students.

(The actual number of students in 2004 was 2,334. All enrollment numbers quoted here include students at sites other than public schools -- but funded through the public school system -- the RiverBend Area Learning Center, the Juvenile Detention Center, post-secondary options, etc.)

An "alternative facility" levy that was reflected in the 2004 budget explains $685,000 of the budget change, says Luhring. (This money was borrowed last year for projects related to improving air quality and will be paid back by the tax payers over the next ten years). The rest of the difference from the 2004 budget is due to reductions, on balance, in both revenues and spending.

Luhring also lists several specific factors reflected in the 2005 budget:

* Spending on substitute teachers is being held down -- substitute teacher costs for the elementary schools are being reduced, while costs for the middle school and high school are being held at a constant level.

* No dollars are budgeted for so called "lane changes" -- length-of-service-based promotions given to teaching staff.

* Computer repair revenues are being increased slightly.

* Juvenile Detention Center revenues are being reduced based on usage patterns.

* Interest revenue is showing a decrease due to a continued interest rate decline and also less money to invest.

A look at some of the changes in spending:

Despite roughly 3 to 4 percent increases in salary and benefit costs that resulted from negotiations with several employee groups, the district's budget for salaries next year is projected to decrease to approximately $10.95 million, from $11.04 million.

This reduction, of approximately $88,000, is a result of job cuts and realignments (mostly non-replacement of retiring staff) and charging parts of some salaries to Food and Community Funds (the latter accounting for an overall $12,000-$15,000 in savings, according to Luhring).

The budget for benefits will be up from about $3.36 million to about $3.4 million, a difference of $41,500.

In other spending categories:

* The budget for "purchased services" and transportation is being cut by about $250,000, to $4.3 million.

* The budget for supplies and materials is down some $164,000, to around $695,000. The budget for textbooks is being reduced by $75,000.

* The equipment budget is being cut by $37,000, to $538,000.

* The dues and memberships budget is being reduced by $4,700, to $48,000.

* Expenditures are projected to increase in: food service (by $17,000, to $640,000), community service (by $28,000 to $715,000) and debt service (by $53,000 to $899,000).