School District to Lose Some State Money
Posted on: Thursday, 6 April 2006, 09:00 CDT
By Duluth News-Tribune, Minn.
Apr. 6--The Duluth school district will lose some state money because it has too much money in its community education fund, the Minnesota Department of Education reports.
"They'll have a one-time adjustment in that account, and if the balance is reduced next year, that will be that," department spokesman Doug Gray said.
Earlier this year, the state announced excess fund balance penalties totaling $1.27 million for school districts' community education, early childhood and family education, and school readiness programs statewide.
Duluth received an $87,792 penalty for having too much in its community education fund. Only Shakopee had a larger community education penalty: $88,173.
That penalty was the only one Duluth received. The Hermantown, Proctor and Cloquet school districts received no penalties in any of the categories.
"It does hurt," said Dave Muckala, Duluth Community Education director. "That's for sure. But it wasn't unexpected. It's actually the result of a huge fund balance we had years ago. We have been spending down, but our balance was so high that first year."
Several years ago, state lawmakers imposed a 25 percent limit on fund balances for early childhood money, said Lisa DeRemee, Department of Education financial specialist. During the 2003 state budget crisis, the governor extended the limit to community education funds. The maximum amount a district can have in a fund is determined using a three-year rolling average.
Because of the excess in the fund, Duluth will lose about $11,000 in state aid. The other $77,000 of the penalty will come as an adjustment on its property tax levy next year, DeRemee said.
Duluth's community education program has an annual budget of about $1.7 million.
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Source: Duluth News-Tribune (Duluth, Minn.)
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