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Local school budgets boosted by improvement in state’s economy

Minnesota’s economy is looking up, and so are local school budgets.

Recent tax collections have left Minnesota lawmakers with high hopes for the state’s economy.

With an extra $300 million, Minnesota’s strengthening economy appears to be pulling in money even before a $2.1 billion-tax increase goes into effect.

Many believe the state is on its best financial footing in years. With all this extra money, the state intends to replenish its reserves and repay the public schools.

The past few years have been hard on many institutions. The general payment shift originally consisted of the state paying 90 percent of the money it owed school districts, and paying then the other 10 percent later on the following year.

However, recent years led to schools only receiving 60 percent of the money owed right away and 40 percent later on.

Many schools were left short and forced to borrow using aid anticipation certificates or bonds.

Even though the state did eventually pay the 40 percent each year, it was too late for many institutions to make their monthly payments.

Fortunately Detroit Lakes’ public schools were not among them.

“It’s very emblematic of the financial health of the district that we never had to borrow through that rough time a few years ago,” said Superintendent Doug Froke.

The schools are now lawmaker’s No. 1 priority. By law, the state must pay back the 90/10 payment shift; if it is unable to do so, the second the economy improves they must raise it back up to 90/10 or as close to that as they possibly can.

However, in districts where the past few years were still successful, many would prefer payments in a different method.

 “One of the positions that was out there taken by superintendents is, if you (the state) have got $300 million, give it to us on the per student formula,” Froke said. “This gets more money (to districts).”

This ‘new’ money, as Froke called it, can be used for something other than paying the bills.

Although the issue of delayed payments has put school districts in the middle of legislative budget fights, Froke takes it all in stride.

“A person has to understand that K-12 education has become very political and we are at the mercy of the lawmakers in St. Paul … and that is what it is.”

Ultimately, this newfound money will benefit the students of DL public schools. “Everything we do, we do it in the best interests of the kids,” said Froke.

Article written by Haley Foster of Detroit Lakes Newspapers