Fiscal Cliff

The Fiscal Cliff is mentioned frequently in the news lately.  Currently this is a federal issue and our federal funding comprises about 2% of the Pine City School District budget.  That is about $281,000 for Pine City Schools.  In the case of public schools that would be a potential cut to students services such as Title I and Special Education dollars.

While federal funds may be withheld, the requirements to sustain a "maintenance of effort" will continue.  Basically this will expand the "unfunded" part of the Federal Government requirement.  Since we must provide adequate services to all students, the money will have to come from some where else.  Without Title Funding, Title positions would likely have to be reduced.  In the case of Special Education our hands are tied.  We are legally forced to comply with all Special Education requirements regardless of funding.

I continue to study the political and economic news to try to understand what is happening to our country.  Public Education is a major part of the state budget but it is not the ever growing expense that you might think.  Minnesota Public School funding increases, over the years, have fallen far below the cost of living.  We are currently $401 (per pupil) below funding rates compared to 2004-2005 school years.  The part of the state budget that has grown is in the area of health and human services.  Senator Tony Lourey is the chair of the health and human services committee.  He will face great challenges during the upcoming legislative session.

You will see that our property values are plummeting.  Banks are struggling.  Interest rates are amazingly low.  We are a nation that spends more than it takes in.  This is true as a country and it is true for individuals.  Do we reduce spending or increase revenue through taxation?  After WWII I have heard that the tax rates were extremely high.  The country came through those tough times.

The good news for Pine City Schools is that the over all local school levy has decreased by 6.68%.  This decrease is due to two factors.  First, we have significantly decreased property values and second we have refinanced our debt (refunding our bonds) to gain much lower interest rates.  This doesn't change the money the schools receive but it does lower local school taxes.

The "consensus" frame of mind is what we need.  The compromise is likely much less than we think in order to get back on track.  As our leaders struggle to correct our financial woes I hope that they can work for a collaborative solution since conflict and grid-lock accomplish nothing.  The average person struggles to see the solution.  We expect our elected officials to find that solution.  They have all the resources they need to figure this out.