In response to budget cuts and education funding shifts, Wadena-Deer Creek schools will need to take out enormous loans to cover the cost of delayed aid, according to Wadena-Deer Creek Schools District 2155 Superintendent Virginia Dahlstrom.
Last year, WDC needed to take out a $1.225 million loan to cover operating expenses. Interest on that loan totaled $50,385. The governor’s enhanced shift for fiscal years 2009-10 will result in the district becoming obliged to take out a loan for an estimated $2.4 million, to cover additional revenue lost as a result of the governor’s additionally withheld state aid. Interest on the larger loan will equal the cost of one or more employees. In recent years, our district has cut its operating costs by six figures annually. The budget cut for the coming school year alone totals $790,000. However, even with extraordinary cost-cutting measures having been taken this year and in previous years, the increased withholding of state aid will be hard on our district.
While in 2009, the education funding shift was 90/10, this year the shift will rise to 73/27, meaning that for ever $100 in state funds to the district, the state will withhold $27 rather than $10.
But it’s not just the education shifts that are impacting the residents of Wadena. In the video below, Wadena Mayor Wayne Walden explains to the Make Minnesota Thrive Drive road team how LGA (local government aid) cuts affect the community he leads:
The Wadena Pioneer Journal reported that on July 22nd, the Wadena City Council approved a budget adjusted for the governor’s unallotment of $68,538 in LGA. In addition to the specific cuts mentioned by Mayor Walden in the video above, the Journal reports:
Major changes included cutting $60,000 for street overlay work, $7,500 for graveling and applying calcium chloride, and $7,000 in capital expenses for the parks, said City Administrator Brad Swenson. At a special meeting last Wednesday the council also approved other minor adjustments to get budgets closer to what’s actually happening this year. For example, fuel costs aren’t as much as what the city anticipated given last year’s prices, he said.
The city ended up with a balanced budget plus $95 for 2009, Swenson said.
It will be more difficult to accommodate the 2010 unallotment of $158,142, he said.