The news seems to get worse and worse for school districts across the state. In addition to major budget reductions, school districts face the possibility of losing hundreds of thousands of dollars if Gov. Tim Pawlenty's two-year budget proposal is approved as is.
In the governor's proposal, the training and experience revenue, a component to the general education revenue formula, would be eliminated. The T&E component is a state-assigned index that reflects the experience level and education training level of teachers in the district. School districts with more costly teacher compensation costs have received additional revenue to offset the unequalizing financial effect caused by having a high T&E index.
Revenue takes into account the index and the adjusted student enrollment.
No district would lose money with the elimination of T&E, but it would mean that the Hastings school district would not receive an estimated $460,000 next year under Pawlenty's plan.
"Hastings will be the 12th-largest loser when it comes to total revenue loss out of 343 districts," said Michael Pieper, ISD 200 director of business affairs.
"(Teachers) don't move from Hastings, and they continue to build on their education, which increases their salary schedule," said ISD 200 board member and Minnesota School Board Association president Don May. "We have always rewarded that and encouraged that.
"I've always felt that this is one of the most equitable formulas there is," May added.
Pieper said the district's teachers average 17.1 years of experience, 3.4 more years than the state average, with 71 percent of them holding master's degrees, which is 30 percent above the state average.
Pieper said there could be a five-year reprieve if another part of Pawlenty's plan is also approved. The proposed Transitional Pupil Aid plan would help school districts ease into the loss of revenue by initiating an equalized levy to help districts raise enough money to make up for the loss of T&E revenue. That would help school districts through 2009, but after that, a continuation of the levy would have to be approved by voters.
"Either way, we stand to lose $460,000 within five years," Pieper said.
May said the district's T&E index may go down five years from now, as several teachers would be eligible for retirement, but there are no guarantees, especially taking into account possible pay freezes and other factors affecting salary and retirement benefits, that those teachers will retire.
Pieper added said the district's fear is that the T&E reduction will pass but not the transitional aid.
"The problem is that (legislators) can do away with the T&E, but they don't have to approve the other," he said. "It wouldn't be the first time (the state) has made a list of cuts and a mechanism to work it out also put in and then not pass the mechanism."
May said he will approach legislators about keeping the phase-out mechanism in the state's final budget.
"We have been prepared for a phasing out of the T&E, but the governor plans to accelerate it," he said. "The budget recommendations made Tuesday didn't factor in the loss of T&E."
Pieper said he urges the community to talk to local legislators about the issue.
"We need to at least get the transitional aid component through," Pieper said.