News

Langdon Area Schools walks financial tightrope

The Langdon Area School (LAS) District has been walking a tightrope these last few years as the LAS board attempted to bring the interim fund into the state mandated amount and keep the school within the required mill levy minimum in order to maintain state funding. 

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Posted on 9/5/15

By Melissa Anderson

At the upcoming school tax levy meeting on September 14, the board will again be asking for a 12 percent increase which equates to just under $197,000. The board has asked for 12 percent increases every year, but the increases have not kept pace with the cost of running the school.

Over the last few years the school board has authorized the deficit spending in order to lower the interim fund amount to within the 45 percent  of the school budget that the North Dakota state legislature mandated all schools do.

“The state was saying if we are going to give you $2.2 million in payments, you shouldn’t be sitting on $1.5 million in your interim fund,” LAS board president Warren Jonasson explained.

This came on the heels of the state lowering the mill levies for the schools to function on. Over the years the LASD has lowered the mill levy for the district from 155 mills to 100 and most recently to 60 mills.

“The school had to swing down to 60 mills in order to slow down the accruement of funds. The last few years the school has deficit spent in order to decrease the interim fund,” Jonasson said.

“We took the additional 40 mills to keep from being penalized by the state or our local community would be funding the school 100 percent. We would not get any funding from the state,” Jonasson continued.

This decision to drastically lower the mills and also deficit spend has come to haunt the school board however.

“When we were at 100 mills we knew if we didn’t drop it, it was going to hurt us. Now that we are at 60 mills, it’s hurting us,” Jonasson said.

The school had to deficit spend the last few years in order to decrease the interim fund to the necessary 45 percent of the budget plus $20,000 that the state dictates. Currently, the interim fund sits at about 30 percent of what is needed to operate the school which is good as the state will further decrease the acceptable interim fund amount to 35 percent in 2017.

Now that the interim fund is where it needs to be, the school board has to increase the mill levy more than the 12 percent that North Dakota Century Code allows without a vote.

“The school can drop easily, but now the school must raise the mill levy faster than the state allows.

A 12 percent increase equates to roughly six and a half mills which is less than $197,000. The dollar amount that mills generate is tied to the land valuations. The land located in LASD has been valued at about $30 million but that valuation is set to increase. As that valuation goes up so to does the amount of one mill.

One mill generates about $30,000 at this time and the school needs an additional $300,000 a year in order to stop the deficit spending and balance the budget. This means that the school will be seeking additional mills to continue to operate at the level it currently is in the near future.

“Now that we are to the level the state wants us to be with the interim fund, we need to balance the budget, and in order to do that, we need to add additional mills,” Jonasson said.

The LASD has one of the lowest mill levy rates in the state and Jonasson notes that the school board has been actively monitoring the levy in attempts to keep the mill levy at the 60 mill mark. If the school goes lower than 60 mills they are penalized. Now that the values of land are increasing in the area, the school must raise the mill levy in order to both maintain that 60 mills and balance the budget.

“We need to maintain a mill levy above 60 mills so we don’t take a double hit when the state takes money,” Jonasson stated.

If the school does not get the needed additional mills, measures will have to be taken by the school board and the administration to cut costs. With only 15 percent of the budget actually having flexibility as the other 85 percent is salaries and benefits for the teaching staff, LASD will have to look very hard at where cuts can occur in order to keep the budget in the black.

“If we can’t get that mill levy increase like we need we are going to have to look at drastic cuts, whither it’s staff or programs,” Jonasson said.

While the first and foremost effort will be to maintain the quality education that Langdon offers it’s students the only major option is to consider decrease teaching staff, an option Jonasson is loath to do.

“The only way we’re going to decrease our expenses, is to cut staff and that would mean larger classroom sizes and/or less opportunity for elective classes. That’s what we will have to take a hard look at,” Jonasson stated.

“We either get the increase or have to make cuts someplace,” Jonasson continued.

The proposed increase to the mill levy would come down to a vote and would appear on the ballet next June when the school board election takes place.

“We have worked hard and this $300,000 would be invested directly into educating our youth and our growing enrollment. All we can do is inform the public and it will essentially come down to a vote,” Jonasson said.

The LAS board will be hosting a meeting to discuss the 12 percent tax increase on September 14 at 7 p.m. in the Langdon Area High School Library.