ASBSD Executive Director Wayne Lueders issued the following statement regarding Gov. Dennis Daugaard�s FY12 proposed budget.
�Gov. Daugaard�s $60 million proposed cut to K-12 education will be devastating to local school district budgets and will have an impact on the quality of education, our state�s economy and South Dakota�s local communities.
For years, local school board members and school administrators have been balancing tight budgets by finding efficiencies and making cuts that are least likely to impact classroom learning. If the governor�s recommended budget stands, many school leaders will find it impossible to maintain current educational programs, class sizes and staffing levels. In a state where 25 percent of public school students are struggling in basic subjects like reading and math, we simply can�t afford to limit academic opportunities for South Dakota�s public school students.
The proposed cut will set school funding back six years. The abrupt change will challenge our state�s largest schools and overwhelm our smaller, rural schools, leading to discussions about property tax opt-outs and school closures across the state. Based on our state�s history of funding public schools, it could take the better part of a decade to restore K-12 funding to current levels.
ASBSD�s first concern is to esnure our state�s 124,000 public school students benefit from a healthy and strong public education system, but we believe it�s important that the public understands the severity of Gov. Daugaard�s proposed cuts. A $60 million cut is the equivalent of 1,550 full-time teachers, or approximately 16 percent of South Dakota�s teaching workforce. In the short-term, the positions public schools will be forced to cut will further hinder our state�s slowly recovering economy. And, because public education is at the foundation of economic prosperity, the state�s failure to invest in education will limit our state�s long-term economic recovery.
Comment on the comparisons of state reserves and school fund balances
�On behalf of the state�s school board members, ASBSD hopes to set the record straight on school district fund balances.
A school district�s general fund balance is not a reserve or a rainy-day fund as Gov. Daugaard suggested today. A general fund balance is a measure of cash on hand at the end of a district�s fiscal year. While it�s true that some cash on hand may be designated as a reserve, the amount also includes money that is obligated for future expenses. For schools, a general fund balance must act as both a checking and savings account.
By comparison, the state has several separate accounts that act as cash-flow and reserve accounts. The state�s Cash Flow Fund, which has an average monthly balance in excess of $1 billion, acts as the state�s checking account. A combination of reserve and trust funds, which total more than $785 million, act as state savings accounts.
When our state�s governor uses the terms general fund balance and reserve interchangeably, it creates a false impression that schools are hoarding resources. While it�s true that school districts had $196 million in cash on hand at the end of last year, any suggestion that all those funds are available for a rainy day would be the same as saying the state has $1.8 billion, or nearly 85 percent of the state�s non-federal budget, to use for a rainy day.�