Financial 'tough love' for schools

Thursday, August 7, 2008

For the first time ever, the State of Iowa has sent letters to 60 school districts that are in financial trouble, warning them to cut their budgets.

The State Board of Education has the authority under a new law to shut down schools for operating over budget.

The board has closed one district. In southern Iowa, the 120 students who attended the Russell school district will be in new schools this month.

The board has the authority to close school districts that have been over budget two years or more. Twenty-two districts are in danger of operating in a deficit for a second year this year. Fortunately, none of the school districts in the Chronicle Times coverage area are in this category.

Te nearest districts that have budget deficits for the second year are Okoboji, Spirit Lake and Sioux Center. Lawton-Bronson received a warning letter for this year's budget being in the red for the first year.

It would be easy to generalize that small districts are the only ones operating in the red, but according to state records, districts as large as Dubuque and Urbandale will have budget deficits for the 2009 fiscal year.

State records show 17 of Iowa's 364 districts overspent their budgets in the 2006-07 school year. Twenty-two were expected to overspend in 2007-08, and 60 are on the list for 2008-09.

Some say school districts haven't moved quickly enough. They note that school enrollments in many small districts are dropping but staff sizes haven't changed. Employee salaries make up about 80 percent of school budgets.

Education department officials say the letters are meant to be informational and non-threatening, but changes will need to be made in many districts.

It's a good thing that the state is watching the finances of all levels of government and that the State Board of Education has been empowered to close down schools that operate in deficit spending.