BEMIDJI -- Starting off an unprecedented school year, Bemidji Area Schools will face more issues than just health and safety precautions as the district may soon also face a budget crisis.
Superintendent Tim Lutz recently announced he will be hosting virtual listening sessions with interested community members to inform them about the district’s financial situation and address concerns.
Now through August 13, parents of area students are encouraged to join Lutz for a conversation about the future of Bemidji Area Schools and learn more about the district’s finances and next steps, according to an announcement from the district earlier this week.
The sessions will be held several times each week through Google Meet video conferencing. During each session, Lutz will provide a brief presentation and offer time for parents, staff and community members to ask questions.
Lutz shared a budget presentation he said would be shared with community members at the last school board meeting on June 15. During that meeting, he voiced his concerns about the district’s current financial situation and argued for the passage of an operating referendum.
“Our goal is to be able to build on our successes,” he said. “A successful school system leads to a successful future for our community. The two go hand in hand.”
Lutz explained that funding for education comes from three sources -- state aid, federal aid and local funding.
Bemidji Area Schools currently are reliant on local funding for 12-13 % of operating costs. Federal funding covers around 6% and state aid covers the rest, but about 25% is designated for required purposes.
Lutz said that when inflation is factored in, state aid has effectively decreased over the last 14 years, because there has not been an increase of over 2% since 2007.
He also detailed specific challenges rural schools faced, which he said are not addressed adequately by state funding.
Currently, there is a gap between expenditures and revenue, and this is projected to widen significantly in future years. This gap must be paid out of the district’s reserve funds, he explained.
“If your expenditures outweigh your income, you are going to be in the red,” Lutz said. “Unless we can figure out something in our financial situation, it is simply going to get worse.”
The state will step in to require “drastic action” if the reserve were to be depleted and the district were to go into debt, Lutz explained.
COVID-19 has made the situation worse, he added.
He detailed a four-step plan to fix the problem:
- Work with legislators to increase state funding.
- Keep managing spending.
- Keep and attract students.
- Increase local operating levy.
There are both school board and voter-approved levies -- currently, the district has a $724/pupil board-approved levy and a $180/pupil voter-approved levy, $904 in total.
The Bemidji Referendum Authority limit is capped at $1,779.50 per pupil.
Lutz said the district hopes to repeal the $180 levy and replace it with a $460 levy, which is a $280 net increase. This would reduce the projected deficit by 72%, he said.
The board will make a final decision on whether to put the operating levy to a vote in August, it would appear on the ballot in November.
“Over the last several weeks, I have enjoyed hearing feedback from our devoted family of teachers and staff,” said Lutz in the announcement earlier this week. “Now, it’s time for our entire community to weigh in to ensure that ISD 31 will be able to provide each student with an equitable education.”
More information, including the specific dates and times of each session, will be shared on the district’s Facebook page and through parent email updates.