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Funding glitch denies Manvel, N.D., school aid

Despite legislation that provides more funding for students in North Dakota, the Manvel School District is paying out of its own pocket to cover thousands of dollars lost in state aid.

Manvel, N.D.

Despite legislation that provides more funding for students in North Dakota, the Manvel School District is paying out of its own pocket to cover thousands of dollars lost in state aid.

The district's superintendent said the problem is that the state leaves the district's main budget needs out of the formula that determines school aid.

School districts educate students through their general fund, which is paid for by taxpayers through a mill levy. But because the Manvel district doesn't have a high school, the district must devote about 90 percent of its property tax revenue to the Grand Forks Public School District to educate its 65 high school students.

"Our tuition bill last year was about half a million dollars," said Superintendent Richard Ray.

This amount is listed under high school tuition, not the general fund, and the state funding formula, based in district general fund expenditures, doesn't recognize this expense. The state Department of Public Instruction only recognizes the school's general fund, he said.

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"They take it literally to mean only that (funding)," he said. "We find 90 percent goes into line No. 2, and they won't recognize that."

This is forcing the district to provide tax relief promised to residents on its own, but without the state money it should receive to buy down its tax levy, he said.

School board members will hold a public meeting at 7 p.m. on Thursday to debate whether they should not devote taxes for the school's building fund and use the money instead toward reducing taxes. A letter will be sent to residents stating the district must raise taxes by 50 percent.

One word

Legislators approved funding this year that would provide $8,810 per student in 2014 in tax relief.

But because of the state school funding formula, instead of receiving an anticipated 10 percent increase in state aid, the Manvel district is getting $135,238 less than it received last year, said Ray. Their district is one of the few in the state that are experiencing this, he said.

The district could have received an additional $300,000 if one word had been added last year to the legislation, he said.

If the phrase "combined general fund" was used rather than "general fund," the funding the district spent on high school students and transportation would have been included, he said. Without it, the law only recognizes money spent through the district's general fund, which is used to educate children only.

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After contacting State Superintendent Kirsten Baesler, Ray was told what happened to the district was unfortunate and not intended by the law. Still, the Department of Public Instruction is not given authority to determine the funding formula, she said.

"We are not allowed to correct errors that may have appeared in the law," Baesler wrote to him in an email. "That takes legislative action."

Ray said he's talked to legislators about this problem since 2006, when he testified to point out flaws he said are in the formula, and mentioned it again last year. He thinks it's possible that this was just an oversight that nobody caught, but this is also the third time it's happened in seven years, he said.

"This is not some mysterious thing that just popped up," he said.

Options

With nearly all of the school's funding absorbed by high school tuition and transportation, last year only 11.04 mills of a total 107.96 were left to educate 142 elementary students, said Ray.

The district has been able to educate its students on that and still remain financially sound, while also keeping up with standardized testing and offering a free preschool program, he said.

One option available to the district is consolidating with a larger district such as Grand Forks. But Ray said the district is resistant because many believe it would jeopardize its local elementary school.

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"If we were part of a big district, how long would that big district keep another tiny little elementary school going?" he said. "Our thinking is that as long as we're by ourselves, and as long as we're treated fairly, we can manage just fine. And we have been managing just fine."

The district has fought against consolidation for nearly 40 years because the community wants to keep a school there, he said.

"This fact is important because it explains the rationale for the series of funding challenges we have experienced since 2006," Ray said.

Although foregoing a levy to the school's building funds would only mean delaying window replacement, Ray said the problem remains that other districts are set to receive an increase in state aid while Manvel is receiving less. The fix won't a quick one, either, with a Legislature that is in session only every two years, he said.

"We have a structure that is so rigid, that when any little issue comes up, it can only be handled two years down the road," he said. "No business could possibly function that way."

Call Johnson at (701) 787-6736; (800) 477-6572, ext. 1736; or send e-mail to jjohnson@gfherald.com .

Related Topics: EDUCATION
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