by David Safier
It sounds like we're going to get some news soon about a budget deal between the Rs in the legislature and the Guv. One of their plans is simply stunning.
The plan would halt almost all of this month's scheduled payment of state aid for schools. Instead, schools would be told to either use cash on hand or, if necessary, borrow money to meet expenses.
That's the set-up, not the stunner. It's an accounting move to delay payments — a rollover, where you make the payment later. The short term problem for districts is, if they don't have cash balances, they'll have to borrow to meet expenses. When I think "borrow," I think "interest," which means districts will end up with even less of what they don't have enough of already.
I suppose they'll be able to find better short term rates than they'd get at the corner Payday Lender. That's some consolation.
This is the stunner. Let's say a district has maintained a cash balance, meaning it won't have to borrow to meet current expenses. Then it will never see that rollover payment.
Excess cash? So if a district decided to squeeze its budget early to ease next year's budget pain, it's too bad, Charlie. It will never see that money again. And if it's put away money against later payments — a standard procedure — it might not see that money again either.
This is a new wrinkle on the earlier, much maligned plan to take back all those "excess funds" the districts are supposedly hoarding, then redistribute them to other districts.
Did I just say "redistribute"? Where are McCain and Joe the Plumber when you need them?
Cutman, aka Russell Pearce, can always be counted on to give us the money quote at a time like this:
We're avoiding cuts by taking away districts' money, then giving it back to them and calling it new funds. I guess that's what passes for logic in these strange budget cutting days.
The most likely result of all these gimmicks will be increased local taxes in one form or another to replace the dollars the state is taking away. In other words, the state just pushes the funding problems downhill to the locals. Great.