People voting at New Richland High School,

306 Ash Ave. S.:

Bath Township

Byron Township

New Richland

Freeborn Township

Hartland

Hartland Township

New Richland Township

Otisco Township

Wilton Township

People voting at Ellendale Elementary School, 600 School St.:

Berlin Township

Ellendale

Geneva

Geneva Township

Lemond Township

Sommerset Township

Summit Township

Boiled down, three factors go into funding public schools in Minnesota.

First, the state — via the legislative process — decides how much money it wants to set aside for education. That number is then divided by the number of public school pupils in the state.

Each district at the end of the legislative sessions receives a base amount of money from the state by taking the amount per pupil the state sets and then multiplies that number by the number of pupils in the district. That is why decreasing enrollment harms a district’s budget and increasing enrollment bolsters it.

In Minnesota this year each district gets $5,124 per pupil from the state for basic education funding.

The second factor is categorical aid for districts with special education, English-language learners and free-and-reduced-lunch students. Students who receive free or reduced-price lunches are from low-income families.

Funding for categorical aid comes mostly from the state, but some federal money can be had, too. Districts that experience sparsity, those with a large geographical area but few students, also receive categorical aid.

This amount, based on the number of students who are eligible for categorical aid, comes on top of the base per pupil amount districts receive.

The third factor is excess levy funding. “Excess” is not an apt term anymore because they are being used for what many consider basic needs; nonetheless, the word helps identify their original purpose. People often just call them “local” levies now. The levies are broken into two categories: operating and bond. Bond levies are used for capital improvements, such as a new school or building upgrades. Operating levies are used for day-to-day operations.

Add the three factors and that’s a school district’s revenue.

The notorious inequality that happens between outstate schools and those in the metro suburbs comes from the levies portion.

The ballot only will ask one yes or no question, but New Richland-Hartland-Ellendale-Geneva School District officials want the public to know the issue isn’t that simple.

People in the NRHEG School District will vote on an operating levy of $450 per pupil on Nov. 3. The levy, if approved, would go toward operating costs and allow the school district to stop draining the funds in its bank account.

“If it passes, we’re going to build our fund balance back up and maintain programs,” Superintendent Kevin Wellen said. “If it doesn’t pass, we’re going to look at our budget and try to balance our budget for the coming year. We haven’t picked things and said, ‘We’re going to reduce this, we’re going to reduce that, if it doesn’t go.’”

It’s likely the district would need to cut programs if the levy doesn’t pass, but Wellen said the district and the school board aren’t going to list the potential programs that could be affected.

“It’s not a ‘Do this or else.’ It’s a ‘We need this.’ It’ll let us maintain what we’re doing and get back to a financial stability that we and our auditors feel comfortable with. That’s what it is, and if it doesn’t pass it’s going to be sharpen our pencils and see what we can do,” he added.

The school board has hosted two information sessions at each of the schools and mailed newsletters to the public.

“We’re really working hard at the communication end of things to make sure there isn’t any confusion. We want people to be informed, and we want them to vote,” Wellen said.

Deferrals

While the school essentially received the same amount of funding, the state government frequently defers payment to the next fiscal year. Typically 10 percent is deferred, but Wellen said 27 percent of the state funds were deferred this year, which he said is close to $1.5 million.

The amount of money received from the state government lowered, and the federal government made up the cost through the federal stimulus package.

“Just because we don’t get any more revenue doesn’t mean the cost of doing business doesn’t go up,” Wellen said. “We still have heating. We still have facilities to maintain.”

The district planned and was able to adjust for the zero increase for the 2009-10 school year. However, Wellen said the district doesn’t anticipate any additional funding for the 2010-11 school year.

The revenue for the potential levy would start coming during the next tax year.

According to Wellen, the district’s fund balance has been spent down by about $800,000 since the 2003-04 school year. The district has reduced expenditures by $670,000 a year, largely through staff reductions, including eight teaching positions, 1 1/2 administrative positions and one clerical position. The district also has 41 fewer students.

Reducing expenditures any more is difficult because Wellen said 80 to 85 percent of expenditures are tied to salaries.

Enrollment in NRHEG is expected to decrease by 10 to 15 students a year. The district has also taken steps to reduce expenditures. The district is choosing to overspend by $70,000 to maintain programs. The district also pre-bought diesel at a flat rate over the winter to save the money of fuel increases. Wellen said that could save $10,000.

The district also drilled for a well to save on watering costs. Wellen said that well will pay for itself in two years.

The levy

Unlike many other districts, NRHEG has not had to borrow any money.

A $450 levy in New Richland will generate $464,000 a year. Of that, $290,000 will come from the local property taxes and $174,000 will come from state funds.

The tax increase would be about $94 a year on a $100,000 home — about $8 a month, Wellen said. A $50,000 home would pay half that and a $200,000 home would pay double, he added.

The tax doesn’t apply to agricultural land, except for the house, garage and the first acre. Farmers will not pay additional taxes on their other farmland.

When the area schools consolidated to form the NRHEG School District, the taxes remained under the old district system, meaning the different towns paid the taxes on their own school buildings, Wellen said. For example, Geneva residents have been paying the tax on the Geneva school building, even though it’s no longer a school.

The tax for the former New Richland-Hartland district is scheduled to end this year, and many of the other district taxes are scheduled to end soon, too. The taxes on the Ellendale building will end in about five years.

Wellen said he doesn’t anticipate the consolidation will affect voting, as he believes the communities are unified for the district.

“You walk into the community and it’s not those people and those people. It’s, ‘This is our school,’” Wellen said.

Of the 336 school districts in Minnesota, 306 have existing levies from referendums. The state average is $714 per pupil. NRHEG is asking for $450 per pupil. United South Central has a referendum of $1,000 per pupil. Albert Lea’s is $962.41. The lowest in area is Kasson-Mantorville School District at $350 per pupil.

In Minnesota, 58 school districts are asking for voter levies in 2009. Ashby School District is asking for $1,400 per pupil.

Austin School District on Election Day will ask for a 10-year levy of $531 to replace a levy of $305. Blooming Prarie will ask for two levies, a 10-year one for $700 and a three-year one for $200. Blooming Prairie’s existing levy is $350.

Voting

The sample ballot reads, “Shall the increase in revenue proposed by the board of Independent School District 2168 NRHEG Public schools be approved?” Those who support the tax increase vote yes, and those who don’t support the increase vote no.

The school is running their own election, and the polls will be open from 7 a.m. to 8 p.m. Nov. 3 at Ellendale Elementary School and New Richland High School. Voters should check to see which location they vote at. Absentee ballots are also available. The application for an absentee ballot can be downloaded at www.sos.state.mn.us/docs/english_absentee_ballot_application.pdf.

Rather than paying extra for voting machines, the district decided to hand count the ballots. Unofficial results should be released late Nov. 3 with the county auditor combining the two locations and releasing the official results the next day.