What is the cause of New London-Spicer's Financial Challenges?

I have talked to several people in the community about the challenges facing our school district. Questions that continue to arise are: Can you simplify the challenges you face as a district? What is causing you to need additional revenue? Why is the New London-Spicer School District in this spot financially? The answers to these questions are related and a bit complicated. To simplify the complexities of our situation, I have organized the need into four general categories.

1. Funding from the state of Minnesota has not kept pace with inflation.

If state aid had increased at the rate of inflation, schools would have received $7,461 per student this year. Instead, schools will receive $6,863 per student, a difference of $598 per student. New London-Spicer has about 1,530 students. If state aid kept pace with inflation, that would result in nearly $1 million in additional state funding in one year, and many millions over previous years, eliminating the need for constant budget reductions.

2. The federal government has not kept their funding promises.

In 1975 the federal government passed the Individual with Disabilities Education Act (IDEA) which provides education and support services for students with disabilities. During that time, the federal government promised to provide 40% of the excess costs of providing these services. The federal government has not kept this promise as they have generally provided only 17% of these costs. This lack of promised support from the federal government has caused the district to spend an average of over $1 million annually from its general fund to supplement the rising costs in special education. These are critical services and the federal government must keep their promise.

3. Our school district falls into the "donut hole" as we are considered property rich but tax poor.

The New London-Spicer School District has a unique tax base. Specifically, our tax base is as follows:

Residential: 56.8%

Commercial/Industrial: 5.2%

Agricultural: 14.5%

Seasonal/Recreation: 23.5%

This means that our homeowners carry the greatest tax responsibility as some seasonal/recreation and agricultural land is not taxed based on different tax mechanisms. The New London-Spicer administration and school board work hard in advocacy efforts with legislators to bring equalization funding to schools in Minnesota. Currently, New London-Spicer ranks 230th out of 327 for public schools in revenue received from the state through their current system of financing education. This is not sustainable!

4. Inequities in funding formulas.

Various funding formulas are tied to free and reduced lunch numbers in school districts. A couple of these programs are Title I and compensatory education. The higher a district's free and reduced population is, the more revenue they receive. New London-Spicer has a lower free and reduced lunch population which means we generate less funding than most of our neighbors. 

ACGC - 36.6% Albany - 17.8% BBE - 30.0% KMS - 33.0% Litchfield - 32.6% MACCRAY - 36.1% New London-Spicer - 20.5% Willmar - 56.3%

In summary, New London-Spicer faces unique challenges due to its complex situation that have a major impact on the students, families, and communities within our school district. All of these factors have contributed to our current situation and we are working diligently to turn this ship around and get our financial house in order to be able to continue to provide excellent educational opportunities for our students.

The Impact of New London-Spicer Budget Reductions

In November of 2020, the New London-Spicer school district asked its constituents to consider a new tiered operating levy with three increases over the next 10 years. This proposal was not supported by voters. NLS does not currently have a voter-approved operating levy. An average Minnesota school district receives $849 per student through voter-approved operating levies.

The 2020 referendum was proposed after a long community engagement process in which the school board and administration worked directly with community members to identify the best option. This new funding would have prevented the school district from making significant cuts which increased class sizes, eliminated bus routes, and reduced program opportunities. 

As a result of the 2020 referendum failing, the school district made nearly $1 million in budget reductions in order to address our financial situation. We also cut our budget by more than a half-million dollars the previous two years. The following reductions were made in 2021 alone:

These reductions have a significant impact on our organization and our students. Losing experienced staff members is always a challenge. Some of those staff members' positions were not filled in an effort to have maximum cost savings. As a result of this and the elimination of 6th-period classes, class sizes have increased across the district and have surpassed the state average class size.

We have been aggressive in making cuts to our budget to address our financial situation, but the situation is worsening. The freezing of salaries has contributed to some staff members choosing to leave the school district and has created a challenge in filling vacancies. The elimination of the bus route has increased bus times, as well as changed and added pick-up locations leading to some challenges for parents and students. Our custodians continue to be spread thin with the restructuring and vacancies in our buildings and grounds department. 

Without an increase in revenue, the school district will once again be faced with making more budget reductions to prevent the district from entering Statutory Operating Debt. This is where the state of Minnesota would get involved with our local operations and we could potentially lose state and federal aid. A preliminary list has been developed based on feedback from our community last winter. That initial list includes these additional reductions which include staffing and programming cuts:

Elimination of Additional 2.5 FTE Teaching Staff - $160,000.00 School Resource Officer - $82,000 Gifted and Talented Program and Teacher - $56,447.00 Communications Department - $31,312.98 Title I Restructure - $17,943.00 *Boys Tennis - $8,000.00 Athletic Trainer - $7,750.00 *Girls Golf - $7,500 *Please recall the last article in the Lakes Area Review or on my Blog (depending on where you’re reading this) regarding the elimination of activities.

If the November 2021 referendum is approved, New London-Spicer would see an improvement to our financial situation, allowing us to reverse some of the cuts implemented in recent years that have negatively impacted students. The referendum would also allow the district to maintain and increase our academic programming; increase mental health services for all students in PreK through grade 12; increase curriculum, instruction, assessment, and oversight to further improve teaching and learning opportunities; maintain technology infrastructure and a 1:1 platform; as well as, return to smaller class sizes allowing our students more individualized learning.

As a district, we value stakeholder feedback so it remains important to continue discussions on future elimination of programming.. Knowing the priorities of the community is an important part of our decision-making process, we kindly ask that you consider completing a survey to provide feedback on future budget reductions. To do so, please visit the following link: https://bit.ly/2021nlsreductionsurvey

In closing, please feel free to reach out to me directly with any specific questions you may have. Thank you to those that have already done so. You can reach me via email at AdamsW@nls.k12.mn.us or by calling the school at 320.354.1401.