South St. Paul superintendent warns of $1.5 million hit from state change to compensatory funding; board directs staff to prepare cuts

Superintendent Dr. Zambrino told the South Saint Paul School Board on Feb. 24 that a change in the state's method for counting students eligible for compensatory revenue could reduce the district's compensatory funding by about $1.5 million and force program and staffing adjustments.

Dr. Zambrino said the state is now counting only students who are —directly certified— through county benefit programs rather than including families who submit applications for educational benefits. He said that change would move the district's compensatory revenue from roughly $4,500,000 to $3,000,000, a loss of about $1,500,000.

The change follows the state's rollout of universal free school lunch, which removed fee collection and altered the data sources the Department of Education now uses to calculate compensatory aid. Dr. Zambrino told the board he raised the issue with state officials and learned the governor had proposed a one-year —hold harmless— to preserve districts' counts while a longer-term fix is developed.

Why it matters: Compensatory revenue helps pay for services targeted to students in poverty. Dr. Zambrino said South Saint Paul receives additional targeted funding for social work, counselors, academic intervention and other supports funded in recent years with referendum and categorical dollars; a shortfall would require the district to —right-size— staffing and programs to align with enrollment and the new funding baseline.

At the Feb. 24 meeting the board voted 7-0 to approve a resolution directing administration to prepare recommendations for reductions in programs and/or positions and the reasons for those recommendations. Human-resources director Joel Miltier said the resolution is a routine annual step but that the current state funding uncertainty makes implementing reductions more likely.

Details from the superintendent's presentation: - The district's internal count that includes direct-certification plus families who file educational-benefits applications is about 58 percent; the state's new direct-certification-only count was reported at 42 percent. - Using the state's direct-certification method would reduce compensatory aid from roughly $4.5 million to $3 million, a drop of about $1.5 million. - Dr. Zambrino said different districts are affected unevenly; South Saint Paul is among the most affected in total dollars and among the top five most affected per pupil. - The superintendent said he has spoken with the Department of Education and the governor's office and has been invited to participate in a work group to seek a longer-term fix.

Board action and next steps: After discussion, the board approved the resolution directing administration to identify recommended reductions and to proceed with the statutory staffing process that may include unrequested leaves of absence for teachers if reductions are required. Dr. Zambrino asked residents to contact legislators to support a proposed hold-harmless bill while a longer fix is worked out.

The board did not adopt any specific personnel or program cuts at the Feb. 24 meeting; the vote authorized staff to return with formal recommendations if needed.

Ending: The superintendent said he was —cautiously optimistic— the governor's proposal could hold the district harmless for one year but recommended the district plan as if the change were permanent until the legislature acts.