Perham-Dent School District: Millions in cuts, but few answers

PERHAM, Minn. - When science teacher Shawn Stafki was a 10th-grader here three decades ago, there were 17 students in his biology class.

The classroom in which he teaches is built for 24, the upper limit of what the state recommends for lab classes, and as recently as three years ago, when the school had the equivalent of one and a half more science teachers, his biggest class size was 26.

Today, 33 students cram into the room for his environmental studies class.

Next term, a few classes at the school will creep into the 40s.

"I've got them along the wall. I've got them up here by my desk. I've got kids everywhere just trying to find enough space to do a lab," Stafki said. "It's a mess."

And barring a budget miracle for Perham-Dent schools - a district that's already pared more than

$4 million from its budget over the past five years - it's going to get worse before it gets better.

More cuts are on the way after voters rejected a $695-per-pupil operating levy earlier this month, the fourth year in a row a levy has failed here. The district, which is already running a $280,000 budget deficit this year, faces a shortfall of about $637,000 next year and more than $6 million over the next five years.

All of that adds up to leaky roofs that don't get fixed, textbooks that don't get updated, teachers who don't keep their jobs and more tough choices district administrators don't relish.

"Whatever we do now will directly affect the students," said Cyndy Huber, chairwoman of the school board and mother of a junior. "We have cut in the past everything around the student that we could. We've gotten closer and closer to the center, and I think we're right on the edge."

How shortfall happens

As is the case for many cash-strapped Minnesota schools, Perham's deficits come from a combination of declining enrollment, rising costs and state funding that has fallen woefully behind the rate of inflation.

The last factor squeezes schools even when funding seems to be on the rise. In nominal dollars, unadjusted for inflation, basic state per-pupil funding has increased by about $600, or 13 percent, over the last decade. But that's about half the rate of inflation over the same period.

In inflation-adjusted dollars, the state gives about $500 less per student in basic aid today than it did a decade ago - part of the reason about 90 percent of the state's school districts have operating levies in place. Perham is one of a few dozen that does not.

To make matters worse, recent state budgets have relied on delays in school aid payments, disrupting the district's cash flow and forcing it to borrow from private lenders to make up the difference.

In a normal year, the state pays most of its school aid up front - typically 90 percent - and holds back the rest until the following year to account for shifts in enrollment.

Last year, the state paid 70 percent of its aid and held back 30 percent. This year, the upfront payment is 60 percent. Perham-Dent borrowed about $2.9 million this year to meet expenses and will likely borrow next year, tacking loan interest onto its balance sheet.

Steady decline in enrollment over the past decade has also eroded the district's revenue. Since 2003, enrollment has fallen from around 1,600 to 1,350. Departing students have taken with them hundreds of thousands of dollars in per-pupil funding.

Solutions that aren't

Superintendent Mitch Anderson said the exodus produces a harsh cycle: Losing students forces cuts that in turn drive more students away.

While extracurricular programs are easy targets for budget hawks, Anderson said cutting them can wind up costing the district more in enrollment losses than it saves.

"People say, 'Can't you just cut orchestra?' or something," he said. "If you eliminate orchestra, you might lose seven or eight kids."

Programs like middle school art, German and elementary school yearbook have already gotten the ax. At this point, Anderson said, the district isn't trying to add anything back. It just wants to avoid further cuts and fix a few critical areas such as textbook shortages (in many large classes, students can't take books home) and roof leaks, which are handled by well-placed garbage cans.

He said cuts are starting to take a toll on student achievement. A few years ago, Perham-Dent outpaced most surrounding districts in state math and reading test scores. Last year, it fell toward the bottom of the pack.

The district has had some outside help from one-time federal stimulus dollars and local benefactors. Last summer, KLN Family Brands - the Perham-based maker of Barrel O' Fun snacks - donated tens of thousands of dollars for overdue renovations of the gym and auditorium. The company gave another $100,000 the year before to help offset other cuts.

But such generosity actually puts the district in an odd dilemma: The public hears of the donations, sees the ensuing upgrades and assumes the schools are doing just fine.

Kenny Nelson, president and chief executive of KLN, said the company will scale back on donations because he's starting to fear they send the wrong message.

"I think when we give, maybe people think that they don't have to vote for a levy," he said.

Pushback's particulars

This year's levy would have raised about $973,000 a year for the next four years. It would have raised property taxes by about $105 per year for every $100,000 of value of eligible properties. On a $130,000 home - the average market value in Perham - that's about $137 more per year.

The district has tinkered with proposed levy amounts and lengths in its past four efforts but has only come close to victory once. This year, about 60 percent of voters rejected it.

Levy opponents proved a difficult group to track down this year. Anti-levy literature mailed out and distributed in town carried the name of a group -Concerned Citizens for Property Tax Fairness - but bore no names, phone numbers or return address.

Levy opponents went door-to-door in some areas to distribute "vote no" signs, but many of those disappeared quickly in the aftermath of the vote.

Bernie Steeves, an organizer of the Concerned Citizens group and one of the few levy opponents who has spoken publicly about his position, did not return voice messages seeking comment for this story. In years past, Steeves has said he is not against the district but that tax increases are hard to swallow in tough economic times.

Dennis Happel, a Perham attorney, has helped campaign in favor of the last four levies. He described the anti-levy campaign as "a pretty clandestine operation," but a few themes emerged in his conversations with opponents.

Some genuinely can't afford it. Others - particularly some lake homeowners - aren't from the area, don't live close to town, have no children in Perham schools and feel little connection with the district. The issue can be particularly divisive among those voters because not all lake homes are eligible for the levy. Those classified as seasonal property are exempt.

Still others are fed up with taxes in general and have few other opportunities to vote down new spending so directly, even if they have no quarrel with the district.

"I think there's people that are just mad at the world now," said Happel, a Perham alumnus and the father of a handful of graduates.

Anderson, the superintendent, said levy campaigns have sometimes been plagued by wild rumors. He heard whispers the district had paid to rent out the Alerus Center in Grand Forks for the football team (it didn't). Some said they'd heard he was in line for a $30,000 bonus if the levy passed (he wasn't).

"It's tough for us to control," he said.

What comes next?

The district's next round of cost-cutting measures has yet to be determined. It has already frozen support staff salaries and teacher salary schedules. The paraprofessional staff is down to the legally mandated minimums. Options like a four-day school week are on the table, though the savings benefit isn't clear.

"People think there are these quick fixes, and there's not," said Huber, the school board chair.

The district hasn't decided whether to try for another operating levy next year or explore other options. Because next year is a redistricting year, the window of opportunity is limited. Special elections are barred from April until mid-December, and passing school levies in the general presidential election is traditionally difficult.

Further staff cuts are almost a given - a reality that elementary school principal Kari Yates says can cast a pall over teachers.

"One of the hardest pieces is moving forward from November to the end of the school year when you have a lot of people in your building wondering, 'Am I going to be here year?' " she said.

Even so, she said, teachers came in the day after the levy failed and gave their best efforts.

"We aren't really asking to do something new and fabulous. We are asking for the resources to continue to do the right thing for kids," she said.