CASH BACK:
Inquiring teachers want to know: Why must Santa Fe Public Schools return $613,554 to the State? Beginning in July 2003, a law went into effect that placed a cap on the amount of a cash balance school districts could have based on expenditures and operating costs. SFPS has a cash balance of $3.4 million currently and, as a result, it must pay an 18 percent penalty ($613,554) to the State, according to Greg Hunt, SFPS Budget and Finance director.
Many teachers, however, want to know why the district didn't spend the surplus funds instead of paying a penalty. "Teachers think it's money that could have gone to students," Don Moya, PED deputy cabinet director of budget and finance, says. "I understand their frustration." But both Moya and Hunt say that paying the penalty is worth it. "During the 1998-99 school year, SFPS was $2.6 million in the hole which destroyed its bond rating," Moya says. A bond rating is akin to a personal credit rating, Moya explains. "One of the ways to get a higher bond rating is to have a consistently high cash balance. And to do this, they've had to sacrifice $600,000."
SFPS spokeswoman Ruthanne Greeley also says having a cash balance is useful in situations in which emergency funds are needed. Hunt calls the fact that SFPS must pay a penalty to the State to improve its bond rating a double-edged sword. "It was a compromise," Hunt says. But Moya offers some consolation to the teachers. He explains that SFPS won't have to write a check for the $600,000 to the State, the funds simply won't be included in the funds allotted to the district for next school year. Moreover, the amount won't feel like a major loss because it will be subtracted throughout the school year. "It essentially isn't going to be taken all at once," Moya says.
Send your tips, gossip and news ideas to
.
