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"Two point two percent is not a lot of money, if that's what we actually get," said superintendent Howard Caldwell to the board.

"I wouldn't want to go to the bank on that," Caldwell added, "but that's what's estimated at this point."

District #741 is predicted to have a 4.9 percent funding increase for 2002-03 for a biennium (two year) increase of 7.1 percent.

Part of the increase in the second year is the roll-in of up to $415 in state equalized excess levies. Currently, the local district has an excess levy of $315 per pupil unit, which raises $429,000 per year for the district, according to the Department of Children, Families and Learning.

Because the district already has a levy of $315, the Paynesville schools will only get an extra $100 per pupil unit in 2002-03. This amounts to over $130,000 for the school year.

Rolling the excess levy into the general formula does mean that local taxpayers will not be responsible for paying any of it. Currently, a third of Paynesville's excess levy is paid by local taxpayers and two-thirds is paid by the state.

Caldwell informed the board that the district's financial consultant ÐÊCarolyn Drude of Ehlers and Associates Ð will be at their board meeting on Tuesday, July 24, to discuss the district's finances and review two proposals for additional excess levies.

It's already too late to increase the district's excess levy for 2001-02, but Caldwell said he has Drude preparing financial projections for excess levies of $126 per pupil and $226 per pupil for 2002-03. The state will allow districts to go beyond $415 per pupil, if residents vote to do so.

The levy of $126 would be paid 70 percent by the state and 30 percent by local taxpayers. The levy of $226 would be split between the state and local taxpayers.

"As you know, we are potentially looking at more reductions," said Caldwell. "This is potentially a way to avoid that."

The excess levy should be made more palatable because local property taxes will be reduced by the state, according to Caldwell. In the first place, the existing excess levy will be wiped out for 2002-03. Secondly, property tax reform mean landowners will be paying less tax.

Farmland and seasonal lakeshore has been exempted from the education rolls. This will increase the amount other taxpayers - residential homes and commercial property - will have to kick in for a levy.

"Just playing games," said school board chairman Pat Flanders of the funding snafu and new requirements. "What they do is cut our funding to less than inflation, roll in certain funds, and tell us to get an excess levy,"Êhe said.

The district also needs to negotiate new contracts with several of its unionized staffs this year. The Legislature also passed a law requiring districts to only make contracts with money they can afford, said Caldwell, who had not seen all the specifics of this new requirement. However, the settlement date of Jan. 15, which used to include penalties for districts that had not settled, has been eliminated.