St. Paul schools freeze hiring through June

The St. Paul school district is instituting a district-wide hiring freeze, it said Monday, because of concerns over what the state's gloomy budget picture could mean for the district's finances this school year.

Just more than a week after the state announced it would face a $5.2 billion deficit over the next two and a half years, the district said it hopes to save up to half a million dollars this school year by not filling positions that open between Monday and June 30.

"We're anticipating that even in this fiscal year, our budget will be impacted in some way by the state shortfall," said Lois Rockney, the district's chief business officer.

Positions that are deemed "critical" by the district -- such as classroom vacancies that need a licensed teacher -- can still be filled.

Rockney stressed that the school district had a balanced budget coming into the 2008-09 school year, and she doesn't think that has changed.

But $426 million of the state's projected shortfall comes in the current budget period. Rockney pointed to the possibility that Gov. Tim Pawlenty could use "unallotment" -- making short-term cuts on his own to make up for the immediate deficit-- as one possibility that could affect the district in the near future.

Districts statewide are thinking more carefully about which positions should remain open to save money, said Sue Crockett, executive director of the Minnesota Association of School Business Officials.

"Just like any of us," she said, "whether in our private lives or our business, I think everyone is being real careful right now because we don't know what the future brings."

Peggy Ingison, Minneapolis public schools' finance chief, said senior-level district officials will meet later this week to discuss a potential hiring freeze but no final decision has been made.

Ingison said it's a step many districts will consider in light of the state's recent budget forecast.

The Minneapolis district anticipates a $28 million budget shortfall for the 2009-10 school year in part due to declining enrollment and potential cuts in state aid.

The St. Paul district is the state's second largest, and its budget for the 2008-09 school year is $628 million. About 85 percent of the district's spending is salaries and benefits.

In August, the district projected a $15 million shortfall for next year. Rockney said it will probably be larger, since it is likely that fewer employees than projected will retire, and the district's investments will not yield as much as planned.

St. Paul positions that are currently vacant and have not been posted will not be filled. The district will allow positions for which hiring is already underway to be filled.

This is the third consecutive year that St. Paul has had to institute a midyear hiring freeze.

"We take a real careful look at what's happening with our expenditures," she said. "This is probably earlier than usual, but because of the state shortfall, we decided to be a little proactive."