Oil boom offsets federal aid cuts for some schools

By Kevin Burbach

Associated Press

Published: Saturday, May 10 2014 10:20 a.m. MDT

In this July 26, 2011 file photo, a worker hangs from an oil derrick outside of Williston, N.D. Some North Dakota school districts with large amounts of non-taxable public land near the oil patch, like New Town, are thriving despite decreases in federal funding thanks to the state’s oil boom.

Gregory Bull, File, Associated Press

Enlarge photo»

BISMARCK, N.D. — In the last few years, officials in South Dakota's Todd County School District have had to leave positions unfilled, cut down on professional development and re-evaluate services such as busing.

It's a different story some 450 miles northwest, where North Dakota's oil boom has helped New Town School District build 20 homes and an apartment complex for the district's teachers and constructed a new high school. In the fall, they'll break ground on a vocational center.

Both districts, with nearby Native American reservations, have relied on Federal Impact Aid Funding, which compensates districts that encompass large swathes of tax-exempt federal land, such as reservations and military bases, and large numbers of students who either live on federal land, are Native American or have parents employed by the federal government.

However, the funding has decreased in recent years due to a combination of less money being allotted annually and the effects of 2013's sequestration cuts. That's left most of the districts, like Todd County, in the lurch. North Dakota's schools have fared better, with some, like New Town, thriving thanks to the oil boom.

Oil leases and exploration on land owned by the Army Corps of Engineers is bringing in millions of dollars in royalty each year to New Town, Superintendent Marc Bluestone said. The Corps took over the land that was intended for the district about 50 years ago to build the Garrison Dam, so now the district is seeing some of that money come back and has reinvested heavily in its infrastructure and programs.

"If we didn't have this U.S. Flood Dollars or the oil production tax money that we're receiving, then I think we'd be in real trouble as a district," Bluestone said.

Statewide since 2007, when the oil boom was just beginning, North Dakota's schools have received considerably more money each year, according to Jerry Coleman, the state's Director of School Finance. Those increases typically go beyond adjusting for inflation, which helps cover some of the federal losses, he said.

But not every North Dakota district is flush like New Town.

Dunseith Public Schools in the far northern part of the state will implement a four-day school week next year. Superintendent Pat Brenden said the growing amount of state money has helped the district, but it still needs the condensed schedule to avoid cutting staff as the federal impact aid lessens.

"It's hard to say you have to cut people when you hear the state's increasing funding," Brenden said.

In South Dakota, about a third of the budget for the Todd County district, which includes the Rosebud Indian Reservation, comes from federal funding, superintendent Dr. Roger Bordeaux said.

"Over the last five years with the state struggles with the economy and then federal government struggles ... we ended up losing quite a bit and it starts taking services away from children," he said.

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