After a year of unexpected expenditures and fluctuating enrollment numbers, school districts throughout the state face budget shortfalls that could be ongoing.
In early 2021, 144 Minnesota school districts responded to a survey created by several public education associations including the Minnesota Association of Business Officials, the Minnesota School Boards Association, the Association of Metropolitan School Districts, the Minnesota Association of School Administrators, the Minnesota Rural Education Association and Schools for Equity in Education (SEE).
Of these 144 districts, 92% projected that if Minnesota legislators do not pass a funding formula increase, their general fund expenditures would exceed projected revenues for the 2021-2022 school year, thus putting them in a deficit. For some districts, this deficit could fall in the million-dollar range, according to a March 1 SEE news release.
Although one-time federal funding from CARES and Elementary and Secondary Student Emergency Relief Funds was helpful to offset some of the initial costs of the transition to pandemic-style learning, it didn’t create a lasting solution, said Executive Director for AMSD Scott Croonquist.
“It’s very helpful, and we’re appreciative, but it’s money that is coming on a one-time basis, and so much of our expenditures in a school district are ongoing,” Croonquist said.
Croonquist cited staff as one of the biggest ongoing expenses districts have — also one of the groups who were affected by some of the recent budget cuts.
Each year, districts review staffing based on enrollment numbers. In some cases, decrease in enrollment in the last school year meant staffing reductions had to be made.
“Even though staffing adjustments based on enrollment is a routine process it is always hard to make reductions, especially when they impact our team members that we care about so much,” Jordan Superintendent Ranae Case Evenson said. “This year has been no exception ... it is very challenging.”
State and federal funding sources of the past year focused on direct response to COVID-related expenses in keeping with federal guidelines, including the purchase of more personal protective equipment, ventilation improvements and providing student mental health and distance-learning support.
Although these funds were needed, they were not enough to make up for the loss in revenue, said Director of Finance and Operations for Carver County Schools DeeDee Kahring.
Decline in enrollment
Beyond increased expenditures on additional staff to keep schools running under social-distancing guidelines, personal protective equipment, cleaning supplies and myriad of other COVID-related costs, the decrease in enrollment created a funding issue for many districts across the state.
State funding for public schools is allocated based on a formula that uses enrollment numbers from the previous school year.
The option of distance-learning led some parents to keep their students at home full-time or even homeschool. Some parents of kindergarteners decided to delay their child’s start by one year due to the pandemic, said Julie Cink, executive director of business for the Prior Lake-Savage Area School District.
According to the Minnesota Department of Education, 17,000 students withdrew from public schools last fall due to COVID-related concerns.
Districts make enrollment predictions months prior to the start of the school year, before individual families made a decision about what would be best for their children, leaving the district less prepared for what actual numbers would be throughout the school year.
“We were planning on having those kids and our budget was based on those students coming,” Cink said. “It was a big hit to our budget financially. Parents needed to make decisions that were best for them. And I totally understand that but as a district, it really hurt us financially and there’s really no way to make up that revenue.”
Need for more funding
Given the struggles and circumstances districts have faced in the past year, Minnesota Gov. Tim Walz, himself a former educator, has proposed a 1% formula increase as part of his budget for the upcoming year.
Some district finance leaders say it’s not enough.
Of those surveyed in the AMSD study, 60% still project budget cuts even with the increase.
“State funding just has not kept pace with inflation and enrollment,” said Director of Finance and Operations for Shakopee Public Schools Bill Menozzi.
Croonquist said one of the primary concerns AMSD will lobby for is for state legislators to address the loss in enrollment, and increase the funding formula to create a more lasting solution and reliable source of funding for districts across the state.
“We’re hoping that it was a one-year blip, but we won’t really know for sure until next fall, when we’re hopefully going to get back to more of a normal situation,” Croonquist said.
Croonquist also said AMSD is asking state legislators to empower districts to offer a distance-learning option, which would help retain students and allow them the flexibility to use the learning model that works best for them and their families.
In the meantime, administrators fight to maintain a sense of normalcy as much as possible, especially for the students they aim to prioritize.
“We’re trying to maintain class sizes and have as little impact on the educational experience as we can,” Cink said.
Case Evenson said Jordan teachers, staff and administrators continue to hold a common goal of supporting students and offering the best educational opportunities to them.
They anticipate knowing more about state funding at the end of May, Case Evenson said.