ISD 192 Budget Update - March 14, 2023

ISD 192 Budget Update - March 14, 2023
Posted on 03/14/2023
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Along with the many great things that happen in our classrooms every day, we are already planning for the next school year. We wanted to share an update with you about our budget planning for the 2023-2024 school year and beyond.

As you may know, all Minnesota school districts are required to establish an annual budget that balances revenue and expenditures. We have been working with the board for several months on budget planning. Budget assumptions and established parameters serve as a guiding document in the decisions that need to be made in order to achieve a balanced budget. The 2023-2024 Budget Assumptions and Parameters were approved by the School Board at the February 27th, 2023 meeting. The parameters this year prioritize maintaining current class size ratios.

ISD 192, along with many metro school districts, is facing a budget deficit for the 2023-2024 school year. We initially projected a budget deficit of $3 million for the 2023-24 school year. However, the Board approved the use of $1 million from the 2015 Assigned Fund Balance to maintain current class size ratios, which reduces the deficit to $2 million. At last night’s board work session, we presented our Budget Realignment Recommendations for the 2023-2024 school year. The Board is scheduled to take action on the Budget Realignment Recommendations for the 2023-24 budget at the March 27th business meeting, which will allow us to meet contractual requirements and statute requirements. Our administrative team, finance committee, and School Board have spent a significant amount of time over the last six months considering different ways to approach balancing the budget. The recommendations were made in the context of looking at our system as a whole. You can review the 2023-24 Budget Alignment Recommendations as presented at the March 13, 2023 School Board meeting here. 

The budget deficit for 2023-2024 is primarily caused by the following three factors:

  • A decline in birth rates in our community of 28% over the last 10 years, resulting in declining student enrollment in ISD 192 
  • Lack of adequate funding from the state to keep up with inflationary costs 
  • Lack of adequate funding from state and federal sources to cover the cost of special education services provided by the district (often referred to as the “special education cross subsidy”)

Currently, more than 70% of our funding comes from the state of Minnesota. And while the legislature will likely approve legislation that will improve funding for districts in the coming years, funding levels in the past several years have not been enough to fully cover increasing costs.

The State is projecting a budget surplus and is currently considering varying proposals in the House, Senate, and governor's office. A final determination of state educational funding is not anticipated until the end of the legislative session on May 23, 2023. If the State does not complete its school funding legislation until the end of the session, it will unfortunately be too late for school districts to respond to any changes and still meet their statutory balanced budget requirements. 

Please know that we are doing our best to balance the budget while maintaining the quality of education and services we all provide our students. To learn more about this, school finance, and the budgeting process please visit our Budget Info & FAQ webpage.