Budget gaps challenge Minnesota school districts

For some Minnesota school districts, the evidence of a particularly tough round of budget cutting is hard to miss this fall.

Forest Lake has fewer teachers, a shuttered elementary school and higher fees for parking and sports events.

Robbinsdale's class sizes are larger while Burnsville has fewer teachers and staff members. Other districts, such as Rosemount-Apple Valley-Eagan, patched multimillion-dollar budget gaps with money from reserve funds, but are now warning their communities that bigger shortfalls could loom on the horizon.

Around the state, dozens of districts are beginning a new school year amid some of the toughest financial circumstances they've faced in recent years. Nearly 60 districts spent this spring determining how to fill in a combined $127 million in budget deficits, a situation they attribute in part to higher costs for special education and English-language-learner programs and inadequate support from the state government. Now, they are figuring out how to keep schools running with fewer resources — and in some cases, trying to persuade local voters to provide more help.

In the Forest Lake district, where voters last year rejected an operating levy increase and a bond referendum that would have funded improvements for sports and arts facilities, administrators had to trim about three percent — or $2 million — from the district's $72 million budget. In the last four years, the district has cut $7.5 million from its budget as enrollment declined. Superintendent Steve Massey said he's hopeful the most recent impacts — ranging from the closure of Central Montessori Elementary School to higher parking and activity fees for students and the end of district-funded Advanced Placement exams — are showing residents of the north metro district that the situation is serious.

"The community awareness is growing daily," he said. "The concern is growing daily."

Debates over school funding dominated the end of this year's legislative session, culminating in DFL Gov. Mark Dayton's unsuccessful pitch to set aside $138 million in emergency funding for schools facing major shortfalls and a dueling proposal from Republican legislative leaders that included a smaller amount of additional money for schools. When the session ended without the two sides reaching agreement on any emergency help, districts forged ahead with budget tweaks and reductions.

Robbinsdale, facing a $10.6 million shortfall, cut more than 70 staff positions, about half of them teachers. Some of those reductions came from retirements and lined up with the district's drop in enrollment, but the remaining staff is feeling an impact. Peter Eckhoff, president of the Robbinsdale Federation of Teachers, said district officials have worked hard to protect students and classrooms from serious budget cuts. But the staff is about 4 percent smaller than last year and teachers are working without many of the education assistants and other support staff members who lend valuable help.

On top of the staff cuts, the district approved larger class sizes, a move that saved about $750,000, but added to teachers' workloads. "It's been a little brutal," Eckhoff said.

The Robbinsdale and Forest Lake districts will both go to voters this fall with additional funding requests. In Forest Lake, the district is seeking a levy increase of $825 per pupil (an annual tax impact of about $226 for someone with a $200,000 home). Robbinsdale hopes to increase its levy by $515 per student (about $150 annually for the owner of a $223,000 home).

If the levy request fails, Robbinsdale administrators say they expect the cuts to continue: potentially $11 million in reductions over the next few years.

Other districts have been able to tap into reserve funds to avoid immediate cuts. In the Osseo district, growing enrollment helped improve financial projections that had indicated a potential $6 million shortfall. Patricia Magnuson, the district's executive director of finance and operations, said Osseo is now projecting a $2.7 million gap it plans to cover with reserves. The district is also seeking to streamline its transportation operations and make school facilities more energy efficient to cut costs. If enrollment keeps going up, Magnuson said the district shouldn't run into significant trouble until the 2021-22 school year — but she said the funding issues that have plagued districts around the state are not going away.

"In the simplest terms, the costs in the school district are rising faster than the revenue that is supplied by the state," she said.

Rosemount-Apple Valley-Eagan district spokesman Tony Taschner said districts are still struggling to catch up from years in which state aid hasn't matched up with inflation. A recent report from the North Star Policy Institute, a left-leaning policy group, found that inflation-adjusted, per-pupil state aid dropped by 18 percent between 2003 and 2012, and that 93 percent of districts receive less per-pupil aid today than they did in 2003.

Taschner said Minnesota's system of relying largely on local tax increases to fund schools has created an unbalanced system in which some districts are constantly struggling to catch up.

"The danger in that is the gap you see in programming, from the districts that find it much easier to approve referendums, and those that don't," he said.

Taschner's district has been able to tap into reserves to cover much of this years $12 million shortfall, but is anticipating another $25 million gap over the next two to three years. He said that means voters will likely be asked again next year about a levy increase.