The Minneapolis school district is back in a deep and familiar hole: It's facing a $19.6 million budget deficit for the 2020-21 school year.
District leaders are attributing the projected gap largely to declining enrollment and revenue that hasn't kept up with inflation and rising operating costs.
The gap would have been $32 million, but district leaders pulled $8 million from budget reserves. Money can be pulled from the reserves without board approval, according to district officials. Another $4 million came from money set aside to replenish the district's rainy-day fund.
District officials said they have been reserving money as a backstop against future shortfalls. "Over the past two years we have been setting money aside in the assigned fund balance because we knew in the future we would have a budget gap," district Chief Financial Officer Ibrahima Diop said.
So far it is not clear how the shortfall — which represents about 3.2% of the $619 million general fund budget — would impact schools and programs next school year. District officials said they are preparing recommendations that will be presented to the board in February, then will gather feedback from the community before final budget decisions are reached in early spring.
St. Paul Public Schools officials have yet to release their budget forecast.
Last spring, Minneapolis district leaders erased a $33 million shortfall — the largest gap in the school system's recent history. This school year served as a short break from chronic shortfalls that have long dogged the state's third-largest school district.
This new shortfall comes after a $30 million voter-approved property tax increase in November 2018 for new technology and other district expenses.