Despite more funding from state, some Minnesota school districts still face big budget cuts

The Minnesota Legislature voted this year to boost education spending by $543 million, but some school leaders say it's not enough to avoid significant cuts over the next two school years.

As they finalize their budgets for the next school year, school districts across the state are slashing teaching positions and extracurricular activities, setting bigger class sizes and, in some cases, preparing to make their case to local voters to raise more money. In some of the state's largest districts, including Anoka-Hennepin, Rosemount-Apple Valley-Eagan and Elk River, the shortfalls amount to millions of dollars — gaps administrators say are driven by years of insufficient state funding and surging costs in staffing, special education and other areas.

Gary Amoroso, executive director of the Minnesota Association of School Administrators, said he's been hearing similar stories from leaders in school districts of all sizes. Most are grateful for the Legislature's move to increase the basic education funding formula by 2% in each of the next two years, and for additional spending targeted at special education costs. But many school leaders said their districts need more help than lawmakers were willing to provide.

"There will still be districts making tough decisions, in terms of either reducing or eliminating programs — and that means staffing, class sizes, things of that nature will be impacted," Amoroso said. Statewide, the budget challenges facing school districts don't appear to be as extensive or widespread as they were a year ago.

In Minneapolis and St. Paul, which last year were collectively short about $50 million, the financial situation has stabilized for the 2019-20 school year — though district leaders have warned of challenges looming in the years ahead.

But for other districts, including many that had pushed for a 3% funding increase, that's little comfort.

North of the Twin Cities, the North Branch school district has been in budget-cutting mode for more than a decade.

Declining enrollment that spiked during the Great Recession has meant season after season of hard decisions for administrators and school board members, and this year is no different.

This year, Superintendent Deb Henton had to figure out how to slice more than $2 million out of the district's $33 million budget The district ultimately cut 37 positions, many of them through layoffs. Class sizes will be larger next year, she said.

In the northwest corner of the metro area, the Elk River school district is facing a shortfall of more than $9 million despite an uptick in enrollment that's expected to continue over the next decade. District spokesman Cory Franson said the growing gap between the costs of special education and the amount of money the state and federal government provide is one major problem, as is the rising cost of salaries and benefits for staff members. The district calculated that it would have needed a 12% general funding increase from the state to balance its books this year.

Franson said the district — like others around the state — is still playing catch-up from a decade ago, when state funding for schools dropped well below the rate of inflation.

"We need to attract high-quality staff, and when people create contracts to build buildings and do improvements, we're paying the same things as the big businesses in town," he said.

To balance the budget, the district is cutting teaching positions, which will result in bigger class sizes at every grade level.

It's a similar story in the Burnsville-Eagan-Savage district, which is facing a shortfall that tops $6 million for the coming school year. In addition to cutting teaching and other staff positions, the district is cutting the number of high school field trips, dropping some extracurricular programs in elementary and middle schools and trimming the budget for supplies and substitute teachers.

"We are already 'running lean,' so reductions are very much reaching programs and supports that we will miss, including elementary band and orchestra and middle school sports," said district spokesman Aaron Tinklenberg.

The Rosemount-Apple Valley-Eagan district, forecasting a $25 million shortfall over the next three years, cut 46 positions, 31 of them teachers for the coming school year. Anoka-Hennepin, the state's largest school district, is $5 million short for next year but was able to cover that amount with money saved for this sort of situation. But the potential for a bigger shortfall is on the horizon for the 2020-21 school year.

Superintendent David Law said he doesn't expect the Legislature will look to spend more on schools when it reconvenes in 2020 because it's not a budget-setting year. But he's hopeful more lawmakers are thinking about the long-term implications of higher special education costs and other structural problems causing repeat budget issues for districts across the state.

"The cost of labor is rising everywhere, and we feel that as much as anyone," he said. "Our cost of labor exceeds the increases we've [received]."

Over the next few weeks, school boards in many Minnesota districts will be making another difficult decision: whether to put a funding referendum on the ballot for local voters this fall.

Those conversations are underway in Burnsville, Elk River and North Branch, among others.

Henton, the North Branch superintendent, said it's tough to get out of the spiral of budget cuts, which tend to drive out students and families and the additional funding that comes with them.

"When you are continually facing a decline in enrollment and budget, it's very difficult to convince others that your school district is high quality," she said.

"We have an excellent staff and we offer things our neighboring districts do not. But people look at you when you make budget reductions, and they make judgments that aren't accurate."

Erin Golden • 612-673-4790