Minneapolis Public Schools looks to one-time funds to help cover $97 million gap in proposed budget

Facing what district leaders have called a looming financial crisis, Minneapolis Public Schools again plans to use federal pandemic relief funds — which sunset in 2024 — and its rainy-day fund to balance its budget for next school year.

The School Board will vote on the $976 million budget at its Tuesday meeting. That budget was drafted before the passing of the state's education finance bill, which will bring about $35 million in new funding for Minneapolis Public Schools next year. That legislation could also yield more money for the district because it ties additional automatic increases in the education funding formula to inflation.

But that's not enough to cover the nearly $97 million gap between the district's revenue and expenditures next year.

In a statement Wednesday, the district said its finance department has "immediately begun plans to work with the School Board in determining how the funds will be invested and put to work on behalf of our students."

Despite Minneapolis Public Schools' own projections from last fall that, barring massive cuts or revenue boosts, the district will be in the red by the 2024-'25 school year, the proposed budget is 7% higher than the current budget.

"We still have a lot of hard work and hard choices to make in the next 12 to 18 months," said Board Member Ira Jourdain. "But that increase puts the priority on school sites and students as we come out of the pandemic. This lays a foundation for what's next."

The budget funds hundreds of new positions — at a cost of more than $30 million — including a part-time librarian for every school and teachers and associate educators to staff more than 100 "intervention triads" aimed at helping students who are struggling academically. Those intervention educators' salaries will be paid with one-time pandemic relief funds.

Interim Superintendent Rochelle Cox said the goal is to help students recover from learning loss suffered during the pandemic and the extra help won't be needed at the same level year after year.

"I feel like this is the last opportunity to do that with the [relief funds] and do it at every school," she said, adding that next year will be a "hard budget season."

Cox and her team have repeatedly referred to the tough decisions ahead. And School Board members have recently started discussions about a "district transformation" that could include school closures and consolidation amid declining enrollment.

District leaders upended the budgeting process this year, opting for a "priority-based" model. Each department presented how its proposed expenses aligned with goals in the district's strategic plan. School allocations remain largely the same, adjusted only for enrollment changes.

Minneapolis Public Schools enrollment hovers around 28,000 and the district estimates that number will continue to drop by 5,000 students over the next five years. The city's schools have the building space to serve 45,000 students.

"Absent the aid from the Legislature, where would we be?" Ibrahima Diop, the district's senior officer of finance, said at a School Board meeting last month. "We've said time and again that we have to do things differently to put the district on good financial footing."

Last year, the district had to revisit its finances and make adjustments, including cuts, after the teachers strike because the budget gap grew by tens of millions of dollars.