The Minneapolis Public Schools Board of Education finance committee was supposed to meet two weeks ago.  The committee delayed its meeting on 2022-23 school site budget allocations in the hope that the state might allocate some of the $9.3 billion budget surplus to K-12 schools.

The regular legislative session ended on May 23, without any new funding for K-12 schools. This means the 2022-23 school allocations are unchanged from the May 3 finance committee meeting.

On May 31, the finance committee unanimously voted to send the 2022-23 budget to the full board.

If there is a special legislative session that increases funding to the district for next year, a resolution to amend the budget from the school board would go through the typical process. First it would be presented to the finance committee, and then go to the full school board for a vote.

The current budget resolution that the finance committee approved on May 31 states the expected revenue for next school year will be $841 million, including $53 million in COVID-19 relief funds. The expected expenses   for the school year are $929 million.

The $88 million gap between revenue and expenses will be covered through a combination of funding sources:  $18.4 million from the assigned general fund balance, $1.7 million from the  food service fund balance, and $1.2 million from the community service fund balance.

The budget gap for capital projects will be specifically covered by $65.8 million from the capital projects fund.

The district also has an unassigned fund balance but one reason those funds cannot be used is because the balance needs to stay above 8% of general fund expenses. As of April 2022, the unassigned general fund balance was 5.9% of general fund expenses. Based on anticipated state payments, the district expects the unassigned fund balance to meet the board’s 8% target by the end of the fiscal year, June 30.

Despite increasing the overall allocations to schools,  buildings will still have staff and programming cuts

Although the district had initially proposed cutting $27 million from the total funding allocated to schools, Senior Finance Office Ibraihima Diop said at the May 31 meeting, “I want to make it very clear that schools were not cut by $27 million… We increased the pool of money that flows to our schools by one percent.”

The $2.8 million increase in funding to schools was not distributed evenly across school sites, according to the school allocations released by the district on May 3. Some schools will still face a reduction in staff and programs because of projected enrollment declines and increased costs.

“The schools that saw a decline in enrollment obviously will get a decline in classroom teachers,” said Budget Director Tammy Frederickson. “However, with the new MFT contract, we are covering all those increases in salaries and expenses. So while [some schools will] have fewer students, they may have more money in the class size allocation,” said Budget Director Tammy Frederickson.

Where the projected enrollment declines include students who receive Title 1 and compensatory revenue funding, funding was adjusted to reflect the loss of those funds. Federal Title 1 and state compensatory revenue funding did not increase. But the cost of staff funded by those sources did increase under the new educators contracts.

“[Schools] had to absorb the salary increases for the positions they use [that funding],” Fredrickson explained.

Under state law, there are twelve approved uses for compensatory revenue, which includes hiring additional classroom teachers to lower class sizes, hiring additional educational assistants to provide more individualized learning, and providing bilingual programs for English learners. School principals, in consultation with school site councils, decide how each school uses these funds.

Student enrollment continues to decline

The 2022-23 school year allocations to schools are based on an expected enrollment next year of 28,115 students, which is 387 students less than were enrolled in the district as of April 1.

The projected enrollment decline is most acute at middle schools, where the district  is forecasting a loss of 345 students next year, which is 6.6% of current middle school enrollment.

Enrollment in K-5 and K-8 schools is expected to have a small decline and high school enrollment is projected to increase by 4.2%. At a minimum, the projected enrollment decline will result in a loss of nearly $2.7 million in state funding because schools are funded per student.

Despite enrollment declines, federal COVID-19 relief funds are being used by the district to help maintain staffing

At the May 31 meeting, school board Director Sharon El-Amin asked for an explanation of why $53 million in COVID-19 relief funds, otherwise known as ESSER funds, are being allocated to maintain staffing across the district, but some schools are still facing cuts to staff and programs.

“As we looked at the decline in enrollment and all the expenses coming with our new contract agreements, we had a significant budget gap,” Frederickson explained. “Rather than having a much bigger budget gap which would have been… $73 million, we’re going to use those ESSER funds to cover some of those programs and positions that are eligible.”

Frederickson gave the examples of small school subsidies and targeted programming funds as two ways the budget will directly allocate COVID-19  funds to schools to cover some staffing costs.

Small school funds are allocated to buildings with less than 250 students enrolled, and range from $30-50,000 per school. Currently there are 11 elementary schools and two high schools that qualify. These schools include Bethune, Cityview, Hall, Hmong International Academy, Jenny Lind and Nellie Stone Johnson, located in North Minneapolis. This group also includes some of the district schools that have the highest percentage of students who qualify for free and reduced price meals.

The targeted programming funds are allocated to schools that would not otherwise have enough per pupil funding to meet the minimum staffing requirements the district has as part of its predictable staffing model. These allocations to schools range from $40-700,000 thousand per school. Currently 15 elementary schools, one middle school, and five high schools receive this funding. In Southwest Minneapolis, these funds will be assigned to Armatage, Burroughs, Kenny, Windom, both Lake Harriet campuses, Hale, Field, and Anthony schools. These schools have some of the lowest percentage of students who qualify for free and reduced priced meals of all the district schools.

At the elementary school level, the targeted programming funds total more than three times the amount of the small school adjustment funds.

The full school board will take up the budget resolution at its June 14 regular business meeting. To meet state requirements, approval of the budget must be completed by June 30  Five votes from the school board members are necessary to approve the budget resolution. At the May 10 board meeting, Director Ira Jourdain indicated he would not vote to approve the budget in its current form. No other board members have said how they plan to vote.