Updated 05.19.2023
Is the district projecting a budget deficit for the 2023-2024 school year?

Yes. ISD 192, along with many metro school districts, is facing a budget deficit for the 2023-2024 school year. We initially projected a budget deficit of $3 million for the 2023-24 school year. However, the Board approved the use of $1 million from the 2015 Assigned Fund Balance to maintain current class size ratios, which reduces the deficit to $2 million.
The budget deficit for 2023-2024 is primarily caused by the following three factors:

A decline in birth rates in our community of 28% over the last 10 years, resulting in declining student enrollment in ISD 192
Lack of adequate funding from the state to keep up with inflationary costs
Lack of adequate funding from state and federal sources to cover the cost of special education services provided by the district (often referred to as the “special education cross subsidy”)

How are budget reduction recommendations identified?

Reductions are always difficult. Every position and program we have in the district has value and is personal to someone or some group. Our administrative team, finance committee, and School Board have spent a significant amount of time over the last six months considering different ways to approach balancing the budget. The recommendations were made in the context of looking at our system as a whole. If nothing significant changes at the legislative level, budget decisions are only going to get more difficult as we move into next year and begin to look at 2024-25.

What steps have been taken to address a budget deficit in the past?

Every year ISD 192 goes through a careful budgeting process to ensure we are meeting our learners’ needs as fully and economically as possible. As part of the 2021-22 budget process, ISD 192 made reductions of approximately $700,000.

Here is a list of those reductions:

MARSS Position $ 84,000

Piano Accompanist-Middle Schools $ 11,520

Summer Custodian Helpers $ 26,000

Tech Position (partial) $ 8,400

Technology Capital $ 90,000

Site Capital/Supplies/042 $294,000

District Staff Development $100,000

Band Capital $ 15,000

Wellness Committee $ 9,000

Adjust Heating/Cooling Set Points $ 28,000

Increase Participation Fees ($20) $ 51,200

$717,120

As part of the 2022-23 budget process, ISD 192 made reductions of approximately $1 Million.
Return to the staff ratio that is currently in policy. - $1,053,000
Discontinuing District GEL staffing - $195,000
Discontinuing Float subs - $270,000
Required additional special education staff + $468,000
= $1,050,000 total reduction

How do reductions to capital allocations impact learners?

Part of the reductions made for the 21-22 school year that were carried forward to 22-23 include reductions to capital allocations. These allocations are broken down in the chart below by the number of learners/participants that these allocations support.

	22-23 Allocation	Learners/Participants	Allocation Per Learner/Participant
Elementary (5 Schools Combined)	$20,753	2767	$7.50
Middle (2 Schools Combined)	$13,662	1607	$8.50
FHS	$19,962	2218	$9.00
Band**	$15,000	1167*	$12.85
Co-Curricular (athletics)	$6,654	1264	$5.26
Media	$12,500	6592	$1.90

** Band participant numbers are based on students who will be in grades 5-12 for the 22-23 school year and registered to participate in band.

What budget realignments and reductions have been recommended for the 2023-24 school year?
Budget Realignment Recommendations for the 2023-2024 school year were presented at the March 13, 2023 board work session. The Board is scheduled to take action on the Budget Realignment Recommendations for the 2023-24 budget at the March 27th business meeting, which will allow the district to meet contractual requirements and statute requirements. You can review the 2023-24 Budget Alignment Recommendations as presented at the March 13, 2023 School Board meeting here.

How will State funding impact the 23-24 Budget and beyond?

Updated 6/8/2023

Now that the Minnesota Legislature has completed its work, more information is becoming available on how recent legislative action will affect Farmington Area Public Schools and districts throughout the state. The provisions included in the bill that was approved by the Legislature and signed by Governor Walz outlines funding for the next two years and also includes fiscal and policy provisions that will impact districts for several years.

“We do not yet have all the details on how this legislation will affect our district, but based on preliminary numbers our district is projecting a budget deficit of about $2 million for the 2024-2025 school year,” said Farmington Area Schools Superintendent Jason Berg. “We certainly appreciate the work of our legislators and the funding that will be provided, but it is important to remember that this funding did not fully address the financial issues of most Minnesota districts.”

The most significant funding provisions included in the recent Omnibus Education Bill include the following:

A general education funding formula increase of 4% for 2023-2024 and 2% for 2024- 2025.
The general education funding formula will be linked to inflation beginning in 2025-2026, which means funding for schools will increase in future years as inflation rises.
Funding to reduce the “special education cross subsidy,” which means that districts will need to use less general education funding to cover part of required special education costs. The current proposal reduces the cross subsidy for districts to 44% for the next two years. Districts will still need to cover 56% of the costs that should be covered by the state.

As noted in the legislative-related stories we shared throughout the spring, there are also numerous provisions in the bill that increase mandates and expenditures for districts. These unfunded and underfunded mandates could significantly affect the district’s financial projection for 2024-2025 as well as for future years. The three most costly provisions are:

Unemployment insurance for non-certified hourly employees
Implementation of the Read Act, an initiative to improve reading achievement
Paid family leave for district employees

The cost for these provisions is estimated to be about $2 million for our district for the 2023-2024 school year with the likelihood that future costs will increase. Additional mandates, including curriculum requirements, professional development and compliance with new state reporting demands will drive those costs higher.

While more than 70% of the district’s funding comes from the state, district leaders have begun exploring options for increasing revenue in other ways including an increase in our district’s operating levy. The district’s current operating levy generates $623.71 per pupil and will expire after the 2025-2026 school year.

More information on the impact of the bill for Farmington Area Public Schools and other finance-related issues will be shared in the coming weeks. To learn more about this, school finance, and the budgeting process please explore our Budget Info & FAQ webpage.

Budget Info & FAQ

FARMINGTON Area Public Schools