Minneapolis Public Schools has made a number of changes to the proposed budget for the 2024-25 school year since its initial proposal was shared with the school board in March. The changes include additional revenue for the district, additional use of the district’s reserves, higher costs of new contracts with teachers and education support professionals, additional funding for some administrative departments, and additional reductions to some administrative departments.

The district shared these budget changes as part of the May 28 Committee of the Whole school board meeting.

In 2022, the district required schools to reopen their budgets and make additional cuts when contracts with teachers and education support professionals were settled after the strike. The district did not ask schools to reopen their budgets this year.

The school board is scheduled to vote to approve the district budget on June 11. Under Minnesota law, the school board must approve a balanced budget before June 30.

Although the district highlighted some of the changes at the May 28 Committee of the Whole meeting, not all changes were discussed. Minneapolis Schools Voices reached out to the district to clarify some of these changes on May 29, but the district has not yet responded.

The combination of restored funding for some programs, higher labor costs, revised revenue estimates for next year, and budget cuts makes it challenging to understand exactly what has changed since March, and how those changes will impact students next year.

Operating expenses have increased $34 million since the March budget proposal. The district has shared that around $2 million of that increase will be used to restore funding for three elementary assistant principals and 11.5 full time equivalent instrumental music teachers for the fifth grade band program. That information was shared with the board’s finance committee on April 30.

There have also been increases to some central office budgets, including the superintendent's office and the office of the assistant to the board and superintendent, which would not include employees covered by new contracts. These central office increases are around $2 million.

The remaining increase in expenses, about $25-30 million, can be attributed to the higher cost of the district’s teachers and educator support professionals labor contracts, settled and ratified this spring. Minneapolis Schools Voices asked the district for the exact figure, but the district has not responded.

The district’s presentation of the revised budget on May 28 obscured the changes by presenting information that is not comparable between the March budget proposal and the May budget proposal. The district has also not shared details of the budget allocations for each school, as it typically does.

Minneapolis Schools Voices adjusted the March and May budget proposals so they are comparable.

These adjustments show the district will increase the amount of one-time funding it relies on from $67.5 million in the March proposal to nearly $94 million in the May proposal. This one-time funding represents 13% of the operating expenses proposed for next year.

Using one-time funding to pay for ongoing expenses indicates a structural budget imbalance. To resolve this imbalance, the district would need to further reduce its expenses, increase its revenue or both.

In November, the district will ask voters to approve an additional $20 million for the technology levy. If approved, the additional funding would allow the district to shift funds it currently uses to pay for its information technology department to other uses.

Approval of the technology levy on its own is not enough to remedy the structural budget deficit in the 2025-26 school year. Under the revised budget proposal, the district will use nearly all of its assigned general fund balance to balance the 2024-25 budget. The district will not have these one-time funds available in the 2025-26 school year to balance its budget.

Assigned fund balances can only be used for specific purposes designated by the superintendent or the school board. Fund balances are the result of revenues exceeding expenses. The unspent revenue accumulates as a fund balance until it is spent.

There is higher revenue and more reserves in the revised budget

The revised budget proposal shows $17.6 million more general fund revenue for next school year than what the district proposed in March, but just $9.3 million of this is actually new revenue. The rest of the additional funding is coming from the general fund balance, according to information shared with the board on May 28.

In the March budget proposal, the fund balance was included separately from revenue. To be consistent, the chart below shows the additional additional reserves separately from revenue, as well.

Comparison of March and May Budget Proposals

Minneapolis Schools Voices analysis of data from MPS provided in the March 19 finance committee meeting and May 28 committee of the whole meeting. The shaded boxes indicate where changes were made so that the March and May proposals are comparable.

The district says that the $9.3 million in new revenue is made up of $5 million in additional State revenue for homeless and highly mobile student transportation, and $4.3 million in additional State “Achievement and Integration” revenue. Minneapolis Schools Voices has asked the district to clarify why this funding wasn’t known to the district in its original budget proposed in March and has not heard back at the time of publication.

Changes to school funding is obscured by a shift of programs to the the district’s central office

The district’s presentation on May 28 shows funding to schools increased by $2.7 million compared to its March budget proposal. The district also shifted two programs out of the schools budget to the central office budget, which means the March and May budget figures are not comparable.

Early childhood special education and the Minneapolis Academy and Career Center programs were included in the March school allocations i budget  for $9.5 million. In the revised budget, these two programs account for $10.9 million in the central office department budget.

Comparing the same programs from the May proposal to the March proposal, funding to schools increased $13.4 million, about 4% of the total budget for schools. The district did not provide its typical school allocation spreadsheet with details about which schools saw funding increases at either the May 21 finance committee meeting or the May 28 committee of the whole meeting. The detailed school allocations have also not been published with the meeting materials for the June 11 board meeting.

The district’s spreadsheet for its central office budget indicates that its budget has increased by $29.4 million since March. The shift of early childhood special education and Minneapolis Academy and Career Center from the school budget to the central office budget accounts for $10.9 million of this increase. This means the central office budget has only increased by $18.5 since the March budget proposal. It is not clear what the $18.5 million is for.

Additional budget cuts obscure overall changes to central office budgets

The district has also undertaken additional budget cuts at the central office, a combination of reductions in staff and eliminating some contracted services. The district says it cut an additional 23.5 full time equivalent employees.

Twenty of the positions cut are school custodians funded through the central office budget. The district has not shared why they chose to cut the custodial staff or how much was saved from the staff cuts. The district did say, on May 28, it was saving $1.6 million by eliminating some contracted services in its Information Technology, Finance and Human Resources departments.

The departments with the largest budget cuts compared to the March budget proposal

The athletics department was cut by 7% saving $259,000.

The student support services department was cut by 4% saving $1.4 million. This includes a 20% cut to the homeless and highly mobile student supports for $393,000, a 12% cut to a low-income education program GEAR Up for $324,000, and a 7% cut to Emergency Management and Support Services for $265,000.  The guidance and counseling services budget was increased by 6% for an increase of $114,000 and the budget for mental health supports was increased by 13% for an increase of $145,000.

The information technology department was cut by 4% saving $1.4 million. Specific reductions included a 4% cut to the department’s administration for $950,000, a 30% cut to design and training for $355,000, a 10% cut to the IT solutions center for $28,000 and a 10% cut to IT service management for $105,000.

The academics department budget was cut by 4% saving $765,000.

Finance, human resources and special education department budgets saw significant funding increases

While the district has made cuts to central office budgets, other departments have seen funding increases. Several employees in the central office, including  human resources, academics and special education, are covered by the new contracts with the Minneapolis Federation of Teachers, which likely accounts for some of the increased budgets for these departments.

The administration budget, which includes the school board and the superintendent’s office, was increased by 28% for $565,000. This includes an increase in funding of $258,000 to the Office of the Assistant to the Superintendent and Board.

A 34% increase to the finance department budget for $6 million includes cuts within the department. The payroll budget was cut by 47% for $687,000, the procurement budget was cut 81% for $704,000, the risk management budget was cut 7% for $420,00 and budget operations was cut 24% for $200,000.

The human resources department budget increased by $103,000 but its administration budget was cut 58% for $310,000. Additional cuts include a 20% or  $500,000 cut to the department’s information systems budget, and a 61% or $7 million cut to teacher development.

There is a stand-out 986% budget increase of $758,000 to employee and labor relations.

The early childhood department’s budget was increased by 15% or  $1.2 million.

The budget for contract alternative schools was increased 262% for $4.5 million. This reverses the majority of the significant cuts that were proposed for contract alternative schools compared this school year.

The overall central office budget for special education increased 40% or by $15 million since the March budget proposal. Most of the increase came from the shift of the early childhood special education program from the school budget to the central office budget.

Additional increases to the special education budget include a 14% or a $1.2 million increase to early childhood special education, a 7% or $132,000 increase to adaptive physical education, and a 7% or $436,000 increase in funding for occupational and physical therapists. The administrative special education department budget increased by 19% for $2 million, and the special education monitoring and compliance budget increased 15% for $90,000.

Cuts were also made in the special education department budget including a 38% cut to the special education assistant substitute pool, otherwise known as the SEA Cadre, for $260,000, and an 11% decrease to the clerical budget for $85,000.

The 2024-25 district budget will be voted on by the Minneapolis Public Schools Board of Education on June 11 at 5:30 p.m. The meeting is at the John B. Davis Center at 1250 West Broadway Ave. and is open to the public. People can also watch the meeting live and recorded on Eduvision.