On Friday, schools and administrative departments in Minneapolis Public Schools will see proposed budgets for next school year for the first time. The district had originally expected to share the information three weeks earlier, but has revised its budget process timeline. Last fall, the district warned that the 2024-25 school year budget will reflect a $90 million reduction of revenue because federal pandemic aid is expiring. The district’s operating budget is just below $700 million in the current school year.

Ibrahima Diop, senior officer of finance and operations, told the board on Feb. 12 that the final budget will include a reduction in the number of employees in the district.

“We will be making the necessary cuts at the central office, but schools will be impacted, too,” Diop said on Feb. 12. He later added, “We will do our best to limit the impact on schools, but everyone will feel the $90 million plus gap as we close that gap.”

Dr. Lisa Sayles-Adams echoed Diop’s words at the Feb. 22 finance committee meeting. She told the board she wanted to begin her new role in time to influence the budget for next school year, given the significant cuts the district will make.

“It does no one any favors to pretend that this won't be too difficult. We always do what we can to minimize the impact of budget reductions on students and learning. But we are operating within many parameters and restrictions by both funding sources and other programmatic and operational requirements and restrictions,” Sayles-Adams said.

According to the district’s new budget timeline, the proposed budget will be shared with the finance committee on March 5 and 19, and the full school board will review the budget on March 26 at its Committee of the Whole meeting. Finance committee meetings are open to the public, but they are not recorded or streamed. Committee of the whole meetings are open to the public, and are recorded and streamed.

Once principals have their budgets, they will begin to allocate funds to staffing and programs for their school for next year. This process is called budget tie out, and ends on March 15. Many schools will host a site council meeting during the budget tie out process where parents and community members can provide input into the school’s budget.

The current school year budget includes $31 million in new State aid. State aid will increase an additional $10 million next school year. Although historically large, the increase in State aid is not enough to offset the expiring one-time federal pandemic aid.

The district has used almost all of the $260 million in pandemic aid to fund its ongoing operations, as enrollment and the associated funding have declined in recent years. The main exception to this has been the addition of 400 positions for teachers and educational support professionals this year as part of the intervention triad program. The budget for the intervention triads is $29 million this year. Those positions are being funded with the portion of pandemic aid the district was required to spend on “learning loss.”

General fund revenue next year is expected to be $613 million, $9 million more than projected in the district’s pro forma from December. 2023. Thom Roethke, executive director of budget and planning, told the school board’s finance committee on Feb. 22 that the increase in revenue is because of more new to country students than expected who have enrolled in the district this year.

Roethke told the finance committee that next year’s budget will include the use of $30 million from the district’s assigned general fund balance. The district has increased its general fund balance in recent years using some of the pandemic aid. Although the district does not have a policy for its assigned general fund balance, the school board’s policy requires an unassigned general fund balance between 8-13% of general fund expenses.

The budget process is unfolding while the district remains in negotiations with the teachers and educational support professionals represented by the Minneapolis Federation of Teachers. Teachers have asked the district for salary increases of 16% over the two years of the contract, which the district estimates would cost $92 million over the two years of the contract. The district estimates the teachers’ proposal would widen the budget gap from $90 million to $134 million next year.

On Feb. 22, the district presented a counter proposal to teachers offering salary increases of 5% over the two years of the contract. The district estimates their proposal would cost $42 million over two years, and would add $10 million more to the budget gap next year. The district made its proposal contingent on the union accepting the district's proposals to reduce the number of school days and shorten the internal hiring process, as well as the union dropping all of its other proposals.

The Minneapolis Federation of Teachers requested mediation from the State Bureau of Mediation Services on Dec. 19, 2023. The first meditation session is scheduled for Feb. 29. Bargaining is usually closed to the public during mediation, and there is limited information released to the public.

By law, teachers must wait 30 days after mediation begins to file an intent to strike notification. The district and union must continue to negotiate in mediation for ten days after the intent to strike notification before teachers can begin a strike. This would put the earliest day for a strike around the time students and teachers return from spring break in early April. Mediation often leads to contract settlements without a strike. Recently, both Anoka-Hennepin and Rochester have settled contracts during mediation.

Educational support professionals in Minneapolis are represented by a separate chapter of the Minneapolis Federation of Teachers. Their chapter has not filed for mediation. The ESP chapter has asked for 30% wage increases over the two years of their contract, additional vacation days, and lower health insurance premiums.

The district countered with a proposal to increase ESP wages by 5% over the two years of the contract. Alicia Miller, interim senior officer of human resources, said during bargaining on Feb. 15 that the district’s proposal would increase the budget gap for next school year by “millions of dollars.” The district did not share an exact dollar amount.

The district and ESPs are not currently scheduled to meet again for bargaining until March 21. Both Miller and Catina Taylor, president of the ESP chapter, said at the Feb. 15 bargaining session they would try to find an earlier time to meet.

Additional reporting by Melody Hoffmann