This week, the Minneapolis Public Schools school board is voting on next year’s budget, which includes almost $100 million in one-time funding. To balance its budget in the 2024-25 school year, the district will need to make significant reductions in how much it spends.

Staffing costs make up nearly 80% of the district’s general fund expenses.  Realistically, balancing the budget will require reducing staffing in the district.

Presumably, whatever the board settles on as part of its plan for “school transformation” will encompass addressing its financial predicament. And while board members have acknowledged that the plan may involve closing or consolidating schools, public discussions have not addressed staffing, the district’s largest expense.

If the district does not make any changes to its operations, the district could fill its structural budget deficit by using its fund balance. Financial projects in the most recent pro forma memo describe that scenario, estimating the district would quickly deplete its reserves, and enter statutory operating debt in the 2025-26 school year. In statutory operating debt, the district would be subject to State oversight of its budget until it returns to fiscal solvency. To avoid State involvement, the district will need to take action sooner.

Of the district’s 6,200 full-time equivalent employees, according to its 2022 audited annual financial statement, about half of which are covered by the collective bargaining agreement with the teacher chapter of the Minneapolis Federation of Teachers.

Minneapolis Schools Voices analysis of data from Minneapolis Public Schools 2022 audited annual financial statements.

An additional 20% of full-time equivalent employees are covered by the collective bargaining agreement with the Educational Service Professionals chapter of the Minneapolis Federation of Teachers. Most other district employees are covered by other collective bargaining agreements. The proportion of district employees covered by each collective bargaining agreement has been stable over the past decade.

The district hinted at its need to reduce staffing levels in the pro forma memo from November 2022. Minneapolis Public Schools had 9.64 students for every licensed staff member, according to State data for the 2020-21 school year, summarized in the pro forma. The fifteen largest school districts in Minnesota, excluding Minneapolis, had 12.52 students for each licensed staff member. Comparisons to large suburban districts may not be appropriate because of differences in the students served.

In St. Paul, there were 11.28 students per licensed staff member during the 2020-21 school year. St. Paul serves larger proportions of students who qualify for free and reduced price meals and students who are English Learners than Minneapolis. Both districts serve a similar proportion of students who qualify for special education services. The ratio of students to licensed staff in St. Paul is consistent with how Minneapolis Public Schools was staffed in the 2013-14 school year, according to data in the district’s audited annual financial statement from 2022.

The difference of less than two students per staff member translates into approximately 450 fewer licensed staff members in 2020-21, if Minneapolis had been staffed similarly to St. Paul. This is equivalent to reducing licensed staff by around 15%.

From the 2020-21 school year to the 2021-22 school year, MPS district enrollment fell a further 7.6%. But, data in the district’s 2022 audited financial statements indicate no significant change in licensed staff, further shrinking the number of students per licensed staff.

As the ratio of students to teachers has declined in recent years, the same pattern holds for other groups of district employees, including principals and assistant principals, educational support professionals, and culinary and wellness employees.

In the 2015-16 school year, enrollment was around 36,000 students, the highest it has been in the past decade. In the upcoming school year, the district expects enrollment to be just over 27,000 students. The district’s pro forma anticipates further declines in enrollment in the coming years declining to under 23,000 students by the 2027-28 school year. Enrollment would need to increase around 50%, to 40,000 students, in order to remain financially sustainable without reducing its current operations, according to the district.

As enrollment declined, the district avoided reducing staff by using one-time pandemic relief funds. Maintaining staff with pandemic funds was an explicit priority for the district. While the current board’s public discussions about “school transformation” have included some comments about closing or consolidating school buildings, those conversations have not included staffing levels.

In June 2024, the district will confront formulating a budget for the 2024-25 school year with little pandemic funding remaining. If that budget is balanced, as required by the State, and if it preserves the district’s financial sustainability, then it will incorporate a significant transformation of district operations compared to the budget proposed for the upcoming school year.