Bigger classes, program cuts: Making sense of the Minneapolis Schools budget deficit
Minneapolis Public Schools faces a $110 million deficit which may mean bigger class sizes and budget cuts to some language programs. The Minneapolis Public Schools is facing a $110 million budget shortfall, with both Minneapolis and St. Paul facing deficits of more than $100 million. The district's plan involves cutting 115 teaching positions, half of which will be elementary school specialists. Staffing cuts across the board will result in fewer teachers and larger class sizes in schools where fewer than 70% of students are eligible for free or reduced price lunch. The proposal also includes $46 million in cuts to direct school allocations, $29 million to support math and reading, and $1.5 million to cut costs of fifth-grade band contracts. School boards will vote on their 2024-25 budgets in June.
Published : 4 weeks ago by Becky Z. Dernbach in Finance
The rollout of proposed budget cuts to address a $110 million budget shortfall at Minneapolis Public Schools has left many parents and teachers stunned and saddened.
“Nobody wants this,” said Collin Beachy, the school board chair, in a March 19 finance committee meeting where the district presented its plan for extensive cuts.
Lindsay Turner, a Minneapolis Public Schools parent and organizer with TakeAction Minnesota, said in a Tuesday news conference that she was heartbroken and angry. Her child, who will be in fifth grade next year, will no longer be able to take band or Spanish.
“I am heartbroken because my kid is internalizing the idea that the things that make school joyful and challenging and connected and safe are things that they do not deserve and cannot count on,” Turner said.
Budget shortfalls are common among school districts in the metropolitan area this year—70% of districts face gaps, according to the Association of Metropolitan School Districts—but they are particularly large in Minneapolis and St. Paul, which both face deficits of more than $100 million.
Though the Legislature approved a major increase to state education funding last year, school leaders say it was not enough to make up for decades of underfunding. Now, just months after the new state money has arrived, federal COVID funds are set to expire. And the loss of the federal COVID funds far outweighs the new funding from the state.
St. Paul Public Schools is facing a budget deficit of $107 million. In budget documents posted online before a Wednesday board meeting, the St. Paul district outlined its plans to cut 115 teaching positions. Half of these positions will be elementary school specialists, who provide classes like music, art, technology, dance, or theater. St. Paul Public Schools said it would release more information about budgets and cuts later in April. For both Minneapolis and St. Paul, these cuts represent proposals, not final decisions; the school boards will vote on their 2024-25 budgets in June.
As I’ve been reporting on the impacts of the cuts to specific language programs at Minneapolis Public Schools, I’ve heard from parents and teachers who tell me about other cuts at their schools. And I’ve heard a lot of questions: Why is this happening? How did we get here? And what will it mean for my school?
So here’s your Sahan Journal guide to the Minneapolis Public Schools budget shortfall.
What will the budget cuts look like at my kid’s school next year?
Staffing cuts across the board will mean fewer teachers. And that will mean larger class sizes.
The district is proposing that class sizes increase by three students in schools where fewer than 70% of children are eligible for free or reduced price lunch, Ibrahima Diop, the district’s finance and operations officer, said in a recent school board meeting.
That means the district is planning for classes of 27 kindergarteners, 31 fourth-graders, 35 sixth-graders, and 36 high school freshmen.
At schools where more than 70% of students are eligible for free and reduced price lunch and other educational benefits, the district is proposing to keep class sizes the same.
You can find out the percentage of students eligible for free and reduced price lunch at your school using this tool from the Minnesota Department of Education.
What other programs and positions will be cut?
The current proposal plans $46 million in cuts to direct school allocations. The bulk of those cuts—$29 million—will be to intervention teams designed to provide extra support for math and reading in the wake of the pandemic. Some of those interventionist positions will now be centrally funded, concentrated at schools with most academic need. But many will be eliminated altogether.
Classroom teachers will be cut, too. At Emerson Dual Language School, for example, the district has proposed eliminating four classrooms: one each in kindergarten, first, second, and third grade.
At elementary schools with fewer than 425 students, assistant principal positions will be eliminated.
World languages will also be cut from the district budgets from K-8 schools. Some schools may still fund these teachers with their discretionary funds.
One controversial proposed cut: fifth-grade band, which district officials estimate costs $1.5 million this year.
The district also plans to eliminate its school-based mental health community partner contracts, which embed therapists in school buildings. In October, researchers found that suicide attempts declined by 15% at Hennepin County schools that implemented school-based mental health programs.
Now, this program is on the chopping block. Minneapolis Public Schools has said it plans to eliminate these contracts. The district estimates eliminating these contracts will save $1.8 million.
Let’s back up. A $110 million budget hole? How did we get here?
Minneapolis Public Schools was already facing budget deficits before the pandemic and confronting difficult decisions about staffing cuts.
In 2018, as the district faced a $33 million deficit, Diop pointed to years of rising costs, particularly for English language learner and special education programming, while enrollment had been dropping. In other words, expenses were outpacing revenue—much the same as Diop’s message today.
Then, the COVID-19 pandemic happened. Congress responded by passing a series of rescue packages that provided a rare infusion of federal funds into public education. For Minneapolis Public Schools, that meant an extra $259 million to spend between March 2020 and September 2024, according to district budget presentations.
But now that money is running out. And over the past four years, enrollment declines accelerated, as Minneapolis Public Schools confronted one tumultuous event after another: the COVID-19 pandemic; a major school redistricting plan; the murder of George Floyd and subsequent uprising; and a three-week teacher strike. On top of all that, inflation has pushed up costs.
$110 million is a big number. Can you help me understand what that means?
Last year, Minneapolis Public Schools had an operating budget of $755 million. So a $110 million shortfall is about 15% of the total operating budget.
So does that mean they are cutting $110 million?
No. The district has proposed $47 million in expense reductions, or cuts. But Diop has said that increases in costs have offset much of the reductions. For example, he said, district transportation costs for expenses like school buses have risen from about $59 million to $73 million. And that has meant that even more reductions are necessary.
So while the district is cutting a net $47 million in expenses, that number masks the cost increases to items like transportation and liability insurance. Taking increased costs into account, the dollar amount of cuts would be even higher, though in a recent school-board meeting Diop could not say by how much.
So where is the rest of the money going to come from?
Officials intend to close the rest of the gap by spending $55 million in reserve funds and saving an additional $13 million through unfilled vacancies. The district currently has a vacancy rate of 8%, which has allowed it to save some money, but next year expects a much lower vacancy rate of 2.5%. Since the district plans to eliminate jobs, it anticipates fewer vacancies for the jobs that remain.
The reserve fund is like a savings account. Much of the balance comes from money the district set aside during the pandemic.
“We knew that this was coming,” Diop said in a recent school board presentation. “So setting money aside allowed us to use more than $30 million to close the gap as much as we can.”
What’s important to know, though, is that the saved funds represent one-time money. When these funds are gone, they’re gone—the district won’t be able to use this source in next year’s budget. The $55 million investment represents a near exhaustion of multiple sources of reserve funds. So, Diop warned, changes would need to come before the 2025-2026 school year.
What will those changes in the 2025-2026 school year look like?
One positive change, hopefully, will be increasing revenue. Minneapolis Public Schools plans to ask voters for a property tax increase to help pay for technology. Minneapolis voters will have the opportunity to approve or reject this technology levy at the polls. The district hopes that levy will bring in about $20 million in new funds annually.
But other changes are on the way, too. The fund balance, Diop said, should serve as a bridge until the district can “transform to be operationally and fiscally sustainable.” The district has space to serve 40,000 students, but after years of declining enrollment, currently serves about 30,000. School board members have used the word “transformation” to describe a process that may include closing and consolidating schools.
In the annual statement that the district’s finance division provides to the school board and superintendent, finance officials emphasized that Minneapolis Public Schools has more in-use building space than any other district in the state. By student population, it is the state’s fourth-largest district. Minneapolis schools have on average smaller student populations than those in St. Paul, Anoka-Hennepin, Rosemount-Apple Valley-Eagan, and Osseo, the other districts among the state’s five largest. By spreading students among so many schools, finance officials said, the district is spending more than is necessary on costs like utilities, long-term facilities maintenance, and custodial services. Consolidating schools would also allow the district to save on costs for some staff like principals, it said.
Altogether, finance officials estimated that closing 22 schools would save the district $23 million annually.
So we’re doing massive budget cuts this year, and school closures next year? That sounds really painful. Why not just do them both at once?
Before Superintendent Lisa Sayles-Adams started her job on February 4, the district had been without a permanent superintendent for more than a year and a half. Superintendent Ed Graff left his post at the end of June 2022. The school board named Rochelle Cox to serve as interim superintendent for a year, and then extended her term. But at the same time, the school board told Cox not to make any major changes, Vice Chair Kim Ellison said recently in a meeting with the dual-language advocacy group Colectiva Bilingüe.
“I will say that the board can take some responsibility for this,” Ellison said.
Another reason the board has been putting off school closures: the district went through a controversial redistricting process just a few years ago. The school board approved that plan, the Comprehensive District Design, in May 2020, and it took effect in fall 2021.
At the time, district leaders said they anticipated the plan to fuel several more years of enrollment decline before ultimately drawing students back. But that plan was crafted before the COVID-19 pandemic hit, and it passed long before the pandemic’s impacts on school enrollment became clear. Minneapolis, meanwhile, found itself at the epicenter of a national racial reckoning. District leaders have pointed to the unrest following the murder of George Floyd as another reason that families with children left the city—and the district—in recent years.
Now, just a few years after the last redistricting plan passed, some Minneapolis students may need to change schools yet again.
“When you have school closings, there’s often redistricting that happens,” Cox, then the interim superintendent, said in an October talk sponsored by the nonprofit Achieve Twin Cities and the Graves Foundation. “And I worry about the Minneapolis Public Schools community being ready to go through that again.”
Any decisions to close schools would have to be made by the school board, and they have not yet announced plans to do so.
What does the teachers’ union say about the budget shortfall?
The Minneapolis Federation of Teachers and Educational Support Professionals issued its own report about how Minneapolis Public Schools spending compares to other districts.
The union’s report said that if Minneapolis Public Schools brought its spending on contracted services and district support services in line with its peers, and had not added 82 administrative positions, it could have saved $52 million in 2023.
Minneapolis Public Schools has said it plans to make cuts in contracted services and administrative positions as a response to community feedback.
“Yes, we’re calling for reprioritizing spending,” said Greta Callahan, president of MFT’s teacher chapter, in an April 2 news conference. “But we do need more money from the government.” Callahan said that schools have not recovered from decades of underfunding public education. And cutting programs that attract students to schools will not bring them back, she said.
In the news conference, the union and allied community organizations called on the district to develop a plan to attract and retain students and educators. Callahan also called on Governor Tim Walz, House Speaker Melissa Hortman, and Senate Majority Leader Erin Murphy to increase the amount of funds they plan to spend on education this year.
The Legislature passed a two-year budget last year, which means most of the 2024-2025 state funding has already been determined. Walz, Hortman, and Murphy reached an agreement to spend an additional $477 million this year. Of that amount, they agreed to allocate $43 million to public education throughout the state—less than half the deficit in Minneapolis Public Schools alone.
Meanwhile, contract negotiations continue for several bargaining groups, including the Minneapolis Federation of Teachers and Educational Support Professionals. The teachers and education support professionals staged a three-week strike in 2022. Both groups’ contract negotiations are now in mediation with the state. Teachers have been in mediation long enough that they are eligible to file to strike, if enough members voted to do so.
The district has said that any additional funds for settling union contracts would result in even steeper budget cuts.
What about the new money from the state?
Last spring, the Minnesota Legislature approved a historic increase in education funding. For Minneapolis Public Schools, that meant an additional $31.7 million during the current school year.
At a March 5 finance committee meeting, Sayles-Adams thanked the governor and Legislature for the recent increase in funding. “It’s hard to imagine where we would be without those additional ongoing resources,” she said.
But that’s not enough to close a $110 million deficit. And besides, the district also has to pay to implement some of the new programs the Legislature also passed into law last year. For example, the district estimates it will pay $4.3 million to implement the READ Act, which requires schools to use a literacy approach grounded in the science of reading.
Diop described the READ Act as an “unfunded mandate.” Some school advocacy groups like the Minnesota School Boards Association and the Association of Metropolitan School Districts have estimated that half of the new state funding must be earmarked for new programs.
What about the new immigrant students? Will they help with the budget?
After years of declining enrollment, Minneapolis Public Schools is now seeing an uptick in new immigrant students, predominantly from Ecuador. Though the district does not track students’ immigration status, Minneapolis Public Schools says it has welcomed 2,500 new students who speak Spanish as their home language since January 2023.
“Supporting these new students is an opportunity for MPS and helping them navigate a new school system aligns with our mission and vision of providing a high quality education to all students,” the district said in a statement to Sahan Journal.
But the district says it does not know yet how much federal and state revenue it will garner from its increased enrollment. Next year, the district anticipates spending $17 million on English language learner services beyond what the state pays for these services, senior academic officer Aimee Fearing said at a recent school board meeting.
The difference between the amount English language services cost and the amount the state pays for them is called a cross-subsidy. Though last year’s Legislature approved more funding for these services, the largest increases in English language learner funding won’t go into effect until the 2026-2027 school year.
“Historically, the amount we receive from the state is very little considering the cost to support the students and families,” Minneapolis Public Schools said in a statement to Sahan Journal. “Currently, the legislature is considering increasing the EL Cross Subsidy Reduction Aid, which will be helpful, but we won’t see the funding until next year, perhaps.”
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