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Metro area school districts face significant budget shortfalls

More than $93 million in combined budget shortfalls projected for the 2020-21 school year

SAINT PAUL — A new survey of 41 school districts that are members of the Association of Metropolitan School Districts (AMSD) projects combined budget shortfalls of more than $93 million for the 2020-21 school year. The survey assumes the Legislature will not provide additional funding during the 2020 legislative session.

The majority of school district funding is provided by the state Legislature supplemented with federal aid and local operating referendums. Seven AMSD member school districts had successful operating referendums last fall. By law, school districts may not operate with deficits so many districts are already engaged in budget discussions and considering cuts to programming, staffing, or both.

The projected shortfalls are not a surprise according to AMSD Executive Director Scott Croonquist. “A survey conducted last spring showed a majority of our member school districts would face budget shortfalls under a 2 percent formula increase – the amount approved during the 2019 session,” noted Croonquist. Several AMSD superintendents testified last legislative session that increasing the general education formula by 3 percent was the minimum level needed to keep pace with projected cost increases.

In addition to the basic funding formula failing to keep pace with inflation, major shortfalls in the special education and English learner programs continue to challenge school district budgets. The special education funding shortfall, known as the cross-subsidy, was nearly $437 million for AMSD districts in FY 2018 and $690 million statewide. The shortfall in the English learner program was more than $79 million for metro-area school districts in FY 2018. School districts are forced to redirect funds meant for general instruction to cover these shortfalls.

AMSD is calling on state policymakers to stabilize the education funding system during the 2020 legislative session by linking the funding formula to inflation, addressing the shortfalls in the special education and English learner programs and providing school safety and mental health funding.