School board unveils $294 million budget

June 1, 2017 GMT

Additional funding for gifted and talented programming, cuts to 21 substitute teacher positions and about $2.3 million in reductions are on the horizon for Rochester Public Schools.

Those details were part of the $294 million budget proposal for the 2017-18 school year that was introduced Tuesday night.

News that Gov. Mark Dayton had signed the E-12 education budget bill came midway through the meeting, clarifying some of the budget discussions for the evening and solidifying a 2 percent increase in funding — more than the 1.5 percent increase the district budgeted for.

That will provide $573,000 more revenue than budgeted, according to John Carlson, director of finance, but the district is recommending instead of building that additional money into its budget that the money be saved to offset future deficits.

That decision whether to save, or use that additional money, will ultimately be made by the school board.

The district, which employs more than 2,500 people, is projecting about 17,800 students next year.

Cuts this year

Perhaps the biggest hit to the budget this year was out of its control — a $1.1 million reduction tied to a decrease in the number of students who qualify for free and reduced price lunch.

Last year, $10.3 million of the district’s budget was tied to the 37 percent of students who are low-income. RPS receives state “compensatory” funding that is to be spent at the buildings where the students are concentrated.

Many of the district’s principals are using the funds to pay for paraprofessionals; some is also being used to pay for social workers and instructional coaches.

After cuts for that were made at each building, the district said it didn’t want to ask principals to look further for cuts, so it cut another $1.1 million at the district level.

That resulted in the elimination of 21 “floating” substitute teachers that were employed at a specific school buildings, rather than called in as needed.

“Knowing that buildings had already cut a little over a million at their sites, we wanted to look at what are district reductions we can make,” said Superintendent Michael Muñoz said. “When you make reductions, you make them hoping that this reduction will have less of an impact than if you cut a teacher and had to increase class sizes.”

But with that cut, the district will channel an additional $250,000 to the hourly rate for substitute teachers, in hopes that it can remain competitive with other school districts throughout Southeast Minnesota.

Looking to the future

District leaders also touched on a looming budget deficit for the 2019 school year, and each year after that, according to this year’s budget.

Muñoz said saving some of the money from the Legislature’s 2 percent increase this year will help will future deficits.

“That’s going to make those two years a little less painful — a little less that you’re going to have to reduce,” Muñoz said.

But even with that savings, it is clear the district will have to make cuts at some point in the near future.

Beginning in 2019, the district will be able to dip into its budget reserve, but by 2021, it will be forced to make cuts. The district, because of school board policy, is required to maintain a 6 percent budget reserve, which is essentially a savings account.

“Take that with a grain of salt, a lot can change between now and 2021,” Carlson said.