Deficit grows as economic picture worsens
As the state and national economic picture continued to worsen in December, Minneapolis Public Schools (MPS) was projecting a larger budget deficit next school year.
Declining enrollment, losses on district investments and flat state funding were projected to grow the district shortfall to $28 million in the 2009–2010 school year. That was significantly larger than the $20 million shortfall MPS Chief Financial Officer Peggy Ingison previously had predicted.
The shortfall amounts to about 5 percent of the MPS budget, the district reported.
Instead of making across-the-board cuts, district leaders indicated they would examine closely how funds are allocated to schools. Funds currently are allocated based on class size.
The budget projection relies on no increase in personnel costs. Salaries and benefits make up about 80 percent of the budget.
District leaders previously anticipated a 2 percent increase in state funding for next school year. Based on the recent state economic forecast, that funding is now expected to remain flat or even decrease, the district reported. The district also reported a $4 million loss in investment earnings.
Voters approved a $60 million public school referendum in November. Those funds, though, were committed to specific educational priorities and cannot be used to make up the shortfall.
The Minneapolis School Board began the 2009–2010 budget planning process this month and was expected to have a general budget outline in place by February or March. The board will vote to adopt a budget in June.