$28 million deficit looms for Minneapolis schools

As school districts throughout Minnesota and the state government grapple with budget shortfalls, officials with the Minneapolis public schools announced Friday that they expect their budget to be short $28 million for the upcoming school year.

The announcement came a day after the state announced a $5.2 billion deficit of its own and Gov. Tim Pawlenty warned that the K-12 budget -- long considered to be off-limits -- will be rebuilt "from zero."

Superintendent Bill Green said the volatile economy has affected Minneapolis schools' budget in much the same way that it's altered personal and institutional budgets around the world. District investments have shed about $4 million in recent months.

"We are increasingly concerned about our ability to provide a world-class education under incredibly challenging financial conditions, but our focus remains on our students' needs and our strategic plan priorities," Green said Friday.

News of the shortfall comes on the heels of the district's $60 million-a-year levy victory last month. City voters approved it with 71 percent support. But the district said those funds are only a small part of its overall budget.

The Minneapolis School District, the third largest in the state, with about 32,500 students, has an annual operating budget of about $500 million. Its debt, food and community education services funds amount to roughly $197 million beyond that. If the cuts materialize, the 2009-10 school year will be the eighth consecutive year of budget cuts for the district.

District officials reached the $28 million figure based on enrollment projections, staff costs and the assumption that state aid won't increase given Minnesota's grim economic forecast. Minneapolis cut about $20 million or more from its budget each school year between 2001 and 2006 and closed several schools. Many of them are now up for sale.

Last year Minneapolis school board members approved a five-year strategic plan aimed at boosting overall achievement and disproportionately low test scores at many of the city's high-poverty North Side schools.

Deficit had been anticipated

Green said the impending financial challenges will not derail its effort to implement reforms.

Minneapolis schools officials had anticipated a $22 million deficit next year even with success at the polls, but the harsh economic situation made things worse.

Twin Cities school districts, which are now beginning to put their 2009-10 budgets together, began revising their revenue projections downward even before the state's dire economic forecast was released Thursday. Most are now budgeting under the assumption that the state will give them no increases over the next two years.

How to stay status quo

Anoka-Hennepin -- the state's largest district, with 40,500 students -- has discussed having to come up somehow with $15 million more to keep the schools at status quo spending and avoid cuts next year. St. Paul officials anticipated a $16 million shortfall for the 2009-10 school year in September. St. Paul is the state's second-largest district, with about 38,000 students.

Despite some districts' early projections, school boards are often flying blind at this point in the budget process. Nobody knows what legislators will decide to do. Another state economic forecast comes late in the winter. School districts also often watch Pawlenty's proposed budget, which is still yet to come, for signs of what their estimates should be. There are often surprises. Last year, for instance, legislators came up with an unexpected 1 percent raise in school funding.

Staff writer Emily Johns contributed to this report.