St. Paul Public Schools is entering uncharted territory among Minnesota school districts with the setting Tuesday of an annual budget topping $1 billion.

The 2023-24 spending plan is likely to be the first such barrier breaker for a state preK-12 system and features not just a hefty infusion of state and federal aid but also taps $34.4 million in district rainy-day funds.

"Our young people deserve every penny," Superintendent Joe Gothard told school board members at the board's monthly meeting Tuesday.

Gothard acknowledged some people would find it difficult to believe that a district receiving a record amount of revenue also must dip into its fund balance.

But he said state funding of schools has lagged behind inflation for the past 20 years, "and it's going to take more than one biennium to catch up and close that gap."

With federal pandemic aid due to sunset in the fall of 2024, the state's second-largest district, at about 32,300 students, is electing to maintain programs aimed at righting the ship on achievement while also investing in new initiatives such as the opening this fall of a new East African elementary magnet school — at a cost of $3.5 million.

Earlier, the district designated $1.3 million in reserve funds to fill high-demand special-education vacancies. Executive Chief of Human Resources Patricia Pratt-Cook reported Tuesday that 52 of 70 available hiring bonuses of $10,000 had been awarded.

She added a related offering of $4,000 bonuses for other job categories has found fewer takers.

Jackie Turner, executive chief of administration and operations, also announced the district is restoring yellow school bus service to Harding High and Washington Technology Magnet School after students were diverted to Metro Transit in 2021 due to a driver shortage.

Gothard said: "I really want to work and help students develop positive routines ... and a yellow bus is a pretty important part of that."

Opinions differed, however, on the district's approaches to safety and its efforts to instill in students a greater sense of belonging.

Board Member Chauntyll Allen, who has favored restorative approaches to student discipline, questioned the district's planned emphasis on hiring additional student-friendly security personnel and replacing outdated security cameras.

If the schools do not devote more attention to creating a restorative mindset, Allen said, "we will continue to have negative outcomes."

Board Member Uriah Ward, who is in his second year, said he was frustrated by an inability to amend the budget and perhaps erase specific cuts. In the end, the board voted, 6 to 1, to approve the $1.035 billion spending package, with Ward dissenting.

In the coming months, the district is expected to lay out plans to engage citizens in the budget process. Hard decisions await on programs to prioritize when federal COVID relief money runs out, officials say. A reading initiative that has drawn praise, for example, switched in the past year from one expiring federal funding pot to another.

St. Paul now also has a less robust rainy-day fund. The projected $34.4 million drawdown in 2023-24 is expected to bring the unassigned fund balance to $41.7 million, near the edge of what the board requires for emergency purposes.