St. Paul school district projects budget deficit for fifth year

Voter approval of an $18.6 million-a-year ballot measure in November may not have been enough to help the St. Paul Public Schools avert a budget shortfall for 2019-20, according to projections presented to school board members Tuesday.

The district is estimating a $2.9 million general fund deficit for the coming school year, said Marie Schrul, the district's chief financial officer. Among the factors working against the district is one familiar to the shortfall-weary: declining enrollment.

Schrul said that the district expects a $6.9 million loss in state aid due to the probability of fewer students coming in the door.

The deficit would be the district's fifth in a row, but the district does have a potential savior in Gov. Tim Walz — specifically, his proposal to raise the state's bedrock per-pupil funding formula by 3 percent in 2019-20.

Board Member Steve Marchese noted that St. Paul is banking on a 1 percent formula increase, and that if the Legislature backs Walz's recommendation in full, the district could collect an additional $6.2 million — erasing the projected deficit.

"This would really be a major help," Marchese said.

Passage of last fall's levy proposal fueled hope that the district could avoid another round of slashing and trimming.

The district also has taken a slight hit on the current year's budget.

General fund expenditures are exceeding revenue by about $1.2 million, Schrul said, and the district's rainy-day fund is expected to drop from a projected $38.7 million to $37.3 million at school year's end.

Still to come this spring are proposed school-by-school budget allocations.

The board also heard Tuesday from an advisory group that examined the district's budget and expenditures.

Touching on what was acknowledged to be a "political hot potato," Peter Hendricks, a representative of the group, recommended that the district make participation in the Q Comp alternative teacher pay plan a priority.

But the St. Paul Federation of Teachers has declined to join the district in applying to the state for acceptance into the program. The union restated its opposition to Q Comp in a recent questionnaire sent to school board candidates.