Fiscal Year 2024 Budget Planning

$4.0 million equals 2.98% of the 2022-2023 General Fund total of $134.0 million. In the 2023-2024 fiscal year $4,000,000 would represent between 2.20-2.50% of the budget.

Unless a dramatic shift occurs to the way public school districts are funded in Minnesota, expenditures will likely always increase at a rate greater than revenues. This means that each year, unless program efficiencies or cost reductions occur, there will be some budget gap. The degree of the shortfall can vary due to a myriad of factors. The primary driver of the district’s shortfall is the fact that public education in Minnesota is perennially underfunded (see chart below). The average funding increase over the past 9 years is just over two percent (2.06%), not keeping up with inflation or reasonable increases in program costs and staff compensation. As a result, if all things were to stay the same, there would be a shortfall every year moving forward. Moreover, because conservative increases in expenses are more than the state’s modest 2.00% increase in funding, the gap will continue to widen as it has for several years. For instance, if action is not taken now, it is anticipated that the $4.0 million dollar shortfall would become a $6.6 million shortfall two years from now.

In addition, there are federally and state-mandated programs that receive no funding at all. If the state indexed the basic education revenue model to inflation, and fully funded mandated programs, the district would receive an additional $20 million in the first year of funding, wiping out our budget deficit entirely in one year.

The fund balance is the residual value of the district’s revenue less expenditures over time. It can also be viewed as the district’s “retirement account”. As of July 1, 2022, the district’s unassigned fund balance was $8.1 million, which equals 7.4% of its general fund expenditure.  Our school board’s policy is to maintain the fund balance at a minimum of 6.0% of expenditures.  Using fund balance to compensate for the projected shortfall would bring our balance significantly out of line with board policy and deplete our fund balance to a dangerous level, jeopardizing our ability to make payroll, perform essential district functions and plan for unexpected emergencies. Using the prior example, it would be similar to using funds an individual has set aside for retirement to pay for current, ongoing expenditures.

Edina is one of only three school districts in Minnesota, and 93 out of about 16,000 school districts in the country, that have a Aaa credit rating from Moody’s Investor Services. As with personal credit, our credit rating determines the interest we are charged for debt - the stronger the credit rating, the lower the cost to borrow. We consider maintaining a Aaa credit rating to be one of our primary ways we define excellence in financial stewardship of district resources.

The number one priority through the BRRRG process has been to maintain existing class sizes and existing programming. We have, and always will, prioritize providing an excellent education to all of our learners. Doing so requires us to prioritize retaining and attracting highly qualified teachers and staff.

As we work to balance our budget, teacher retention and recruitment is a top priority. The proposed budget anticipates a 4.03% budget increase for salaries and benefits (of all positions, not just teachers) next year.  

Effective retention and recruitment strategies, however, are not limited to compensation alone. The district is actively working to promote staff wellness. The district has established a wellness committee devoted to enhancing the well-being of our staff through special events and support. It is implementing creative and supportive ways to elevate staff morale and health.

While the proposed budget does build in salary increases, we as a district also try to create an inclusive culture in which teachers and other staff feel valued, supported and accepted, both as professionals and individuals. Further, the district is confident that it is extremely competitive with its peers, and also leads in some employee classifications.

New programming and innovation is part of our district’s commitment to excellence and developing well-rounded future citizens. Our community expressed an interest in more language and STEAM options during our strategic planning process. The development of the Spanish Dual Language program at Countryside, and embedded STEAM programming throughout the district, is in response to that feedback from the community and programs we believe in deeply.

Capital expenditures to expand programming at Countryside are paid from lease levy authority that cannot be used for on-going expenditures such as teacher salaries or classroom materials.

Students are admitted to a district through Open Enrollment when the district has extra capacity above and beyond its ability to serve resident students. Open enrollment allows the district to efficiently use the educational space within our system, creating the financial sustainability that allows us to maintain all of our schools and programs.

It is the view of our district that our vision to offer each and every student the opportunity to discover their possibilities and thrive at Edina Public Schools is extended to all students, including those with an Individualized Education Program. There are also federal and state mandates to provide students with Special Education support. We believe that students that have an Individualized Education Program deserve the support services that they receive. The Special Education budget will not be reduced.