Shakopee board adopts FY26 budget, directs two-question levy and $3 million in cuts

The Shakopee Public School District Board of Education on June 23 approved the district's fiscal year 2026 budget and voted unanimously to place a two-question operating levy on the Nov. 4, 2025 ballot while also recognizing $3 million in permanent expenditure reductions for fiscal 2026'27.

The action matters because the district projects continued enrollment decline and a structural gap in future years: the adopted FY26 budget projects $167.3 million in revenue and $174.0 million in expenditures, leaving a one-year use of reserves and a forecasted $7 million to $9 million shortfall for 2026'27 without additional action.

Director of Finance and Operations Bill Nazzi presented the budget materials and told the board the document reflects a set of assumptions about enrollment and revenues. "I feel like the numbers on this document are numbers that can't be relied upon for financial decisions and recommendations moving forward," Nazzi said during the presentation as he summarized revenue and expenditure projections and the district's plan to hold a roughly 10% unassigned fund balance.

Board members debated options for closing the multi-year gap. The motion the board approved sends two ballot questions to voters: Question 1 is a "tax-neutral" operating levy intended to replace expiring bond-related taxes and generate roughly $5 million in new annual operating revenue (about $620 per pupil, estimated); Question 2 would be contingent on approval of Question 1 and would raise an additional estimated $2.3 million (about $288 per pupil) and would move the district closer to its statutory levy cap. The board also recorded that it will implement $3 million in permanent expenditure reductions for 2026'27 regardless of the levy outcome.

Board member Peterson moved the levy motion; Smith seconded. The board voted unanimously in favor. Later in the meeting the board moved, seconded and approved the FY26 adopted budget as presented (motion by Aldrich; second by Brophy). "If question 1 passes and question 2 doesn't, we have to figure out how we're gonna attack that 27'28," Nazzi said in discussion, stressing that out-year gaps remain even with partial levy approval.

The budget document includes a budgeted enrollment of 7,457 students for 2025'26 (a decrease of 82 students from the prior year), a general fund revenue decline of roughly $728,000 (0.5%), and a projected 3.9% increase in general fund expenditures (about $5.26 million) driven largely by salary, wages and benefits. The presentation also noted a one-time spend-down of restricted and assigned balances to help preserve the district's 10% unassigned fund balance in FY26.

Next steps: the board approved moving final ballot language and other election formalities forward to the July 28 meeting. If the board proceeds, voters will see Question 1 and Question 2 on the Nov. 4, 2025 ballot; exact levy dollar amounts will be finalized once the Minnesota Department of Education confirms levy caps and inflation indexing later this summer.

Votes at a glance: - Adopt FY26 budget (motion: Aldrich; second: Brophy) — outcome: approved. - Place two-question operating levy on Nov. 4 ballot and recognize $3 million in permanent expenditure reductions for 2026'27 (motion: Peterson; second: Smith) — outcome: approved unanimously.

The board chair closed discussion by thanking staff for the multimonth budget process and noting further work this summer on detailed expenditure reductions and ballot language.