Superintendent warns $1.1M-plus funding gap; district trims central-office roles to protect classrooms

Superintendent Dr. Laurie Putnam presented a preliminary budget forecast for the 2025–26 school year to the St. Cloud Area School District board on May 7, warning that several state and policy changes threaten the district’s general fund and outlining staffing and program adjustments already made.

“Most of our revenue — 85% — is tied directly to state allocations,” Dr. Putnam told the board. She said three near-term budget pressures — the expiration of one-time READ Act literacy aid ($370,000), ongoing unfunded unemployment insurance costs (about $250,000) and the governor’s proposed change to the compensatory revenue formula (projected loss of $485,000 under the initial proposal) — together represent more than $1.1 million in reductions or underfunded obligations.

“That underscores the importance of grounding our staffing and budgeting in conservative, transparent assumptions,” Dr. Putnam said, explaining why the district made early reductions when staffing for 2025–26.

To address the initial $620,000 gap from the READ Act expiration and unemployment underfunding, the district implemented central-office and enrollment-based staffing reductions, Dr. Putnam said. Key changes described to the board included elimination of five central office positions (executive director of special projects; director of learning and teaching; two learning-and-teaching coordinators; district truancy and attendance coordinator), consolidation of special-education leadership into a single executive-director position, reduction of the communications director to a 0.7 FTE and enrollment-based classroom reductions of 2.5 FTE.

Dr. Putnam also said the governor’s compensatory revenue proposal — described by district staff as a version of “hold harmless” that would still reduce funding for St. Cloud — was projected to reduce compensatory revenue by $485,000 and that the district already planned for a district-wide reduction of 6 FTE tied to lower compensatory allocations. The governor, House and Senate proposals differ; the district’s analysis showed the Senate compensatory approach could result in a larger decrease of more than $1.1 million for the district compared with current law.

“Under his plan… our district would experience a $485,000 reduction compared to current law. That's a significant shortfall,” Dr. Putnam said, adding compensatory revenue funds interventionists, multilingual teachers and student support staff.

The presentation also called out additional pressures: an estimated $600,000 employer cost in fiscal 2026 for the state’s paid-family-leave payroll tax (0.88% beginning Jan. 1, 2026), a conservative 5% assumed reduction in certain federal Title allocations driven by decreased free-and-reduced-price counts under universal free meals, and about $350,000 in one-time local costs such as special assessments and a special election.

Special education growth is a major ongoing factor: the district reported an 8.9% increase in students receiving special education services between 2023–24 and 2024–25 — about 251 additional students. To meet rising service needs, the district reallocated 7 FTE from compensatory holdbacks and added 6 new FTE funded from projected special-education revenue, Dr. Putnam said.

Board members praised the district’s transparent approach and asked the administration to provide concise materials for community outreach. One board member asked whether the presentation could be shortened to a short screencast for parents and community members; Dr. Putnam offered to produce a condensed screencast and to post materials to the district website.

The board legislative committee also sent a letter to area legislators warning of the local impact of proposed hold-harmless changes to compensatory revenue and proposed cuts to school library aid; the administration urged community advocacy as the Legislature finalizes funding decisions.

No formal board votes were recorded during the presentation; Dr. Putnam said staffing decisions were made administratively to protect classroom instruction and that the budget will return to the board for approval in June.