Business services outlines budget process, enrollment as primary revenue driver

Chris Blackburn, director of business services for South Washington County Schools, presented a fiscal update focused on how the district builds the annual budget and the principal revenue and expenditure drivers the board should expect for 2025–26.

Blackburn said enrollment is the primary driver of state aid and noted the district expects a slight enrollment decrease in 2025–26 driven by a smaller incoming kindergarten cohort informed by recent birth-rate trends. He outlined the district’s cohort-survival method for enrollment projection and said kindergarten projections rely on historical birth-rate capture adjusted for district-specific patterns.

On the revenue side, Blackburn said state aid constitutes the largest share of general-fund revenue (roughly 69% in the current preliminary budget), with the basic formula (the district’s general operating aid) representing about 44% of total revenue. He noted state special-education aid is significant (roughly 16% of general-fund revenue) and described the aid’s complex census- and expenditure-based formula; he also cautioned the board that, absent legislative action, the state may prorate special-education aid (a 95% proration was cited as a working figure for current planning).

Blackburn reviewed expenditure categories and emphasized that salaries and benefits account for approximately 78% of the district’s general fund. He explained factors that change personnel costs year to year—including negotiated contract settlements, step and lane increases, retirements and employee benefit elections—and reminded the board that several collective bargaining units will be unsettled on July 1, creating negotiation-related budget uncertainty.

He described other expenditure categories (contracted services including transportation and utilities at about 15%, supplies and materials at about 4%, and equipment/capital at about 2%) and explained the budget timeline: revised budget next month, and preliminary/original budget in June. Blackburn flagged two new legal/tax items: summer unemployment costs that affected recent budgets and an upcoming paid family and medical leave payroll-tax program effective Jan. 1, 2026; he estimated the district’s minimum payroll-tax share could be about 0.44% of payroll under current state estimates.

Board members asked about the local levy cap and federal-revenue exposure; Blackburn said the district’s levy is currently several hundred dollars per pupil below the statewide cap and that federal funds (including food-service reimbursements) raise different timing and reserve considerations; he said food-service reserves provide short-term mitigation if federal revenues change. Blackburn said revised and multi-year projections help the district decide if more significant adjustments will be needed.