St. Paul Public Schools adopts FY2026 budget, will draw reserves and seek voter revenue

The St. Paul Public School District Board of Education unanimously adopted the district's fiscal year 2026 budget on June 10, 2025, approving a plan that uses $35.5 million from the district's fund balance to cover a $51.1 million shortfall while keeping most school-level resources intact.

The vote followed a months-long budget process that administrators said prioritized school programs and shifted the majority of reductions to central-office budgets. Superintendent Dr. Stanley told the board the work had been “a marathon, not a sprint to get to this point in the year,” and thanked staff, principals and board members for participating in a collaborative process over the previous eight months.

Administrators said the adopted budget closes most of the projection gap with a combination of the fund-balance draw, $5.4 million in identified additional revenues, expense reductions and other adjustments. The budget as presented includes a $35.5 million planned draw from reserves and two late additions totaling $603,000: $543,000 to restore some early-childhood family education (ECFE) positions and programming, and $60,000 for student engagement support paid from the general fund. Chief Tom Sager, executive chief of financial services, described the approach as “an intentional decision this year of deficit spending drawing down our fund balance, mostly to maintain programs and services as much as possible.”

Why it matters: Board policy requires maintaining a minimum reserve equal to 5% of daily operating expenses. Administrators said the FY2026 plan keeps the district above that minimum but reduces the cushion, and that continued use of reserves without new revenue would require bigger adjustments in future budgets. Chief Sager and Superintendent Dr. Stanley told the board they are planning a two-track approach: seek voter-approved revenue (a referendum) and begin community conversations about longer-term structural options such as facilities changes.

Public comment and audit status: During public comment, parent Michelle Wall told the board that district fiscal reporting lacks some crosswalked program-code detail and that recent state reporting had been incomplete; she warned the board that “this administration wishes to go to the public with a referendum seeking additional funding.” Administrators responded to questions about the fiscal year 2024 audit status, saying auditors were working toward completion and that they expected an unmodified opinion with no material compliance findings; Chief Sager said the audit work was “in progress” and anticipated to finish in July.

Board discussion: Directors on both sides of the dais praised the increased transparency and earlier outreach compared with prior budget cycles. Vice Chair Ward said the new process left her feeling “more knowledgeable and more prepared for this one than I have before.” Multiple directors noted the board’s intent to direct cuts away from schools where possible: administrators reported central-office departments absorbed about 74% of planned reductions while the schools received a net increase in resources and additional staff FTEs allocated to schools.

Numbers and outlook: Administrators described an initial shortfall of about $51.1 million. After applying the $35.5 million fund-balance draw and making reductions and revenue adjustments, the plan closed most of the gap; officials projected an estimated ending general-fund balance for FY2026 near $39.2 million and said the result meets the board reserve parameter. They cautioned that without new revenue the district could face another projected shortfall in FY2027 and signaled a likely referendum discussion in November.

Votes at a glance: Board members voted unanimously (Yes 7-0) to adopt the FY2026 budget as presented. In related business the board also voted unanimously to: authorize cooperative sponsorships for boys hockey and girls gymnastics; approve the updated 2025–26 Rights and Responsibilities handbook; certify the district population estimate for the 2025 payable 2026 levy; rescind Policy 420 (students and employees with certain communicable conditions); and approve revisions to policies 401, 408.05, 425 and 516.01.

What’s next: Administrators said they will monitor late legislative actions, fall enrollment and audit results and will bring budget revisions if those factors change revenue or expense projections. They also said the district will begin community engagement this summer on revenue and longer-term options, and prepare a referendum plan for potential voter consideration in November.