Superintendent: new state rules and cuts trim some school aid but board adopts preliminary $153M general fund budget

Superintendent Dr. Funk told the Stillwater Area Public Schools Board during its public meeting that recent actions at the Minnesota Legislature will change several revenue and mandate items for the district and that administrators will return in July with refined budget recommendations.

The superintendent said the Legislature set the general education inflation formula at 2.74 percent but that several reductions and formula adjustments in the final package will reduce the district’s inflationary increase. “So instead of a 2.74 increase to our budget, we’re actually looking at about a 1.62% with all these reductions,” Dr. Funk said. He summarized pieces the district expects to affect the 2025–26 budget: a $100 million state allocation to extend summer unemployment benefits for hourly district employees who do not work in the summer; the state will pay an increased Teacher Retirement Association (TRA) portion estimated as an additional $20 million in state aid overall; and several program-specific reimbursements or aids were reduced.

Dr. Funk named line-item impacts the district is tracking: a reduction in compensatory revenue of roughly $167,000 next year, an unexpected drop in Student Support Personnel Aid from the current $48 per pupil level to amounts the superintendent described in the meeting as “30 and 25¢,” and an estimated $52,000 reduction in school library aid. He said the district’s initial calculation of session-driven reductions totaled about $739,000, while legislative increases and adjustments produced roughly $1.8 million, leaving a net revenue change that the administration currently estimates at about $1 million more than February projections. He warned the administration is still verifying the final figures and said, “It’s not a good looking situation” for future years as additional reductions phase in.

The superintendent also noted several statutory or administrative changes that affect district operations: new language clarifying parent directory privacy, a statute to permit remote participation under Minnesota’s Open Meeting Law (with updated posting requirements), a provision allowing political subdivisions to post public notices online when a local newspaper ceases publication, and a provision allowing governments to suspend a public data request if a requester fails to inspect prepared data within five business days (Dr. Funk said he was seeking clarification on how that will work in practice).

Finance director Marie presented the district’s fiscal 2025–26 preliminary budget and asked the board to adopt it as required by law. Marie described a balanced general fund budget presented to the board of about $153 million (general fund projected revenue shown as approximately $153,000,373 and total district projected revenue of about $269.96 million). She said the budget adopted that evening includes the higher preliminary revenue numbers (the larger 2.74 percent calculation) and that the administration will return with a budget revision to reflect the legislative reductions once final state guidance and calculations are available. The board voted to approve the preliminary fiscal 2025–26 budget and heard that the administration expects to present targeted adjustments in July.

Board members asked for further clarification of specific line items and for future reporting that ties enrollment and month-by-month revenue to expenditure decisions. Representative Wayne Johnson, who attended the meeting, was acknowledged by the superintendent but did not speak to budget items during the presentation.

The administration said it will bring more detailed analyses later this summer, including an updated estimate of how reduced food-service reimbursements and the REED Act training mandate (which the superintendent said will require ongoing staff training with no identified new state funding) will affect the district.

Clarifying details from the meeting include the administration’s current numerical estimates and the items it has flagged for follow-up. The board’s adoption was of a preliminary budget that the administration described as balanced for planning purposes while it refines figures tied to the recently enacted state actions.