Hopkins Public Schools outlines timeline to close nearly $7 million gap as transportation and federal grants add uncertainty

Hopkins Public School District officials on Jan. 28 told the school board and the public they are working through a multi-month budget process to address an anticipated budget shortfall of roughly $7 million by the time preliminary allocations are distributed.

Superintendent Mary Perry Reed said district leaders are “working together to face our fiscal shortfall this spring,” noting that enrollment is largely flat while expenditures are rising. “The challenge is real,” she said, and emphasized that the administration is “digging into” program analysis to find efficiencies that minimize classroom impacts.

The district currently projects roughly $128.9 million in revenue for fiscal year 2026 and about $135.9 million in expenditures, leaving a gap officials described as approximately $7 million. Those numbers are preliminary and subject to change when the district presents a revised budget in April and a preliminary budget for FY2025–26, officials said.

Why it matters: Hopkins leaders said they want to protect classroom teachers and manageable class sizes while reducing noninstructional costs. Board members pressed administration for details about what cuts might look like and when the board will be asked to act.

What officials said and what happens next - Timeline: The Citizens Financial Advisory Committee (CIFA) will present a set of parameters on Feb. 11, the board is scheduled to pass a resolution on Feb. 25 authorizing administration to make recommendations for program reductions or additions, and the district expects to deliver revised budgets in April with a first read in May and final approval in June. Director Chapinduca told the board the CIFA report will guide initial allocation decisions. - Staffing is the largest expenditure: Deputy budget lead (presenter at the workshop) noted most district spending is on people. The district has implemented a soft hiring freeze for nonessential or easily deferred vacancies and said it is reviewing unfilled positions and retirements as one way to limit layoffs. - Teacher contract and bargaining: The board learned the current teacher agreement expires June 30 (covering the 2025–26 fiscal year). District leaders said they will not know exact labor costs for next year until negotiations conclude; they are building the budget with assumptions but will hold some dollars in reserve in case of a retroactive settlement. - Transportation pressure: Administration told the board it has factored a $3 million transportation cost increase into FY2026 projections after contractors raised rates 15–20 percent; the district has hired an outside transportation consultant (identified at the meeting as the Center for School Operations Excellence / “Seesaw”) to audit routing, vendor contracts and possible efficiencies and expects preliminary audit results in February. - Enterprise systems and capital planning: Officials said the district is transitioning from Skyward to Oracle Cloud (an enterprise resource planning system) and is preparing for a bond referendum to fund facility upgrades including safety and single-stall restrooms. Those efforts are separate from near-term operating budget balancing but add to staff workload.

Financial assumptions and near-term numbers District presenters listed the main assumptions they used in current models: a modest 2% revenue inflation assumption for FY2026; an assumed 4%–5% salary cost increase for negotiations; a fringe benefit rate around 42%; and a 3% CPI-based assumption for other inflationary costs. For FY2025 the district’s adopted total expenditures were shown as $128,070,914 in the presentation; presenters said they will provide revised numbers at the April budget revision.

Uncertainty from federal grants Board members asked whether a possible federal funding freeze could increase the deficit. Director Chapinduca said the district “just don’t know yet” and was “optimistic” that an immediate cut would not materialize for FY2024–25, but cautioned that if a federal freeze persisted into March–June the district could face a larger deficit. Treasurer Rachel Hartland later told the board the district receives roughly $4 million in federal grant funding each year and is monitoring national developments.

Discussion, options and constraints Board members pressed administration on whether the district would rely on attrition rather than layoffs. Officials said they are evaluating vacancies, retirements and program consolidations as lower-impact options and are using “predictable staffing models” (PSMs) to look for consistent allocation methods across schools.

Multiple board members raised the timing of teacher negotiations relative to the state legislature’s fiscal signals. Presenters acknowledged the district is building contingency into the budget but cannot finalize allocations until bargaining outcomes and possible state funding adjustments are known.

No formal board votes were taken during the workshop. Officials said the board will consider the CIFA report on Feb. 11 and expects to pass a resolution on Feb. 25 that will formally authorize administration to present specific program reductions or additions for the board’s review.

What leaders flagged as priorities to protect Superintendent Reed and other presenters listed their instructional and operational priorities: preserving high-quality Tier 1 instruction, sustaining mental-health and social-emotional supports (counselors, social workers, school-based mental health providers), supporting restorative practices, maintaining services for students with individualized education plans and 504 plans, and protecting athletics and after-school activities where feasible.

Board next steps and transparency District leaders emphasized ongoing biweekly budget meetings with principals, a smaller “swift action” budget team meeting several times per week, and additional modeling using peer districts. They committed to returning to the board with revised revenue and expenditure estimates in April and to share transportation audit results when they are available.

Quotes “We are really digging into our, doing program analysis and trying to scrutinize every aspect of the district budget so that we can be thoughtful about how we approach what will be a very large reduction,” Superintendent Mary Perry Reed said.

“We just don’t know yet,” Director Chapinduca said when asked whether a federal grant freeze could increase the district’s deficit. “If it continues into March into June … yes, we might be potentially facing a bigger deficit. But at this point in time I’m optimistic.”

The bottom line Hopkins school leaders presented a near-term plan and a schedule for decisions. The district projects a multi-million-dollar shortfall driven by flat enrollment, inflation, negotiated salary pressures and a major rise in transportation costs. Officials described options to reduce costs while seeking to minimize classroom impacts, and said they will ask the board to authorize formal recommendations after CIFA’s Feb. 11 presentation and a Feb. 25 resolution. The budget remains subject to change pending negotiations, audit results and federal funding actions.

Ending note District leaders asked the board and the community to watch the scheduled budget milestones — CIFA on Feb. 11, a board resolution on Feb. 25, revised numbers in April, and a first read in May — and signaled they will return with specific reduction proposals if needed.