Hopkins hosts community session on Minnesota school finance; officials outline state funding limits and local budget pressures

Hopkins Public School District convened a board-hosted community engagement session to explain how Minnesota school finance works and how statewide budget trends are affecting the district’s forthcoming budget choices. Krista Caput, a state education finance expert, presented statewide forecasts and Hopkins-specific figures and answered questions from district leaders, Citizens Financial Advisory Committee members and community attendees.

Caput told the session the state’s November/December forecast projects a biennial surplus of roughly $616,000,000 but warned that the following biennium shows a projected structural deficit. “The December forecast said that we would have a… surplus of $616,000,000 over the course of 2 years,” Caput said, and added that the surplus is small relative to overall state spending and that a split legislature will likely limit new education funding.

Why this matters: state aid supplies the majority of per-pupil funding in Minnesota. Caput said state funding “accounts for about 62% of our total funding,” with local property taxes and federal sources making up most of the remainder. Because most Minnesota formulas tie aid to enrollment, Hopkins leaders emphasized that enrollment trends, student need and cost drivers (notably special education and personnel costs) determine how far state dollars go at the district level.

Most important figures and local effects

- Basic formula allowance: Caput said Minnesota’s per‑pupil basic formula for the year covered in the presentation is $7,281; that is the base per-student amount districts receive from state aid.

- Hopkins basic formula revenue: Caput cited Minnesota Department of Education data showing Hopkins received about $51,200,000 in basic formula revenue in fiscal year 2023.

- Special education costs and cross-subsidy: Caput and district staff presented Hopkins’ special education spending for fiscal year 2023 at about $17,600,000. The state’s initial special-education formula payment to Hopkins that year was about $9,600,000, leaving roughly $8,000,000 that Hopkins covered locally; after a subsequent state adjustment of roughly $1,100,000, Caput said the remaining local obligation was about $7,000,000. Caput also described larger statewide numbers: Minnesota spends about $2,000,000,000 annually on special education and the median district cross-subsidy is roughly $692 per student identified for services.

- Recent and planned state changes: Caput summarized 2023 legislative changes that increased English-learner per-pupil funding and raised the state share of special‑education cross-subsidy support (reported at 44% with plans to rise toward 50%), and she said Hopkins is projected to receive additional state aid (Caput cited roughly $3.8 million and then $3.9 million in recent adjustments) though districts will still likely carry a portion of the cross-subsidy (Caput cited an estimated Hopkins residual near $4.4 million after changes).

- Enrollment and open enrollment: Caput reported Hopkins’ total enrollment grew about 2% from 2017–2024 and that the district has had net gains from open enrollment ranging generally between about 200 and 350 students per year. She noted the fastest growth has been among students who generate compensatory, special‑education or English‑learner revenue, which increases district costs relative to basic per‑pupil aid.

District-level budgeting context and community questions

Hopkins board treasurer Rachel Hartland and Director of Business Services Theo Chapinduca explained how the district structures funds, what is restricted and what can be used in the general fund. Chapinduca said roughly 85% of the general fund budget covers salaries and benefits and that other categorical and restricted funds (for nutrition services, debt service, long‑term facility maintenance, etc.) cannot be repurposed to cover general operating costs. Hartland said the board has used fund balances in prior budget cycles; she noted the board approved the use of $3,000,000 of fund balance in the most recent prior budget process to reduce immediate impacts on classrooms and programming. Chapinduca cautioned that reserves are not a sustainable long‑term solution: “once we take those dollars out, they're not coming back,” he said, and relying on reserves year after year risks state oversight and credit consequences.

Special education staffing and para negotiations

District Director of Special Services Fonda Contreras said the district is staffed for special education and currently has fewer paraeducator shortages than in recent years, but she confirmed paraeducator wages and contract negotiations are active: “the entire para group… are currently negotiating their salaries,” she said. Caput and district leaders reiterated that federal funding for special education has not kept pace with costs (Caput noted federal funding on average covers roughly 12% of special-education costs), so states and districts carry the remaining share.

Documents, audits and next steps

Leaders told the audience the fiscal-year 2023 comprehensive annual financial report (audit) is in final review with the district’s external auditor and will be posted to the district finance web pages; audit work for fiscal‑year 2024 will follow. Board members and CFAC said public budget deliberations will continue through the winter and spring, with a final district budget typically adopted in May. No formal votes or policy changes were taken at the session; the meeting was informational and designed to gather community questions to inform upcoming board budget work.

Ending

Board and staff thanked community attendees and encouraged continued questions; the session closed after a question-and-answer period. Officials said they will continue, through public board meetings and additional outreach, to share budget options as the district refines revenue and expenditure estimates.