South Washington County Schools reviews revised budget showing modest gain but $1.4M deficit ahead of March 26 vote

Chris Blackburn, South Washington County Schools’ director of business services, told the board on March 5 that the district’s revised budget reflects updated revenue estimates that improve the district’s position by about $500,000 compared with the original budget approved last June, but still leave a projected $1.4 million deficit.

"The revised budget gives us an indication... of the reserves remaining at the end of the fiscal year," Blackburn said, explaining the work to update revenues, expenditures and staffing after receiving more current enrollment and expenditure data. He said state aid increases — driven largely by an increase in special-education aid and other categorical funds — account for most of the roughly $4.8 million revenue increase shown on the slides.

Blackburn said the district receives about $7,004.81 per pupil under the state basic formula this year and that special-education aid increased by about $2.7 million based on prior-year expenditures. He said federal aid represents about 2% of the district’s budget and that salaries and benefits account for roughly three-quarters of spending.

Board members pressed Blackburn on two looming budget risks. He described the Blue Ribbon Commission on special education, created by the Legislature, as proposing statewide adjustments that could reduce the district’s cross-subsidy aid. "We would anticipate about a $3,000,000 decrease in year 1 and $3,000,000 in year 2," Blackburn said when asked about potential impacts, and he cautioned the timing and final amounts depend on legislative action.

On summer-term unemployment for hourly workers, Blackburn said the district cannot currently levy to cover those costs and remains reliant on state aid. "We cannot currently levy for unemployment," he said, noting the program’s statutory and funding constraints and that state funding is the principal avenue to cover those claims.

Blackburn reviewed expenditure drivers, highlighting a roughly $4.2 million increase in spending tied to contracted services (primarily transportation and contracted special-education or postsecondary services) and noted that classroom instruction, special instruction and pupil support make up the largest shares of spending. He said the district projects its fund balance under the Minnesota Department of Education operating-debt calculation will drop from a recent high of about 19.1% to roughly 16.8.

Next steps: Blackburn said the board is expected to vote on the revised budget at its business meeting on March 26, 2026. He also outlined the district’s schedule for staffing allocations and preparation of the 2026–27 original budget for workshop (June 11) and final approval (June 25).

Why it matters: Enrollment drives the district’s main revenues, Blackburn told the board; small year-to-year shifts in kindergarten classes and the opening of nearby programs such as the Math and Science Academy are reflected in multi-year enrollment projections. The board asked for continued updates as the state finalizes special-education aid.