South Washington County Schools board previews $8 million shortfall in preliminary 2026-27 budget, unveils guiding-change framework

Superintendent Julie Nielson told the South Washington County Schools board on June 11 that district administrators are preparing a package of proposed budget adjustments that would prioritize about $13 million in changes to address structural funding gaps.

"District administration is prepared to create the package that prioritizes $13 million worth of adjustments to be implemented for the school year 27-28," Nielson said, introducing the guiding-change document that clarifies the board's governance role and administrators' day-to-day management of budget adjustments.

Chris Blackburn, director of business services, presented the preliminary 2026-27 budget and said revenues are projected at roughly $359 million against expenditures of about $367 million, producing an $8 million projected deficit under current assumptions. "That net reduction to fund balance is an $8 million just over deficit," Blackburn said, noting the estimate narrows an earlier $13 million projection after detailed line-item review.

Board members pressed for clarity on timing and public input. Board member Elizabeth Bachmann Ekberg asked when families would have opportunities to weigh in; Nielson said parents and the broader community will have chances to provide feedback once specific reduction packages are developed and that the district is considering targeted mailings and outreach in October.

Blackburn said enrollment decline is the main revenue driver. The district's budget model assumes lower enrollment over coming years, which reduces state basic formula aid and other per-pupil revenues. He also flagged the district's heavy dependence on state special-education aid and noted a state "blue ribbon" commission studying special-education funding that could change future aid amounts.

The presentation detailed restricted reserve accounts, tuition arrangements for nonresident students and a projected board goal for unassigned fund balance of 16.6 percent (which the district met earlier but expects to decline under current projections). Blackburn explained that restricted reserves (for things such as long-term facility maintenance and targeted services) are separate from the unassigned general fund balance.

Nielson and Blackburn emphasized process constraints: the ATPPS teacher pay program (described elsewhere in the meeting) is governed by a memorandum of agreement that is not embedded in collective bargaining and is therefore easier to adjust if state grant funding changes. Nielson said the district is examining "offramps" if state funding declines.

Next steps: the board was told it will be asked to approve the preliminary 2026-27 budget at its June 25 meeting; staff will continue weekly enrollment monitoring and refine budget package details before that date. No formal budget vote was taken at the June 11 meeting.

Approvals and procedural actions at the start of the meeting included a motion to approve the agenda, moved by Melinda Doss and seconded by Ryan Clark, which passed without recorded opposition.

The board discussion included questions on transportation costs (Blackburn said about $2 million of the anticipated increase is contracted transportation tied primarily to special-education routes), long-term facility maintenance timing, and the prospects for state-level changes to special-education aid. Blackburn said the district is modeling possible reductions but stressed uncertainty about final legislative outcomes.

The board left the session with plans for further public outreach once concrete packages are prepared and with a scheduled vote on the preliminary budget at the June 25 meeting.