Moose Lake school board warned of steep drop in compensatory funding as budget work begins

Superintendent Eric Butche told the Moose Lake School Board on April 20 that compensatory revenue remains volatile and "is a significant concern," with current projections indicating a substantial reduction for the coming fiscal year. He urged the board and staff to plan conservatively as the district refines next year’s revenue estimates.

Business Manager Norm Nelis provided the district’s early revenue outlook, saying the State General Education Revenue formula will yield an estimated 2.69 percent increase, but compensatory revenue is projected to fall from $454,179 to about $295,237 — a decrease of roughly $158,942. Nelis also reported that projected payroll costs for FY27 have risen by about $200,000 after incorporating negotiated steps, lanes and agreed salary increases.

Nelis said the Minnesota Department of Education published the Revenue Projection model this week and that he will hold a workday at the Aitkin Regional Career Center (ARCC) to finalize revenue assumptions ahead of budget adoption. He told the board he will provide an updated revenue report at the May meeting.

The board received an additional statewide funding note from Butche: special education funding remains an area of concern and competing legislative priorities have limited clarity on any changes. The administration did not present a specific mitigation plan at the meeting; instead, staff were directed to continue conservative planning and return with refined figures.

Next steps: Nelis will refine the district’s FY27 revenues and report back at the May board meeting; no formal budget adoption occurred at the April 20 meeting.