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Aitkin board adopts revised FY26 budget and approves preliminary FY27 budget with projected $565,747 deficit
Summary
The board approved a revised FY26 budget showing a $72,000 deficit and a preliminary FY27 budget projecting a $565,747 deficit; enrollment declines and decreases in some state and federal funds were cited as primary drivers.
The Aitkin Public School District board voted to accept a revised fiscal-year 2026 budget that shows a $72,000 deficit and to approve a preliminary FY27 budget projecting a $565,747 deficit.
Heather, the districts business manager, presented the budget assumptions and figures and highlighted key drivers: an estimated 2.7% increase in state aid, an average daily membership (ADM) projected at 914 for next year (a net loss of roughly 30 students from graduating seniors versus incoming kindergarteners), federal grant reductions (including compensatory and Title funding), one-time sale proceeds that appeared in FY26 but not FY27, and salary and benefit increases that push expenditures upward. "So as you can see...the FY27 budget is deficit spending by over 500,000," Heather said during the presentation.
Heather described line-item shifts across funds: a decrease in revenue in fund one driven by lower general-aid and compensatory revenue, a one-time equipment-sale boost in FY26 (iPad sales), and a transportation funding reallocation using capital project levy (CPL) dollars that increases fund-three revenue while offsetting other funds.
Board members discussed the districts fund-balance policy and the decision earlier to reduce the target from 25% to 20% of unreserved fund balance. Projected numbers still keep the district above the 20% target at June 30, 2027 under current assumptions, but several members expressed concern about continuing deficit spending and noted the volatility of legislative funding decisions (compensatory formula and special-education funding were highlighted). A board member observed that the districts fund balance is roughly twice the state average and urged careful allocation of reserves to avoid harming educational goals.
After discussion the board approved the two budget actions by voice vote with all members present voting yes. Board members and staff noted the budget can be revised later if circumstances change; the preliminary budget must be adopted by statute before July 1 with a final budget adopted at Truth-in-Taxation in December.
Next steps: the business office will monitor legislative work on compensatory and special-education funding and may return with revisions if state actions or enrollment changes warrant adjustments.
