Lower Enrollments Mean Budget Deficits for School Districts
School districts across the state are facing budget deficits due to declining enrollment and the impacts of the pandemic.
With about 38,000 students, the Anoka-Hennepin School District is the state’s largest. During a year the district projected enrollment growth, COVID-19 had the reverse effect.
“We were 1,000 kids less staring out the year,” said Michelle Vargas, the district’s chief financial officer.
Elementary students account for the largest share of decline as many families opted for private schools or homeschooling. Enrollment shortage meant a loss of about $10 million in revenue for Anoka-Hennepin.
Vargas said the district projects they’ll get back 20 percent of the kids they lost last year. The district said payroll cuts were made because of smaller enrollment, not due to budget reductions.
The district will carry about $5.5 million in deficit into next school year, which is a larger deficit than it would normally have.
While federal dollars can backfill some of the cost, the district is waiting to see what happens at the legislature to get better guidance on where money should be allocated.
“Depending on when we open in the fall, what it’s like. Are we still buying PPE? We weren’t really budgeting that. We don’t know in the fall. Are we still wearing masks, providing masks and those types of things,” explained Vargas.
Right now Anoka-Hennepin’s deficit is manageable because it can fall back on its fund balance. However, the district hopes lawmakers can agree on a funding plan soon before the school has to adopt its full budget in June.
“We don’t know what our funding is yet, so everything’s based on assumption and what we could get,” said Vargas.
The Wayzata School District is also estimating a revenue shortage of about $9.2 million. The shortage also stems in large part from enrollment decline.
