Osseo Schools FY27 Budget Covers $18M Deficit With Fund Balance

The Osseo Area School Board took a significant bite out of its financial reserves as it heads into the next fiscal year.

The board approved a general fund budget with $349 million in revenue and $367 million in expenditures. 

As a result, there’s an expected $18 million deficit. 

Officials plan to cover that budget hole with an allocation from the district’s existing fund balance.

“It’s really hard to look at these numbers and see our expenditures higher than revenue, and to see the fact that we’re now having to spend down that fund balance, which has been quite pretty hefty for quite some time,” said Board Vice Chair Thomas Brooks. “I think while it’s hard to spend down the fund balance which we’ve been used to just having in our back pocket, it’s also timely that we are starting to invest that money in our students and staff. But also recognizing that it’s not sustainable to spend at this rate.”

Among the biggest cost drivers in this year’s budget was a $2.75 million investment in special education staffing.

As of fiscal year 2026, the district had $105 million in unassigned fund balance, or about 30 percent of annual expenditures. That balance would drop to $87 million for fiscal year 2027, or 23.7 percent of annual expenditures.

The board’s policy is to not let the fund balance drop below five percent of annual expenditures.

However, finance officials project continued deficits on the horizon.

School board agenda documents show projected $14-17 million deficits annually for the general fund from fiscal year 2028 through 2031

As a result, the funding reserves would come down to $20 million, or 5.2 percent of expenditures by FY 2031.

Given the budget constraints, district officials anticipate recommending $16 million in budget cuts over the next four fiscal years.

“This does open the door for some much-needed discussion and prioritization from the board, staff and also the community,” Brooks said. “What’s coming isn’t a surprise, but really the opportunity for us to take a look and be more strategic and intentional about how we are being stewards of taxpayer dollars.”

Vice Chair Thomas Brooks speaks at Osseo School Board meeting.

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