Robbinsdale Area Schools To Address ‘Startling’ $20M Budget Deficit
A budgeting mistake, as well as slow-moving staffing cuts, have left the Robbinsdale Area School District facing serious financial woes.
The district recently reassessed its financial situation and found a $19-21 million shortfall for the 2025-26 school year.
“I look at this number and it’s startling,” said district CFO Kristen Hoheisel in a Nov. 18 “State of the Budget” address. “The financial realities are difficult.”
According to Hoheisel, an error occurred in the application of the budgeting process, and as a result, the district overstated its available resources by about $20 million.
She said the district accidentally double-counted about $20 million in compensatory revenue. That’s state funding allocated to meet the needs of students who are underprepared to learn or are underperforming for their grade.
A second issue came as the district looked to implement about $17 million in budget cuts for the 2024-25 school year.
According to Hoheisel, the district has only cut about $3.2 million this year.
While some district staff members were laid off, those reductions were offset by new hires of educational assistants, she said.
These missteps mean more scrutiny from the Minnesota Department of Education is on the way.
If the district’s deficit is higher than $4.3 million, state statute would push it into a status known as statutory operating debt.
Under this status, the district would need to submit a plan for its operations to the state, which in turn would keep a closer eye on district finances.
District Can’t ‘Cut Our Way Out of This’
Hoheisel, who started with the district in August, said the district can’t “cut our way out of this.”
According to Superintendent Teri Staloch, who took the district’s top executive spot this summer, the district may need to look to bonding or a referendum to straighten out district finances. Buildings could also be repurposed, renovated or closed as part of a 10-year plan for the future, she said.
“If all we do right now is talk about the reductions, given our current enrollment projections already, we risk families and students leaving and not believing in us,” Staloch said. “And I don’t believe that’s right for the future of where we’re going to go.”
This comes after the district’s credit rating from S&P Global Ratings dropped by two scores.
The district is hosting a town hall from 6:30-8 p.m. on Wednesday, Nov. 20, at Cooper High School.
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