The Duluth school district is facing a nearly $4 million deficit in fiscal year 2019.
The School Board was presented with projected unrestricted general fund budget changes during a committee of the whole meeting Wednesday. According to the calculations by district CFO Doug Hasler, the preliminary budget shows an increase of more than $1 million in revenue, but also an increase of nearly $2.8 million in expenditures. The increase in expenditures includes wages and salaries as well as a projected 6 percent increase in medical plan premiums. Hasler said the latter increase is very preliminary and premiums only increased 2.8 percent last year.
"Understanding that there are other things that can happen and things that we don't know as of today, this could be the maximum impact, and I want you to see the maximum impact as we start our process as we move forward and decisions are made and new information becomes available to us," Hasler said during the meeting Wednesday. "It's a lot easier to take an ugly number and reduce it, than it is to take a number that was represented early on in the process and have to increase later."
The deficit also includes more than $2.2 million in budgetary adjustments, which includes $1.3 million in deficit and delayed expenditures carried over from fiscal year 2018. Included in that figure is $400,000 left over after the board made cuts in December.
Last month, the board faced a $2 million deficit for the current year's budget. That deficit was reduced by the state sending a one-time $600,000 adjustment enrollment as well as by the district delaying the filling of open positions, cutting department and staff development budgets and delaying the telepresence project at the high schools, in addition to an expected property sale of $300,000, which is for some of the district's land near Hartley Park.
"This is the beginning of this process. We will have many, many more conversations," said superintendent Bill Gronseth. "I guarantee you that the numbers on these pages will continue to develop and shift and change and form. I think that this has provided a solid base for us to move forward."