The preliminary budget for Duluth Public Schools shows a deficit of more than $1.159 million in the general fund.
District CFO Cathy Erickson told the Duluth School Board last week there is still a lot of work that needs to be done between now and when the final budget is approved June 16, but reductions may be necessary.
The preliminary budget shows an increase of more than $1.88 million in revenue, but an increase of $3.165 million in expenses. The largest jump in expenses comes from the projected $1.59 million increase in special education instruction and $1.1 million increase in health reimbursement account contributions.
The contribution increase is a contractual obligation for all eligible district staff that is based on a percentage of out-of-pocket cost increases.
“This is something that we found out about in January because the out-of-pocket cost for our insurance seems to be increasing even though we don’t have the final number yet,” Erickson said. “This is not something we could have planned for until we heard the change for that out-of-pocket cost (for health care),” Erickson said.
As for the special education cost increase, Erickson said they are hoping to dig into that a little more.
Because of the projected deficit, Erickson said they are not currently planning on budgeting a general fund balance increase of $500,000 for the next fiscal year, an increase the School Board pledged to do each year. The district was able to do so for the 2019-2020 school year.
The federal government only provides 5% of funding to the district’s general fund. The state provides 76% and 19% is provided by local property taxes.
“If this isn’t a call to arms for legislators that we need to fund public education, I don’t know what is,” School Board member Sally Trnka said during the finance committee meeting last week, adding the district has the greatest CFO and finance team and this deficit isn’t due to fiscal mismanagement.
The School Board is expected to approve the preliminary budget during its regular meeting at 6:30 p.m. Tuesday. The meeting will be held via video conferencing and live-streamed on YouTube and Charter cable channel 187. Public comment can be submitted ahead of time by emailing email@example.com, no later than Monday by 4 p.m.