South Washington County Schools faces $13 million budget shortfall
South Washington County Schools leadership presented a sobering financial update to the board on July 17, revealing the district faces a $13 million general fund deficit for the 2027-28 school year due to declining enrollment and rising operational costs. The district is implementing a new budgeting strategy to address the crisis and avoid potential state intervention.
Chris Blackburn, the district's Director of Business Services, warned that at the current spending rate, the district will fall below its required fund balance policy by next school year and could face statutory operating debt by 2029. "At the current rate of spending the district will be below fund balance policy by FY27," Blackburn said, emphasizing the urgency of the situation.
Rather than impose uniform budget cuts across all departments, the district is adopting a "program-based budgeting model" that distributes reductions proportionally across different program areas. Blackburn explained the approach: "We chose instead to do a program-based budget model this year... we took the overall percentage like our large budget and then distribute across the programs relative to that total." The district is gathering staff feedback through a survey, and steering committees will develop initial recommendations for board approval in November, with implementation planned for the 2027-28 school year.
Superintendent Julie Nielsen sought to reassure the board and community that despite the significant adjustments ahead, the district is managing the crisis from a relatively strong position. With $57 million in reserve funds, Nielsen said the district is "on the front side of this" compared to many other school districts facing similar challenges. "It's not easy, but as Chris shared, there are many, many other school districts in the same situation," she noted.
Nielsen also provided routine updates on district operations, including the launch of summer targeted services and extended school year programs. She introduced Brad Rob as the new principal at Cottage Grove Elementary School. The superintendent also reported attending a regional meeting in Minneapolis with mayors and superintendents to discuss shared challenges facing public education, including issues like e-bikes in schools.
No votes were taken during the meeting, as both the financial update and superintendent's report were informational presentations. The board will continue monitoring the budget adjustment process through the fall, with formal recommendations expected in November.
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Superintendent's Report and District Updates
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