The South Washington County School Board reviewed a preliminary budget for the 2025-26 school year that projects a $1.9 million deficit during their June 12 business meeting.

Business Services Director Chris Blackburn presented the $350.5 million general fund budget, noting that expenditures are increasing at 3.74% while revenues grow at only 2.84%. The deficit represents approximately 0.55% of the district's overall budget and would reduce the fund balance percentage from 17.2% to 13.9%.

"Despite our little bit of growth in enrollment and the growth in the formula from the state, our expenditures are outpacing that increase," Blackburn said, citing salary and benefit increases as the primary driver.

The budget includes several new financial pressures, including a $500,000 impact from paid family medical leave starting January 2026 and nearly $800,000 in reduced special education transportation aid. The district also faces uncertainty from a state blue ribbon commission tasked with reducing special education funding by $250 million in the 2027-29 biennium.

Community Education Director Jake Winchell presented his department's budget, which returns to a net positive position after previous deficits. The department serves over 400 individuals in early childhood programs and operates Kids Club childcare at all elementary schools, serving more than 1,600 children during the school year.

The board also received the annual Alternative Teacher Professional Pay System (ATPPS) report from retiring specialist Tim Bunnel, who announced this would be his final presentation after 17 years with the program. The ATPPS budget will remain balanced for the next three to four years without general fund support, according to Bunnel.

Activities directors from all three high schools presented year-end reports highlighting numerous state tournament appearances and academic achievements. The presentations showcased strong participation numbers across athletics, fine arts, and club activities.

The board will vote on the preliminary budget at their June 26 meeting, with final levy approval scheduled for December.