The Stillwater School Board confronted a projected $4.8 million budget deficit for fiscal year 2026 during its February 18 meeting, as unfunded state mandates and declining enrollment compound the district's financial challenges.

Finance Director Marie presented a fiscal forecast showing revenues of $151.9 million against projected expenditures of $158.1 million for the upcoming fiscal year. The shortfall stems largely from salary and benefit increases totaling $3.3 million, which represent 74% of the district's general fund budget, combined with limited state funding growth.

"We are a people business and we serve students," Marie told the board, explaining that any budget reductions would significantly impact staffing levels. The district faces additional costs from unfunded state mandates, including new family medical leave requirements and curriculum changes that could cost $1.4 million while receiving only $300,000 in state support.

The board also reviewed winter assessment results showing mixed academic performance across grade levels. Data Analyst Elsa Mt reported improvements in early elementary reading, with kindergarten showing growth from 67% to 70% of students at low risk levels. However, fourth and fifth grades continue to struggle, with curriculum alignment issues identified as a contributing factor.

Superintendent Dr. Funk announced that bond project groundbreaking would be delayed due to weather, with Lake Elmo construction now scheduled to begin next week instead of yesterday. The board approved $673,500 in summer facility maintenance projects and conducted second readings on policies regarding material distribution and cell phone restrictions, with the latter requiring a third reading before final approval.