Financial Update: February 2017

Key to the operation of a large organization is an understanding of its financial health. South Washington County Schools is no different. Transparent, clear communication regarding fiscal responsibility ensures widespread community support. This document is being shared to support the need to understand financial decisions which continue to be made that have an impact on the work we do to provide a high-quality education for students.

District 833’s reliance on state funding

South Washington Schools continues to face financial stress due to ongoing, persistent and increasing unfunded mandates, special education cross subsidies of more than $13 million annually, other prorated reductions in state aid formulas and increased pressures on labor costs.

The two most pivotal factors in determining district revenue are student enrollment and the State’s basic funding formula. These two factors are multiplied to calculate a district’s basic state aid. Unfortunately, the basic formula amount has not kept up with simple inflation. Since 2003, the formula amount has fallen behind by $550 per pupil. In other words, as expenses such as wages, benefits, utilities, tuitions, professional services and supplies have risen by an average of 2.3% over the past 14 years, the basic formula has increased by 1.6%. A 0.7% gap in District 833 can result in a $1.4 million annual gap.

The erosion of the basic formula has caused many Minnesota school districts, including District 833, to fill funding gaps by asking local voters for operating referendums. The increased dependence on operating referendums has shifted the percentage of District 833’s state aid revenue from 80% of its revenues just four years ago to 75% in 2017.

Funding Sources

District focuses on putting money in the classroom

Total Spending per Student

The Minnesota Department of Education (MDE) annually creates and distributes a database of financial information, also known as profiles data. The profiles data allows school districts to compare to each other financially based on the different categories of spending that are reported. District 833 continues to be a low-spending district compared to its peers, while focusing more of its resources towards the classrooms than other school districts.

South Washington County Schools is ranked 31 out of 48 metro school districts in total spending per pupil in fiscal year 2014-15, according to the most recent profiles data from the Minnesota Department of Education.

Regular Instruction

The South Washington County Schools’ School Board has always stressed placing most of its financial resources in the classroom. District 833’s classroom instructional spending ranks 18th in the metro area and is $212 per pupil higher than the metro average.

District Level Administration

In addition, District 833 spends the least amount per pupil on District Level Administration in the metro area. District 833 spends $245 per pupil less than the metro average and its per pupil amount of $263 spent on District administration ranks 48 out of 48 metro school districts.