Many school districts in America have no economic responsibility to taxpayers. One school district in Minnesota gave teachers raises without having any money to do it. Now they face a budget deficit in the millions.
Shakopee Public Schools is facing a $2.5 million projected budget deficit for its 2020-2021 school year.
District officials attribute the shortfall to an increase in employee pay and benefits and a struggle to gain enough funding from the state to keep pace with increases in expenditures.
The shortfall is projected to put the district’s unassigned fund balance at about $1 million at the end of next year, which is $7 million lower than the fund balance the district should be operating under, according to the district’s own fund balance policy, which says the district should aim for a general fund balance that hovers between 8 and 12% of the annual budget.
The 2019-2021 teachers’ contract, approved by the Shakopee School Board in a unanimous vote Jan. 6, includes a 1% pay raise and 10% increase in health insurance contributions for teachers during the 2019-2020 school year, and a 3.25% pay raise and 8% increase in insurance contributions the following year. That means the starting salary for a new teacher in Shakopee will go from $39,834 during the 2019-2020 school year to $41,129 for the 2020-2021 school year. Those salaries are a couple years behind the surrounding districts’ settlement contracts.
Source: SW News Media
