This column is a thirty-thousand foot view of school finance and is in response to questions that come up in the community from time to time. I will start with a short synopsis on how schools in Minnesota are funded. Tax dollars are received by the state and dispersed to districts in the form of aids and levies. There is a basic formula determined by the state which gives greater funding weight to older students than it does to younger students.
There are many formulas that ultimately impact school funding. We receive an annual levy report that is approximately forty pages worth of formulas and calculations specific to the funding of ISD #544. Some districts pass additional voter-approved operating levies to provide more revenue to pay for the services involved in educating a community’s children. The Fergus Falls Public School District does not have a voter-approved operating levy in place. (Note - this is not to be confused with voter-approved bonds which go towards district building projects.) The single most important factor driving district revenues is student enrollment.
The Fergus Falls Public School District has an annual budget in excess of thirty million dollars. We serve over 2500 students in a brick and mortar setting (traditional school) and another 800 - 1000 through iQ Academy which is our online school. The revenue we receive goes towards every aspect of educating our students: salaries, building maintenance, curriculum, utilities, transportation, co-curricular activities, food service and community education to name a few.
Of all the expenditures that schools address in their budgets, salaries comprise the single largest amount of our annual budget by a wide margin. We are a service occupation and that requires people to deliver instruction, instructional support and all the other facets that are required in managing a large organization. Currently, we have approximately 475 employees and are the second largest employer in Fergus Falls.
Fiscal Year 2023 begins on July 1, 2022 and runs through June 30, 2023. In the spring of each year, the district goes through a budgeting process for the upcoming fiscal year. Because our revenue is based on enrollments that are projected and because our expenditures are tied to contractual agreements with employees for the upcoming fiscal year, it is very important for the school district to right-size its staffing.
It is for those reasons that you see the district publish positions that have been reduced each spring. Because these positions are based on projected enrollment calculations and needs can change over the course of several months, it is often the case that positions or partial reductions are reinstated. It all goes hand in hand with a state process that involves school districts setting budgets and being committed to expenses before knowing for sure what will be received on the revenue side. If that sounds a little tricky - well it is! Fortunately, with a common-sense approach to spending and strong fiscal stewardship, the district continues to be in a healthy position financially.