Rochester School Board Told to Prepare For Possible Budget Cuts
Rochester, MN (KROC-AM News) - The Rochester School Board is expected to soon begin the process of preparing for potential significant budget reductions down the road.
An updated general fund financial forecast is being presented to the School Board this evening. It projects the school district will have an unassigned fund balance of about $21 million at the end of the current school year. That would leave the district with a reserve fund equal to about 8.2-percent of its general fund expenditures. The district has long had a policy of maintaining a reserve of at least six percent.
According to the report, the added reserves from the current school year should allow the school district to maintain a structurally sound budget for the 2021-2022 school year without major adjustments but that would be followed by a steep deficit for the 2022-2023 school year. Without additional revenues, it is projected the district will face a shortfall of over $13 million.
The updated projection lists the largest long-term financial risk facing the school district as the potential for students not returning after the pandemic and not reducing staffing levels in response. Following that, the report identifies two other major risks as employment contracts that include increases exceeding the rates of state funding increases, and a lack of increases in state funding due to predicted state budget deficits.
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