This is the proposed SoWashCo schools budget for school year 2025-2026.
If that doesn’t make your head spin, then congratulation professor! But for the rest of us, this is a lot of numbers and a lot of math. But if we are to hold our school leaders accountable, we the parents need to understand the basics of this budget. Where does the money come from? Where is it going? Where are we overspending? Where are we not spending enough? In this 3 part series, we will go through how to understand the school’s budget in a way that makes sense.
Just like a family with multiple jobs, the school district has multiple sources of revenue – we’ll look at these from largest to smallest.
State Aid
The state of Minnesota funds the largest portion of the district’s budget – providing $263M of the total $564M budget. Or to put it another way, the state provides 61% of the $431M of actual revenues (excluding the money for a special construction referendum). The formula for calculating how much state aid the district receives is quite complicated, since different school districts receive different amounts per student. But the largest factor in the amount of state aid received is the number of students enrolled.
State Aid has not been keeping up with the cost of inflation for decades. In 2023, the state adjusted the formulas for funding significantly (adding around 11% more funding than the prior year), but unfortunately this was not enough to erase the declining funding that has been occurring. This chart from Northstar Policy’s “Gaining Ground” report shows how funding has fallen. Even after the 2023 change, District 833 receives $1361 less per pupil in 2024 than it did in 2003:
Local Revenue
The next most significant source of revenue for the school district is local property taxes. Local revenue represents $156M (or 36%) of the $431M total (excluding special construction funds). To help offset a portion of the declining availability in State Aid, SoWashCo tax payers have reliably approved operating levies to maintain the quality of the schools. Read our analysis of whether that’s a good idea here.
Federal Aid
The federal government provides $11M or 2.5% of the $431M total revenue (excluding special construction funds). This money is primarily used to cover a portion of the cost of special education and nutrition programs.
Fund Depletion
Just like you have a checking account for rainy days, the school district maintains fund balances to cover the shortfall when expenses exceed revenues. For the 25-26 budget, funds are projected to be drawn down by $3M. The district is required to maintain different funds for different expense purposes, and laws regulate if/how money can be moved between them. So while some funds will actually improve this year, many will be drawn down. The school district needs to maintain at least minimum fund balances for a variety of reasons.
Other Revenue
Due to booming population growth in Washington county, the school district asked voters to approve construction bonds to increase school capacity, improve school security, and implement technology upgrades. The district budgeted $130M in other revenue for these projects.