Minneapolis Public Schools Fiscal Outlook FY27 to FY31 (from 11/25/2025 Work Session, “District Fiscal Outlook” Presentation, Minneapolis Public Schools Finance Division)

Executive Summary  

>>>>>   Minneapolis Public Schools (MPS) faces a significant fiscal challenge over the next five years.  While short=term revenues remain stable, long-term projections indicate a structural imbalance driven by expenditure growth exceeding revenue trends.

 

>>>>>   Without corrective action, the general fund balance will decline from approximately $140 million in FY26 ti a negative position by FY31.

 

>>>>>   The five-year projection is a forecast for planning purposes, based on our current fiscal reality.  This is not to be confused with the actual budget.  While the following may affect the district’s expenses and revenue, they are not affecting property taxes:

 

              >>>        Property taxes are adjusted when 

                             there is a new levy or an increase 

                             to an existing levy.

 

>>>        Labor agreements are negotiated 

               between collective bargaining units

               and the district. 

  

 Any obligation resulting from these agreements function like expenses which the district   then manages.

 

 

Drivers of Fiscal Stress

 

>>>>>   State revenues to drop to pre-2023 levels

 

>>>>>   Birthrate declines

 

>>>>>   Labor cost increases

 

>>>>>   Inflation in purchased services and material

 

>>>>>   Macroeconomic uncertainty

 

              >>>  Challenges affecting both the public

                       and the private sector 

 

Fiscal Projections:  FY27 through FY31

 

                                    Total           Total                Surplus/   Ending Fund  

                                            Revenue    Expenditure   Deficit        Balance

                                             ($M)           ($M)                ($M)             ($M)

 

Fiscal Year 2026       701.9          722.4              -20.5               140.3   

             

Fiscal Year 2027       713.8          744.1              -30.3               119.8   

 

Fiscal Year 2028       703.1           766.4             -63.3                  89.5   

 

Fiscal Year 2029       700.9          789.4              -88.5                  26.2   

 

Fiscal Year 2030       698.8          813.1            -114.5                -88.1   

 

Fiscal Year 2031       696.7          837.5            -140.7              -317.3   

 

 

Fund Balance Types

 

Restricted Fund Balance

 

Definition >>>>>    This is a portion of the district’s fund balance that have legally enforceable

      constraints placed on their use that either are externally imposed by resource         

      provider (grantors, donors, voters) or imposed by law through legislation.

 

Examples of Restricted Funds

 

Staff development

Gifted and Talented

Career and Technical Education (CTE)

Student activities

Safe Schools Levy

Federal grants

                       

Non-Spendable Fund Balance

 

Definition >>>>>    This is a portion of the district’s fund balance that cannot be spent because the assets are not in spendable form or are legally or contractually required to be maintained intact.

 

Examples of Non-Spendable Funds

 

Prepaid items

Inventories

Long-term receivables

 

Assigned Fund Balance

 

Definition >>>>>    This is a portion of the district’s fund balance that is designated for a specific purpose.  The intent to use the funds for specific purposes can be established by the Minneapolis Public Schools Board of Education or district administration.

 

Examples of Assigned Funds

 

Referendum (class size)

Funded projects

Curriculum adoption

 

Unassigned Fund Balance

 

Definition >>>>>    This is a portion of the district’s fund balance that is not designated for a specific purpose.  It is used as a financial safety net and must meet district policy.   The district maintains a minimum   fund balance of eight percent (8%) of the annual operating budget.  The district’s bond rating is tied to the unassigned fund balance.

 

Examples of Unassigned Funds

 

Government Shutdown (State or Federal)

 

 

Strategic Recommendations

 

>>>>>   Protect fund balance---  avoid using reserves to balance FY27

 

>>>>>   Implement multi-year cost containment strategies

 

>>>>>   Advocate for more state and federal funding

 

>>>>>   Strengthen transparency through public engagement

 

 

FY2027 Budget Development Timeline

 

>>>>>   September 2025:  Levy certification and forecast presentation

 

>>>>>   October 2025:   Finance Committee five-year forecast review 

 

>>>>>   December 2025:  Truth-in-Taxation hearing and final levy adoption

 

>>>>>   December through January 2025:    Community Area Meetings

 

>>>>>   February 2026:  School/Department allocations and Budget Tie-Out (BTO) system open

 

>>>>>   April through June 2026:   Final budget approval and publication

 

 

FY2027 Budget Timeline 

 

>>>>>   December 2025:  Hold budget area meetings with community

 

>>>>>   January 2026:    Continue to hold budget area meetings with community

                                           Close the budget gap

 

>>>>>   February 2026:  Send budgets to schools and departments

 

>>>>>   March 2026:  Complete Budget Tie-Out (BTO)

 

>>>>>   April 2026:  Present budget at the Finance Committee meeting

 

>>>>>   May 2026:  Present the budget to the Minneapolis Public Schools Board of Education for first

                                    reading of the budget

 

>>>>>   June 2026:  Minneapolis Public Schools Board of Education adoption of the budget

 

 

 

Community Engagement Meetings

 

Minneapolis Public Schools will hosr community area meetings focused on budget and school transformation from 6:30 Until 8:00 PM 

 

>>>>>     3 December  >>>  North High School

 

>>>>>     4 December  >>>  Washburn High School

 

>>>>>     5 December  >>>  South High School

 

>>>>>   10 December  >>>  Roosevelt High School

 

>>>>>   11 December  >>>  North High School

 

>>>>>   16 December  >>>  Southwest High School

 

>>>>>   14 January 2026  >>>  Camden High School

 

>>>>>   15 January 2026  >>>  Davis Center (all-staff only session)

Appendix

 

Budget Timeline Detailed---  November

 

Levy                      FY27 Operating/         MPS

Certification        Capital Budget            Board of Education

                                                                      Meetings

 

Proposed             Final enrollment         Business:

property tax       and revenue                18 November

statements         projections                   2025

mailed

                        11/18---                        Work Session:

            Work Session to          25 November

            present five-year         2025

            forecast, revised

            budget gap, and            Finance

            discuss school                2 December

            board budget                2025

            board priorities

 

           (TBD  *All meetings

           scheduled before January) 

           Tentative community

           “Zone” meetings to discuss

           district finances and

                             financial outlook for FY27

 

Budget Timeline Detailed---  December

 

Levy                      FY27 Operating/         MPS

Certification        Capital Budget            Board of Education

                                                                      Meetings

 

12/9/25                12/9/25                      Business:

Truth in                audit                            9 December

Taxation              presentations             2025

Hearing                                                       (starts at

MPS Board        12/10-12/15                6:00 PM and         

of Education       Meet with                   includes

approval              associate                     Truth-in-

             superintendents       Taxation

             to review                    meeting

             preliminary

             school allocations     Work Session:

                                                                      No meeting

            Community

            Zone meetings             Finance

            to discuss                       No meeting

           district finances and

                             financial outlook,

           scheduled for

           12/3 North High

           12/4 Washburn

                     High

           12/5  South High

           12/10 Roosevelt

                        High

                             12/11 Southwest

      High

            12/16 Edison

      High

 

 

 Budget Timeline Detailed---  January

 

FY27 Operating/       MPS

Capital Budget          Board of Education

                                     Meetings

 

Community Zone    2026 Board meeting

Meetings to              dates confirmed in

Discuss finances      January 2026

and financial

outlook for FY27    

scheduled for

 

1/14

Camden

High School

 

1/15

Davis Center

(staff only)

 

 

 

Budget Timeline Detailed---  February

 

FY27 Operating/       MPS

Capital Budget          Board of Education

                                     Meetings

 

2/13/26---                2026 Board meeting

School and               dates confirmed in

Department             January 2026

allocations

sent to

principals                     

 

 

Budget Timeline Detailed---  March

 

FY27 Operating/       MPS

Capital Budget          Board of Education

                                     Meetings

 

3/6/26---                   2026 Board

Budget                       meeting dates

Tie-Out                      confirmed in January

(BTO)                                                            

closes                                                            

 

3/6/26—

4-1-26                                                                             

Budget

Tie-Out

(BTO)                                                            

review                      

and approval

 

 

Budget Timeline Detailed---  April

 

FY27 Operating/       MPS

Capital Budget          Board of Education

                                     Meetings

 

4/13/26---                2026 Board

Interiew                    meeting dates

and Select                 confirmed in January

Begins                       

 

Finance                                                         

Committee

reviews the

budget for

first reading

                                                                                         

Finance

Committee

reviews                     

the capital

board plan

 

 

Budget Timeline Detailed---  May

 

FY27 Operating/       MPS

Capital Budget          Board of Education

                                     Meetings

 

Budget first               2026 Board              

reading by                meeting dates

the Board                  confirmed in

                                    January 2026

Capital bond

plan presented

to Board

 

Public budget

report on

district website                         

 

Finance                                                         

Committee

reviews the

budget for

final reading

                                                                                         

 

Budget Timeline Detailed---  June

 

FY27 Operating/       MPS

Capital Budget          Board of Education

                                     Meetings

 

Operating                 2026 Board

Budget                       meeting dates

Approval                   confirmed in

                                    January 2026

Capital

Budget

Approval

 

Signed

budget

resolution

on MPS

website

 

 

Financial Projection Summary---  General Fund

 

Local Revenue

 

Property Tax Levy

 

FY26 Budget

 

$172,441,561

 

FY 27 Budget Projected

 

$172,855,809

 

Percent Change,

FY26 to FY27

 

+0.24%

 

FY28 Budget Projected

 

$171,552,080

 

Percent Change,

FY27 to FY28

 

-0.75%

 

FY29 Budget Projected

 

$170,258,351

 

Percent Change,

FY28 to FY29

 

-0.75%

 

FY30 Budget Projected

 

$168,974,622

 

Percent Change,

FY29 to FY30

 

-0.75%

 

FY31 Budget Projected

 

$167,700,893

 

Percent Change,

FY30 to FY31

 

-0.75%

 

 

Admission and Student Activity Revenue

 

FY2026 Budget

 

$0.00

 

FY2027 Projected

 

$0.00

 

Percent Change,

FY26 to FY27

 

0.00%

 

FY2028 Projected

 

$0.00

 

Percent Change,

FY27 to FY28

 

0.00%

 

FY2029 Projected

 

$0.00

 

Percent Change,

FY28 to FY29

 

0.00%

 

FY2030 Projected

 

$0.00

 

Percent Change,

FY29 to FY30

 

0.00%

 

FY2031 Projected

 

$0.00

 

Percent Change,

FY30 to FY31

 

0.00%

 

 

All Other Local Revenue

 

FY2026 Budget

 

$9814.424

 

FY2027 Projected

 

$9694.424

 

Percent Change,

FY26 to FY27

 

-1.22%

 

FY2028 Projected

 

$9,694.424

 

Percent Change,

FY27 to FY28

 

0.00%

 

FY2029 Projected

 

$9694.424

 

Percent Change,

FY28 to FY29

 

0.00%

 

FY2030 Projected

 

$9694.424

 

Percent Change,

FY29 to FY30

 

0.00%

 

FY2031 Projected

 

$9694.424

 

 

Percent Change,

FY30 to FY31

 

0.00%

 

 

 

 

Total Local Revenue

 

FY2026 Budget

 

$182,255,985

 

FY2027 Projected

 

$182,550,233

 

Percent Change,

FY26 to FY27

 

+0.16%

 

FY2028 Projected

 

$181,246,504

 

Percent Change,

FY28 to FY29

 

-0.71%

 

FY2029 Projected

 

$179,952,775

 

Percent Change,

FY27 to FY28

 

-0.71%

 

FY2030 Projected

 

$178,669,046

 

Percent Change,

FY29 to FY30

 

-0.71%

 

FY2031 Projected

 

$177,396,317

 

Percent Change,

FY29 to FY30

 

-0.71%

 

 

State Revenue

 

General Education Aid

 

FY2026 Budget

 

$329,837,976

 

FY2027 Projected

 

$336,863,208

 

Percent Change,

FY26 to FY27

 

+2.13%

 

FY2028 Projected

 

$327,947,824

 

Percent Change,

FY28 to FY29

 

-2.65%

 

FY2029 Projected

 

$324,672,113

 

Percent Change,

FY28 to FY29

 

-1.00%

 

FY2030 Projected

 

$321,434,525

 

Percent Change,

FY27 to FY28

 

-1.00%

 

FY2031 Projected

 

$318,204,300

 

Percent Change,

FY30 to FY31

 

--1.00%

 

 

State Aid for Special Education

 

FY2026 Budget

 

$114,626,947

 

FY2027 Projected

 

$118,696,204

 

Percent Change,

FY26 to FY27

 

+3.55%

 

FY2028 Projected

 

$118,696,204

 

Percent Change,

FY28 to FY29

 

0.00%

 

FY2029 Projected

 

$121,070,128

 

Percent Change,

FY28 to FY29

 

+2.00%

 

FY2030 Projected

 

$123,491,530

 

Percent Change,

FY27 to FY28

 

+2.00%

 

FY2031 Projected

 

$125,961,361

 

Percent Change,

FY30 to FY31

 

+2.00%

 

 

Other State Aid

 

FY2026 Budget

 

$16,438,915

 

FY2028 Projected

 

$16,969,375

 

Percent Change,

FY26 to FY27

 

+3.29%

 

FY2029 Projected

 

$16,438,915

 

Percent Change,

FY28 to FY29

 

-3.13%

 

FY2030 Projected

 

$16,438,915

 

Percent Change,

FY29 to FY30

 

0.00%

 

FY2031 Projected

 

$16,438,915

 

Percent Change,

FY30 to FY31

 

0.00%

 

 

Total State Revenue

 

FY2026 Budget

 

$460,903,830

 

FY2027 Projected

 

$472,528,786

 

Percent Change,

FY26 to FY27

 

+2.52%

 

FY2028 Projected

 

$463,082,943

 

Percent Change,

FY28 to FY29

 

-2.00%

 

FY2029 Projected

 

$462,181,155

 

Percent Change,

FY28 to FY29

 

-0.19%

 

FY2030 Projected

 

$461,364,970

 

Percent Change,

FY27 to FY28

 

-0.18%

 

FY2031 Projected

 

$460,604,576

 

Percent Change,

FY30 to FY31

 

--0,16%

 

 

Federal Revenue

 

FY2026 Budget

 

$58,749,009

 

FY2027 Projected

 

$58,749,786

 

Percent Change,

FY26 to FY27

 

+0.00%

 

FY2028 Projected

 

$58,749,009

 

Percent Change,

FY27 to FY28

 

+0.00%

 

FY2029 Projected

 

$58,749,786

 

Percent Change,

FY28 to FY29

 

+0.00%

 

FY2030 Budget

 

$58,749,009

 

Percent Change,

FY29 to FY30

 

+0.00%

 

FY2030 Budget

 

$58,749,009

 

Percent Change,

FY29 to FY30

 

+0.00%

 

 

Total Revenue

 

FY2026 Budget

 

$701,908,028

 

FY2027 Projected

 

$713,828,028

 

Percent Change,

FY26 to FY27

 

+1.70%

 

FY2028 Projected

 

703,078,456

 

Percent Change,

FY28 to FY27

 

-1.51%

 

FY2029 Projected

 

$700,882,939

 

Percent Change,

FY28 to FY29

 

-0.31%

 

FY2030 Budget

 

$698,783,025

 

Percent Change,

FY29 to FY30

 

-0.30%

 

FY2031 Budget

 

$696,748,901

 

Percent Change,

FY29 to FY30

 

-0.29%

 

 

Other Revenue Sources

 

FY2026 Budget

 

$0.00

 

FY2027 Projected

 

Percent Change,

FY26 to FY27

 

0.00%

 

FY2028 Projected

 

$0.00

 

Percent Change,

FY28 to FY27

 

0.00%

 

FY2029 Projected

 

$0.00

 

Percent Change,

FY28 to FY29

 

0.00%

 

FY2030 Budget

 

$0.00

 

Percent Change,

FY29 to FY30

 

0.00%

 

FY2031 Budget

 

$0.00

 

Percent Change,

FY30 to FY31

0.00%

 

Total Revenue-Other Revenue Sources

 

FY2026 Budget

 

$701,908,028

 

FY2027 Projected

 

$713,828,028

 

Percent Change,

FY26 to FY27

 

+1.70%

 

FY2028 Projected

 

703,078,456

 

Percent Change,

FY28 to FY27

 

-1.51%

 

FY2029 Projected

 

$700,882,939

 

Percent Change,

FY28 to FY29

 

-0.31%

 

FY2030 Budget

 

$698,783,025

 

Percent Change,

FY29 to FY30

 

-0.30%

 

FY2031 Budget

 

$696,748,901

 

Percent Change,

FY29 to FY30

 

-0.29%