Finance and Budget
Strategic financial management and effective budget controls are the foundation of a good school finance system. Our district mission and goals can only be accomplished through the effective allocation of human, financial, and physical resources. School funding drives the opportunities available to our students, and our decisions are made in the best interests of all students. Community support of our schools is invaluable to providing safe, healthy, and positive learning environments and programs for every student.
Our finance team is committed to accountability, communication and transparency. Our public schools are among the most valuable assets in our community, and they are owned by the community. As responsible stewards of taxpayer resources, we welcome your questions.
Budget: Revenues and Expenses
In Minnesota, school funding comes primarily from three sources: Federal, State, Local dollars. According to the Minnesota Department of Education under the current funding formulas, school districts receive on average 20% of their annual operating budget through local property taxes; in Cambridge-Isanti only 9% of our annual revenue comes from local property taxes. We also receive less state funding than the average school district.
Cambridge-Isanti School District receives $1,200 less in general education funding per student compared to the average Minnesota school district. With approximately 5,000 students in our district, this revenue shortfall results in a $6.1 million funding gap annually compared to an average Minnesota school district of a similar size. Our district ranks 304/330 Minnesota school districts (or among the bottom 10%). Even among neighboring districts, C-I Schools rank last in the Mississippi 8 Conference for per-student funding.
Here is a short video explanation of Minnesota school funding: https://www.youtube.com/watch?v=ASSxa9Hn0m8
The District’s primary expenses are: Instructional program (70%) Sites & Buildings (14%) Pupil Support Services (8%) Administration (8%). The District spends a larger percentage of its budget on instructional programs and a smaller percentage on administration than the average Minnesota district. Because we are a human enterprise, 80% of the district budget is spent on people (salaries and benefits). The District is one of the largest employers, the largest foodservice operator, and the largest transportation provider in the county.
A structural deficit
School funding has not kept pace with inflation. Across the state, school district expenses have increased 4% annually over the last decade according to the MN Department of Education. In Cambridge-Isanti we have held cost increases closer to 3% annually. But our revenues have increased by less than 2% annually. The result is less "buying power" or real dollars per student than we had 20 years ago. At the same time, schools are expected to continually increase and improve services. The District has been spending from its fund balance for almost 10 years to avoid budget cuts and maintain programs; that is no longer a sustainable strategy. The District went through two years of spending reductions in 2019 and 2020 totaling $7.5 Million and eliminating 90 jobs.
The District relies on state funding for 84% of its budget. Looking forward, the State of Minnesota is projecting a budget deficit of more than $4 Billion. The last time the state faced this large of a deficit, education funding was held flat with a 0% increase over two years and some state aid payments were delayed, which forced many districts into short-term cash-flow borrowing to cover payroll. With no additional funding from the state, our school district will have a $1.7 Million deficit in FY21, and that deficit compounds moving forward. Without additional revenue, the District will need to engage in budget reductions annually; this means more layoffs, fewer services, program cuts, and even larger class sizes in the future.
Annual Budget Calendar
- July 1: Fiscal Year Begins
- August-October: Annual audit by an independent audit firm
- September: School Board adopts a preliminary levy for taxes payable the following calendar year
- October-November: The budget process begins for the next fiscal year
- December: Annual Truth in Taxation Hearing and School Board adopts final tax levy
- December: Annual Audit Report to the Board
- January: Enrollment projections and Kick-off for Kindergarten enrollment
- February: Deadline for retirement notifications
- February-March: Budget development meetings
- March-April: Budget presentations to the School Board
- April: Staffing communications
- June: Board adopts final budget
Current Year Budget Documents
Additional School Finance Information
There is widespread agreement that the education funding formula in Minnesota is broken. There is currently a state task force studying the issue. Each year by statute, the state publishes a school funding disparity report and it shows that disparities are increasing and rural districts are negatively impacted. There is also an increasing reliance on local referenda. Local referenda provide local funding and local control.