Amid ongoing questions about transparency, St. Paul’s school board on Tuesday night approved a $1 billion budget for the upcoming school year that will make around $114.6 million in cuts and relies on $37 million in deficit spending.

The cuts come as significant federal pandemic aid from the American Rescue Plan is set to expire, meaning reductions in many programs and positions including arts and music, special-education interpreters and after-school programs.

Last year’s budget had about $128 million in ARP funding that won’t be there in the 2024-25 school year.

“It’s not lost on me that for a brief moment in time, we saw what was possible if there was a greater investment in public education,” said school board chair Halla Henderson. “Now we are here having to say we can no longer provide that same level of support.”

St. Paul Public Schools leadership had known since last year that big cuts were likely for the upcoming school year. And district budget chief Tom Sager noted more cuts are likely down the road unless SPPS gets additional revenue, such as increased state funding.

The end of pandemic aid is just one part of the district’s financial difficulties. Declining enrollment has meant less per-pupil funding from the state. SPPS is the state’s second-largest school district, with 33,000 students, but it’s down about 4,000 students from about a decade ago. Declining enrollment stabilized this year, but it’s still left a hole for the district. Inflation has also raised costs.

Transparency concerns

Members approved the budget in a 6-1 vote, with first-term member Carlo Franco opposed due to his concerns with transparency in the budget creation process. Franco said he appreciated district administrators’ efforts to explain the process and how they shaped overall priorities but noted their proposal to the board didn’t fully explain program cuts.

“The biggest concern that I still have, that we haven’t really talked about, was the impact to our students,” he said ahead of the vote. “Due to the outstanding questions and lack of clarity on how our adopted FY 25 budget will actually impact our scholars’ learning experience and growth in the next school year, I’ll be voting no.”

Board member Uriah Ward, who opposed last year’s budget on similar transparency grounds, said district efforts to meet with the school board throughout the process were an improvement over past years. He said he understood parent and community complaints about transparency and cuts, but said the “pain” of reductions was spread around equally.

“As far as I can tell, we are doing about as good as we can with a really bad situation,” he said, later adding: “Our board is working in really specific concrete ways to change the way that we involve the community and decision-making processes.”

The district has given overviews of how cuts would affect schools, though specifics on many program impacts are yet to be seen. The most recent explanations on cuts come from April and include:

Reductions for school lunch that will result in menu changes, and potential school bus route cancellations.

Loss of additional custodial staff supported by federal aid.

Credit-recovery programs for students at the four high schools with the lowest graduation rates will now only be available after school or in the summer.

Amid cuts, the district also plans to increase spending on early education like pre-K and early-childhood family education with the goal of preparing students for elementary school so they can meet third-grade literacy standards.

Members first saw the 2024-25 budget proposal at their meeting last Tuesday. While district administrators had kept the board updated on the budget process since earlier this year, this was the first time the school board saw what they approved this week.

An original projected deficit of more than $150 million shrank to around $108 million this year, but the district still had to make cuts to balance the budget.

The budget still tops a billion, despite cuts, because of what Sager described as “favorable bond sales,” which grew spending on previously approved construction and renovation projects by close to $90 million. So even with more than $100 million in cuts, the budget is still in the 10-figure range like last year’s.

The 2024-25 budget also marks another year where the district is tapping into its reserve funds to help reduce program cuts. To avoid further reductions, the district is spending $37 million from its reserves, leaving behind $36.4 million — which is slightly above the 5% reserve threshold set by the school board.

Major cuts have been on the horizon at St. Paul Public Schools and many other districts for a while. About 70% of metro-area school districts faced shortfalls this year, according to the Association of Metropolitan School Districts, and St. Paul had one of the largest.