MANKATO — Despite challenges on the horizon, the Mankato Area Public Schools Board is optimistic about the budget for the 2026-27 school year.
On the property tax levy side of things, the district would see an increase of around 10%, from $36.4 million to $40.4 million.
As for the budget itself, that’s balanced, with the district bringing in slightly more than it plans to spend.
Property taxes account for anywhere between 20% and 25% of the district’s revenue each year. The largest chunk of funding MAPS gets, around two-thirds each year, comes from the state. And that’s where some of those challenges are coming from.
“We do have some restricted funds for programs that are required (by the state),” said Amanda Heilman, MAPS director of business services. “(Those) are not fully funded by the state, and so those can’t go negative and when they do go negative the general fund ends up picking up the subsidy of that.”
That explanation was part of a broader discussion on the district’s unassigned fund balance, a sort-of bank account for the district with money they can direct anywhere.
Despite projections of a balanced budget for the 2026-27 school year, that balance is expected to drop from about $18 million at the end of this month to $16 million by the end of June 2027.
That amount is enough to fund the district for around 45 days, and represents about 12% of the total general fund. That amount is “moderate” and “modest,” as Supt. Paul Peterson put it, compared to their standing goal of 8%.
The unassigned fund balance is where the difference is made up when funding doesn’t match the need for required or important programs. For Peterson, taking from there is a better option than the alternative: cutting teachers and/or other programs.
“We do not intend to balance our budgets on the backs of our staff,” Peterson said. “We don’t see that as a long-term solution; taking out of the very people who we are asking to move us all forward.”
Still, some board members were concerned about what the future might bring, with many pointing fingers up towards the state legislature.
“I just want to emphasize that the state funding is not keeping pace with expenditures,” board member Elizabeth Hanke said. “We have this reserve (the unassigned fund balance) and we have this cushion, but we are spending into that cushion.”
Heilman confirmed those stances — both that funding has not kept up with inflation and that the solution the district has found involves spending from the unassigned fund — saying that they would need around a 19% increase in funding from the state to keep up with inflation.
It’s bringing a challenge many people are facing in their homes to the school district: how to balance a budget in this economy.
“We’re all living in this economy but it still is true that the state of Minnesota has not kept up with its public education finance. And that’s just the reality of (our situation),” Peterson said.
“There are some big items we need to engage in,” he continued. “In the (2025 legislative session), the governor and the legislature set out a $250 million special education goal. Basically asking the systems across the state to find a quarter of a billion dollars for special education. And if we can’t find it, it’s coming out of the cross-subsidy. That is a loser for school districts.”