Minneapolis Schools budget deficit could be double original estimate

Minneapolis school officials are warning of an even larger budget deficit next year than first expected.

District leaders had said next year's budget gap would exceed $20 million, but they now estimate it will be between $30 million and $45 million.

Peggy Ingison, the district's chief financial officer, said the deficits are the result of federal stimulus money that is running out, along with uncertain and likely less funding from the state and cuts are certain to affect classroom instruction and teaching jobs.

"We wouldn't be able to probably continue to totally protect the classroom with this level of cuts," Ingison said. "Neither will we be able to avoid, with such a significant portion of our budget related to wages and benefits, any staff reductions."

Ingison said school districts across Minnesota face further uncertainty because they must set their own local budgets before a state budget is in place.

During a school board meeting Tuesday night, Ingison broke the deficit into three areas:

- The district won't have about $15 million it had relied on during the past two years from the federal stimulus.

- The district expects it will lose between $10 million-$15 million in state funding, given its best projections for how lawmakers might tackle the state's own budget deficit.

- The district faces uncertainty in what labor costs it will have to pay out, given a recent arbitrators' ruling in a dispute over teacher pay raises that the district owes teachers as much as $17 million in back pay.

Ingison said all Minnesota school districts are flying blind because they have to approve their budgets before the state solves its budget problems.

"It'll be difficult for us to have any indication of how the state is planning to manage its budget deficit prior to the time that we have to make some decisions," she said.