A $150 million budget shortfall projected for St. Paul Public Schools is slightly smaller than originally expected, but the school district will still face challenges balancing its books for the coming year.

New figures from this month show the district has a slightly improved budget picture as it prepares its upcoming budget. Now the state’s second-largest school district faces a $107.7 million deficit, SPPS finance chief Tom Sager told school board members at a meeting Tuesday night.

St. Paul Public Schools enacted a $1 billion budget last June and a deficit topping at least $100 million has been on the district’s radar since last year.

The gains won’t solve all the school district’s problems, Sager said, but are still “good news” as the district faces the end of hundreds of millions of dollars of federal pandemic-era aid from the American Rescue Plan.

Even with a slightly better picture, the district is still spending too much and will probably have to make cuts.

“Nonetheless, we are deficit spending this year. And so we have to course-correct that to create a structurally balanced budget,” Sager said.

What’s behind the slightly improved picture in February’s forecast? Most of it comes from $25 million in federal pandemic aid cash for one-time expenses like construction and maintenance.

There are a few more students than originally expected — 450 more, per January’s enrollment figures — meaning the district can expect about $4.2 million in additional state aid. Enrollment, however, remains significantly lower than it was in the 2018-19 school year, when SPPS had 38,000 students. The decline stabilized at around 33,000 this school year.

Another $13.1 million comes in state unemployment insurance savings, additional state aid and compensatory aid.

Making cuts will be particularly challenging for SPPS this year as it faces the threat of a strike by its educators union, which has around $112 million in requests. The district said it could only increase spending by $12.4 million.

School leaders are expected to get their budget allocations by March as the district continues to put together its budget.

Related Articles

St. Paul teachers union authorizes strike vote as contract negotiations continue

St. Paul’s Joe Gothard named finalist for superintendent job in hometown Madison, Wis.

St. Paul charges: Man who accidentally shot himself at elementary school left his holster at home

St. Paul schools addresses racial covenant at Hamline-Midway school building

Snow days are returning for St. Paul students — at least the first two times during the school year