Thanks to The North 40 Tavern for their support. A north woods tavern somewhere in the middle of a big city. They regularly rotate tap beers, so stop in to see what’s currently flowing.
The ISD 197 School Board reviewed next year’s budget and took the first step in approving a potential capital project levy to go before voters in the fall.
2026-2027 Budget
Finance Director Brian Schultz presented the 2026-2027 budget. The general fund total budget is about $111 million, up 1.4% from last year.
- Overall situation: The district faces rising operational costs due to inflation and a widening state funding gap. This is a state-wide trend that nearly every school district is grappling with. Since 2003, state education funding doesn’t keep pace with inflation. Even the historic education funding in 2023 didn’t close that gap, it just slowed the widening of the gap.
- Cuts: The district targeted $2.5 million in reductions to address the current economic reality.
- Savings: The board policy is to maintain an 8% fund balance, which amounts to the district’s savings account. Since COVID, the board has dipped into that fund balance to avoid cuts, but is in the process of restoring that fund balance. This budget will bring the fund balance to 4.8%.
- Future: Since that state funding gap continues to grow, future projections turn negative starting in the 2027-2028 budget year. In short, it gets more expensive every year to provide the same services—revenue just isn’t keeping up with the rising costs.
- Legislative help: The district did get help from the state legislature this session with a one-time approval to reassign funds. It’s not new money, but it does give the district flexibility to use existing funds in different ways. It helps, but it’s a limited amount spread over multiple years.
- Reaction: “Our job is to do what’s best for our learners, and it’s hard to do when we don’t get adequate funding to do it,” said Board Member Morgan Steele.
- Next steps: The presentation was only for review and feedback. The board will vote on the budget at the next meeting.
Capital Project Levy
Superintendent Peter Olson-Skog presented on a potential capital project levy that to address ongoing budget issues.
- Context: The district faces an ever-widening funding gap that’s forcing them to make cuts. It’s about a 2% gap every year between state funding and actual expenses.
- Cuts: The district already cut $750,000 from this year’s budget and another $2.5 million from next year’s budget. Those cuts were targeted to avoid the classroom, though the district already spends half the state average on administration and one-third less than the state average on school-level administration.
- Process: The first step is to submit a proposal to the Minnesota Department of Education (MDE) for review. Once that is approved, then the board can vote to put the levy on the ballot in November. So it’s not the final decision, but it is a required step to move toward putting a levy on the ballot.
- Levy: The proposed capital project levy will not add any new programs or buildings but will cover allowed expenses such as textbooks and instructional materials, physical security, equipment, cyber-security, building-related costs, utilities, and more. It’s a $4.6 million levy that will amount to a $168 property tax increase on a $400,000 home.
- Comparison: Even if approved, ISD 197 would remain near the bottom for taxes among metro area schools.
- Not permanent: If approved, this would not be a permanent fix to the funding gap. The district would continue to advocate at the state legislature to fix education funding.
- If it fails: Expect cuts. “Classrooms would be impacted, more and more deeply, as cuts compound over the years,” said Olson-Skog.
- Reaction:
- Board Member Marcus Hill: “It’s not an easy ask, but knowing that we’ve taken all of the steps in cost reductions already, successfully advocating with our legislators to provide us with the flexibility to use funds and move them in a way that we can offset more costs, this is that next step in allowing us to continue to move forward.”
- Board Member Tim Aune: “This isn’t willy nilly. This isn’t ‘oh we need another football stadium.’ I hope the board views it as an easy ask because it’s logical, it make sense, and it’s fair.”
- Vote: The board voted unanimously to approve the capital project levy comment and review.
- What’s next: MDE will review the levy and the board will vote later in summer whether or not to put the levy on the ballot.
Recognitions
Olson-Skog recognized three student groups:
- Student athletes from the Dakota Hawks adaptive softball team for their third state championship in a row.
- Branch Out’s Ambassadors for Respect program that visited fourth grade classrooms to talk about kindness, inclusion, and standing up for others.
- “Little Women” cast and crew who earned a slew of awards from the Hennepin Theatre Trust’s Spotlight Education program and were invited to perform at the Spotlight Showcase on June 9.
Other Items on the Agenda
- Superintendent’s report: Olson-Skog highlighted the graduating class of 2026, the district-wide fourth grade field day, the Oak Awards that highlighted ISD 197 students and staff for environmental impact, and thanked district staff for their response to increased ICE enforcement.
- Live Green: District staff presented on the Live Green sustainability program, including the bioretension basin at Two Rivers, energy and water use, waste management, more than $300,000 in grants, student projects, and upcoming work including a new reusable tray system at the high school, work at the Garlough School Forest, and turf-to-prairie projects coming to four sites.
- Triennial wellness policy: District staff also presented their 2026 Triennial Assessment for school wellness that’s required by the USDA. The report focused on child nutrition and physical activity and the district is meeting all goals.
- Tridistrict Advisory Council: District staff gave an update on the Tridistrict Community Education Advisory Council.
Engage
- More: Agendas and minutes for ISD 197 School Board meetings are available online.
- Watch: You can watch this meeting online. Board Members Tim Aune and Sarah Larsen also gave a video recap of the meeting.
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