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For over a decade, Brooklyn Center Community Schools (BCCS) has made a commitment to not only balance our budget on an annual basis, but to emerge from statutory operating debt and build a fund balance. We are dedicated to providing transparency in the responsible use of taxpayer dollars. While school finance is a complex topic, by presenting a few key ideas and the history of the BCCS budget, we hope to inform our community on how we maintain and balance our budget year to year. 

 

To begin, let’s define a few terms.

 

Brooklyn Center Community Schools’ “fiscal year” runs July 1 through June 30. While the fiscal year does not coincide with the calendar year, district funds are allocated and spent during this time. Long before one  fiscal year comes to a close, we begin the budgeting process for the upcoming year by carefully reviewing each school’s and department’s expenses to determine what needs to be adjusted or maintained in order to provide the best services possible for our students. 

 

During the budgeting process, we review revenue projections (the money we are expected to receive from the state, federal sources, and property taxes, and other local and state grants), expenditure projections (the money we expect to spend throughout the fiscal year), and expected enrollment numbers for the upcoming school year. Taking all these factors into account, schools and departments will then receive their allocations (their funds for the year). Allocations are prioritized toward student needs, yet balanced with district needs to ensure compliance with state and federal regulations.

 

According to our board policies, the district works to maintain a fund balance (money set aside for financial stability and unforeseen costs), of between 7% and 15% of the prior fiscal year’s expenditures. According to state statute, a school district is considered to be in “Statutory Operating Debt” if the amount of the operating debt or fund balance is more than negative 2.5% percent of the most recent fiscal year's expenditure amount. Our fund balance is the total accumulation of operating surpluses and deficits since the beginning of the district’s existence. 

 

Next, let’s explore the recent history of the BCCS budget.

 

Brooklyn Center Community Schools was in statutory operating debt from 2002 until 2014, meaning for thirteen consecutive years the district was operating while in debt. In 2015, Brooklyn Center Community Schools reported a positive fund balance of 1.05% and has maintained a positive fund balance since that time.

 

The process of emerging from statutory operating debt and maintaining a positive fund balance was done by careful preparation and planfully setting aside funds to increase the fund balance over time. The district continues to remain out of statutory operating debt by living within our means.

 

Between 2020-2022, Brooklyn Center Community Schools received additional funds from state and federal agencies to meet the changing needs of education throughout the COVID-19 pandemic. These funds (known as ESSER and ARP dollars) were used to serve our community in various ways while we were in and coming out of isolation. In 2022, state and federal pandemic funding was no longer provided to public education. Because of this, the district had to make some tough decisions.

 

In order to balance our budget, at the end of the 2022-23 school year, BCCS made significant reductions in support staff (many of which were funded using federal ESSER and ARP dollars) and cut the budget by $4.5 million.

 

Now, let’s look at the current BCCS budget.

 

The 2023-24 school year budget projects $34.6 million in General Fund expenditures. The district expects to receive $34.5 million in General Fund revenue, resulting in a projected $141,000 decrease to fund balance.

 

Our revenue stems from the following areas:

1. The General Fund Formula (money that comes from the state based on enrollment numbers)

2. Additional state funding (money based on factors like Basic Skills revenue, English Learner revenue, Achievement and Integration, etc.)

3. Local levies (property taxes including increases approved by residents through a referendum election)

4. General Education Revenue (money that comes from the federal government and is restricted to be used for specific purposes and requires compliance with federal and state guidelines)

5. Grants, Scholarships, and a small amount of interest earnings

 

 

Here are some additional factors that influence the BCCS budget:

• Since emerging from the pandemic, we have seen a state-wide reduction in student enrollment in public schools. As school districts rely heavily on the basic funding formula based on student enrollment, less funding was available to us this year.

• In May of 2023, The Minnesota Legislature passed a K-12 education bill that provides an unprecedented increase to the general education funding formula by 4%. While the impact will provide short-term budgetary relief, new unfunded state and federal mandates, as well as unmatched funds to keep up with the cost of inflation, will increase costs for school districts.

 

Finally, let’s look toward the referendum election on the November 7, 2023 ballot.

 

Brooklyn Center Community Schools works diligently to live within our means but also works at finding new and innovative ways to ensure the needs of all of our students are met. To continue to serve the needs of our students and families, Brooklyn Center Community Schools ISD #286 will hold a one-question referendum election that will allow voters to consider an increase to the district’s current operating levy by $300 per student.

 

If the operating levy passes on November 7, 2023, property owners can expect a slight increase in their annual taxes starting in 2024. Click here to estimate the tax impact on your household.

 

This increase in property taxes would generate an estimated additional $686,820 to the district’s annual revenue. Funds would be spent directly on impacting the student experience in our district including the recruiting and retention of high-quality staff members, programming, maintaining current class sizes, providing additional support for students’ social and emotional wellbeing, and providing greater financial stability while limiting future budget reductions.  

 

Click here to learn more about the referendum and voting information.