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Minneapolis Public Schools faced with finding path out of 'impending fiscal crisis'

The Minneapolis Board of Education is meeting Tuesday night and will discuss the five-year projection of the district's financial position.

MINNEAPOLIS, Minnesota — Minneapolis Public Schools (MPS) is facing an "imminent financial crisis," according to the district. 

In a memo from November 29, MPS Senior Financial Officer Ibrahima Diop said sticking with the status quo is "not sustainable" and that the time to effect change is "running short." 

The memo states, "Without significant changes, MPS will run out of money during the 2024-2025 school year and be unable to operate as it does now."

The Minneapolis Board of Education is meeting Tuesday night and will discuss the five-year projection of the district's financial position. You can watch the meeting live, here

According to MPS finance officials, there are three main reasons behind it. 

MPS has been using federal COVID relief aid to balance its budget but those funds must be fully depleted by September 2024. While pandemic aid has delayed the issue, "funding is ending, and the cliff is nearing."

Meanwhile, enrollment continues to decline with no signs of that changing. 

MPS experienced about a 17% decrease in student enrollment in the last five years. Only about a fifth of enrollment loss is to charger schools or open enrollment. The biggest reason numbers have been declining is that there are fewer children living in Minneapolis. According to American Community Survey, the number of children ages 5 and under living in Minneapolis fell 17% between 2020 and 2021. When it comes to children ages 6-15, numbers fell 6.4%.

Other cities, including Denver, San Francisco, Chicago and Boston, are also experiencing declining enrollment. 

"Part of it is declining birth rates, part of it is the high cost of living in urban areas, part of it is cities weren't great places for kids during the pandemic... the schools were closed or remote longer, so some families are moving out for those reasons," said Marguerite Roza, director of the Edunomics Lab at Georgetown University. The research center focuses on education finance. 

Roza said she believes MPS will have to close schools in order to fix its problem. 

About 29,000 students are currently enrolled at MPS. The district projects enrollment will decline to just over 23,000 students in the 2027-2028 school year. Meanwhile, MPS is constructed financially to serve about 40,000 students. 

"When you have too many under-enrolled buildings, you either have to have them staffed with very few staff that play a lot of different roles or you need to close them and consolidate the kids... if there's an appetite for the full complement of staff," Roza said. "We've seen in Minneapolis that parents are expecting to see art classes, and music classes, and things like that in their schools. If so, then we've got to have a critical mass of students to provide those." 

MPS has also seen costs increase in recent years. This all comes at a time when the need is great. 

"The kids have real needs with this money and so the money isn't being spent right now on addressing the deep needs that kids have coming out of the pandemic with really big gaps in their learning," Roza said. "So the next several years are going to be really tough years for Minneapolis Public Schools." 

Budget recommendations for the 2023-2024 school year will be presented in the spring. The board will vote on a final budget in June. 

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