The Carlton School District has approved its 2019-20 budget with a projected deficit of more than $580,000.
School board members LaRae Lehto, Sue Karp, Tim Hagenah, Sam Ojibway and Ann Gustafson voted to approve the budget and Jennifer Chmielewski voted against it.
The budget, which Carlton Superintendent Gwen Carman said uses “conservative” estimates for revenue, was based on a projected enrollment of 429 students next year.
“It’s a very, very difficult budget. We have made at least $150,000 in reductions, but we still have a deficit budget,” Carman said at the meeting. “As we discussed, we know this is not a sustainable plan going into the future, but we made some decisions based on the size of our incoming senior class to not make radical changes.
"We know that there are some things that are still unknown with this budget," she said.
The budget also includes a 2% pay increase for teachers in 2019-20 after the board unanimously approved a new contract with the Carlton Education Association. The new contract will also include a second 2% increase in 2020-21.
After three consecutive years of deficit spending, most of Carlton’s unrestricted fund balance will be wiped out.
After the audit of its 2017-18 budget, the district had more than $1 million in its unrestricted fund balance, which included a $130,000 deficit from the previous budget.
There was a projected deficit of more than $300,000 in 2018-19 that also factored in the sale of the district’s school buses to 4.0 Student Services in July 2018 for approximately $250,000. Carlton now contracts with the company for transportation services.
The district won’t know the amount left in its fund balance until after the audit of the previous year is completed in October, but Hagenah, the board treasurer, said he expects there to be a little over $1 million in the unrestricted fund before the deficit from 2018-19 is subtracted.
Declining enrollment is among the reasons for the district’s decreased funding. In 2018-19, 322 students left the district, according to the Minnesota Department of Education. Open-enrolled students take the funding the district would receive from the state and federal government with them to their new district.
Earlier this year, the board declined to renew the contracts of five teachers because of enrollment and budgetary concerns.