Revised Cloquet Schools budget projects nearly $800K deficit

The new budget estimate includes a $793,046 shortfall in the unassigned fund balance.


CLOQUET — At its Monday, Feb. 13 meeting, the Cloquet School Board approved a revised budget for fiscal year 2022-2023 that includes a $793,046 deficit in the district’s unassigned fund balance.

The figure marks an approximately $250,000 deficit increase compared to the budget approved at the board's June 23 meeting. Cloquet School District Business Manager Candace Nelis explained that the change reflects negative trends in enrollment.

“Seeing kind of how our enrollment report has changed even from just the beginning of the year until now, Dr. Cary and I felt that we needed to make an adjustment to those numbers just based on what that enrollment report looks like,” Nelis said.

The latest district enrollment projection included 2,725 students across the district — down 50 students from the June enrollment report that forecasted 2,750 students.

“When we started the year we were right at that projection, but we started to lose kids and we actually lost kids at a little bit faster rate than what we normally did,” Cloquet Superintendent Michael Cary said. “If I’m being fully honest, we don’t know 100% why right now.”


The mental health toll as a result of the COVID-19 pandemic was mentioned as a possible reason for the decline, especially at the high school level.

“What happens is that if kids are making good progress towards graduation, they stay. If they’re not, they leave, and they do other things,” Cary said. “The disruption that happened with a lot of our freshmen and sophomores two or three years ago when the pandemic hit, I’m thinking that we’re probably seeing those kids start to choose other paths and that’s probably a chunk of it.”

Two bills, one in the House and one in the Senate, have been introduced to the Minnesota Legislature to bring in funding for the county's project.
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A steady rise in the number of families electing to homeschool their kids was another possibility, officials said.

Earlier this summer, district leaders agreed to new contracts for its union secretarial, principal and paraprofessional units, which included a larger than normal increase in salary to help offset rising inflation and to help retain employees. Cary said that while it was the right thing to do, it is an additional factor in the unassigned fund balance’s debt increase.

Both Nelis and Cary said they are optimistic that the final debt figure will come in lower than what’s projected in the revised budget when it comes time for the district’s audit.

The district tends to budget conservatively on the revenue side, Cary said, with revenues often coming in higher than expected and expenditures coming in lower. For example, an estimated deficit of $500,000 can fall to around $150,000 or be eliminated all together, he said.

“We anticipate that that will probably improve by the end of the year by the time we hit audit, because again it’s still a projection, it's just a little more accurate projection,” Cary said. “But that’s why we are where we are.”

Jake Przytarski is a reporter for the Cloquet Pine Journal covering a mix of news and sports.
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