Budgeting error results in $20M shortfall for Robbinsdale Area Schools

Robbinsdale Area Schools is facing a deficit of millions of dollars next year due to an error in their budget process.

Kristen Hoheisel, the school district’s chief financial officer, said the shortfall for the 2025-26 fiscal year is somewhere between $19 and $21 million, and the district is on track to be in a statutory operating deficit by the end of the current fiscal year.

Statutory operating deficit means the school district is over budget by more than 2.5% and will need to submit a corrective action plan to the Minnesota Department of Education.

Hoheisel says at this point the school district is only expected to trim about $3 million of the more than $17 million in proposed cuts for the current fiscal year and will end up in deficit spending.

The issue stems from an error when mocking up the district’s expected revenue.

Robbinsdale Area Schools brings in around $200 million in revenue. According to Hoheisel, $180 million of that total comes from general revenues, and the remaining $20 million is compensatory funding — funds reserved to address the needs of underperforming students.

But when implementing the budget, the school district says it bundled the compensatory funds with the general revenue and then added it again separately, creating the appearance of $20 million that the district didn’t have.

Now, the school district says it has to have difficult conversations about how to move forward, which could mean closing buildings or implementing a tax levy to cover the deficit.

“Rdale’s commitment to our students and community remains unwavering,” Superintendent Dr. Teri Staloch said in a statement. “The work is just beginning as we reimagine what it means to be a student here in Rdale, and we’re inviting the community to help shape a future that is both resilient and inspiring. District leaders look forward to engaging with our school community over the next few months. Together, we’ll turn today’s challenges into an even brighter future for every Rdale student.”

The school district will hold a town hall to address the budget situation from 6:30-8 p.m. Wednesday at Cooper High School.