Clay County Commission

Dan Haglund

Two Moorhead School District levies will greet voters this fall, including one for operations and another for capital projects.
An overview of this ask of taxpayers was presented by Moorhead School District Superintendent Dr. Brandon Lunak before the Clay County Board of Commissioners on Tuesday in Moorhead.
These levies are separate and new from the major bond approved by taxpayers in 2019 for a new high school, which opened just this past December.
The current operating levy was renewed by voters in 2016, with an existing authority of $223.66 per pupil in the district. It was started with taxes payable in 2018 to run for 10 years, and generates about $1.6 million annually. This amount is significantly lower than similarly-sized schools across the state.
A capital projects levy is currently not in place, but has the potential to generate additional revenue for technology and capital projects.
By comparison with other school districts, Moorhead’s $223 per pupil number is dwarfed by the likes of Hopkins, Eden Prairie, Edina and Burnsville, all Twin Cities suburbs. All of these districts have voter-approved operating and capital levies of more than $2,700 per pupil, with Hopkins ranging beyond $4,000.
This allows these similarly-sized districts to generate more than $20 million each, far greater than Moorhead’s $1.6 million.
Even Prior Lake-Savage and Farmington have levies at more than double what Moorhead currently has.
The referendum before voters would move Moorhead’s taxpayer revenue up to $5.9 million. It would keep the per-pupil operations amount at $223.66 but add $600.14 per pupil for operations.
“The amount we are asking for is the amount that the community said that they would support,” Lunak said.
Beyond inflation, which Lunak says has been slowing as of late, additional gaps from underfunding of special education and transportation have created the need to bridge the gaps by both cutting budgets and asking for additional revenue authority from voters.
The existing operating levy is about $1.7 million, the capital projects levy is $4.3 million and the required budget cuts totals $4 million.
This has created a deficit gap of approximately $9.5 million for the current school year, which runs its fiscal year from July 1, 2024, to June 30, 2025, and based on per-pupil revenue from the state.
Current MAPS revenues between the general fund ($108.6 million) and total operating capital ($5.8 million) total about $114.5 million.
But MAPS expenditures come to just over $117 million, for a deficit of $2.6 million. There is currently 2.23 percent of the year’s expenditures as yet unassigned, and this amount should come very close to the $2.6 million needed to cover the gap. Lunak says there should be a much higher “unassigned” amount for expenditures than at present.
Without a funding change, the next three years project to running unassigned expenditures at 1.32 percent next year, and deficits of 2.15 and 6.95 percent in the following two years.
“If we do nothing, and we have no new revenue, and we don’t maker any adjustments to our expenditures,” Lunak said. “You look out to fiscal years ’26, ’27 and ’28 … we would be in a deficit situation. And just by policy, our “unassigned” fund balance is supposed to be at 17 percent.”
Lunak did say budgets have already been trimmed through employee attrition, with about 30 positions within the district eliminated without back-filling them. He also noted that inflation has played a factor in recent budgets as well, but that trend has been leveling off somewhat.
“We’re trying to do something in terms of a combination of an increase in revenue with a balance of our expenditures,” Lunak said.
Two major budget gaps are in special education and transportation.
Special education expenses currently top out at $24.8 million, while revenues come in at $15.1 million, creating a deficit gap of $9.6 million. This gap has been covered by the general fund each year, which has eaten away at the “unassigned” fund balance each year.
Transportation expenses ($7.5 million) have far outpaced transportation revenues ($3.4 million), creating a budget gap of $4.1 million as well.
One partial remedy the school district has implemented within the past decade is running a tiered driver system, with the same buses and drivers routing elementary, middle school and high school students at different times each school day.
The busing contracts have recently been renegotiated down from $93 per hour per bus to $90, in an effort to save dollars as well.
Another expense Lunak highlighted is with technology software expenses. MAPS spends about $3.6 million on software, with about $2.4 million on teaching and learning, $602,334 on technology, $384,519 on operations and $144,366 on special education.
Lunak said this infusion is needed now to cover gaps in state education funding, stabilize the financial health and resource availability, as well as to ensure students have access to curriculum and technology.