May 3, 2024 - News

Minneapolis Public Schools backtracks, says budget deficit "may increase" after labor deals

The Minneapolis Public Schools logo: a stylized 'M', 'P' and 'S' all enclosed within circles.

Photo: Kyle Stokes/Axios

Minneapolis Public Schools officials, retracting an earlier statement to Axios, say a new teacher union contract could worsen the district's budget shortfall.

Why it matters: Minneapolis schools are projecting a $110 million budget deficit with millions in spending cuts lined up for next year and potential school closures looming.

What they're saying: In an interview Thursday, school district CFO Ibrahima Diop told Axios the communications mistake was likely the result of this year's difficult — and fluid — budget-writing process.

  • "Between when you sent [your question] to [MPS] communications and when they were drafting a response," he told Axios, "the numbers were changing … This week, it's been going up and down."

The big picture: As MPS administrators plan these cuts, they've also been negotiating multiple labor contracts. For months, they've warned that settling with these unions would likely cause the "budget gap" to grow.

Last week, MPS superintendent Lisa Sayles-Adams repeated this warning, telling reporters the deficit forecast "will grow as the result of settling all our contracts" — including the new teacher contract.

  • Axios was at this press conference and questioned the superintendent to confirm details.

Yes, but: On Wednesday, district spokesperson Mary Alice Rosko sent Axios a new statement contradicting Sayles-Adams, which Axios included in a Thursday story.

  • "If ratified," the statement read, "the tentative teachers' agreement would not require MPS to increase the current projected $110 million-dollar budget gap."
  • Rosko added that other pending contracts "could increase the budget gap." (MPS has since also reached an agreement with classroom aides.)

On Thursday, Rosko contacted Axios again saying that the statement she had sent the prior day was "not accurate."

Zoom in: Following additional questions, the district then referred Axios to its CFO. In the interview, Diop told us that MPS did expect the new labor agreements to increase the district's costs.

  • Their $110 million shortfall forecast accounted for some of the costs — but Diop said the district also knew it would likely need to spend beyond this forecast to settle the contracts.
  • Diop said the school board set "parameters" for negotiators that matched this expectation. The teachers' contract was settled within those "parameters," but that doesn't mean the deficit won't grow after all the contracts are settled.
  • The erroneous MPS statement, Diop told Axios, likely sprang from "confusion between 'parameters' and the budget."

The fine print: In the interview, Diop didn't say how much the new contracts will cost.

What's next: Teachers will vote on the new union contract starting next week. The board could ratify the deal on May 14.


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