The Hastings School Board reviewed the district's proposed 2026-27 budget during its June work session, receiving an overview from Director of Finance and Operations Jennifer Seubert that highlighted declining enrollment, rising personnel costs and a projected reduction in the district's general fund balance.
The proposed budget calls for total revenues of approximately $94.2 million and expenditures of $97.3 million across all district funds, resulting in a planned drawdown of fund balances totaling about $3.16 million. Despite the deficit spending, district officials noted that Hastings Public Schools remains in a strong financial position with projected ending fund balances of approximately $47.5 million across all funds.
Within the district's General Fund, which finances day-to-day operations, revenues are projected at $71.3 million while expenditures are budgeted at $73.7 million. The district expects its unassigned General Fund balance to decrease from approximately $19.3 million at the end of the current fiscal year to about $17.9 million by June 30, 2027.
One of the most significant factors affecting the budget is enrollment.
Seubert reported that the district is budgeting for 4,218 adjusted pupil units (APUs) in 2026-27, approximately 100 fewer than the current year. The enrollment projection reflects a continuing trend of declining student numbers that has affected school districts throughout Minnesota.
District projections show K-12 enrollment falling from 3,880 students this year to 3,797 students next year, a decline of nearly 84 students or 2.16 percent. Enrollment is projected to continue gradually declining over the next several years, reaching approximately 3,595 students by the 2031-32 school year.
Because state funding is largely driven by student enrollment, fewer students translate into reduced revenue growth for the district.
Personnel costs remain the largest component of the district's budget.
According to the budget presentation, salaries and benefits account for more than 77 percent of General Fund expenditures. Salaries represent 52.3 percent of spending while employee benefits account for another 25.2 percent.
The district is budgeting nearly $1.58 million in additional salary and benefit costs next year. Those increases reflect negotiated contract settlements, step and lane changes, insurance costs and staffing adjustments.
Overall payroll expenditures are expected to rise by nearly $1.6 million, making personnel costs the primary driver of expenditure growth. Additional increases are budgeted for utilities, alternative learning programs and early childhood screening services.
The budget includes a modest reduction in teaching staff tied largely to enrollment trends.
Districtwide teacher staffing is projected at 282.71 full-time equivalent positions for 2026-27, down 1.42 positions from the current year. Elementary classroom staffing will decrease by one position, while districtwide staffing will decline by a half-position. Those reductions are partially offset by increases in elementary specialist positions and special education staffing.
Special education staffing will increase by 2.2 full-time equivalent positions next year, while elementary specialists will increase by one position. Secondary classroom staffing will also increase slightly.
State aid continues to provide the majority of funding for district operations.
The budget projects approximately $45.3 million in state aid revenue within the unassigned General Fund, representing about 75 percent of General Fund revenue. Property taxes account for roughly 16 percent of revenue, while federal aid contributes approximately 2.5 percent.
Among the positive revenue changes included in the budget are increases in general education formula funding, special education aid, English learner funding and interest earnings. However, those gains are partially offset by reductions in levy revenue and the expiration of several grant programs.
The district also outlined plans for facility improvements and long-term maintenance projects.
Through the Long-Term Facilities Maintenance (LTFM) program, Hastings plans to invest $1.6 million in building improvements during 2026-27. Major projects include high school elevator modernization, parking lot maintenance, air handler replacements, roofing and HVAC upgrades, plumbing improvements, security enhancements and building repairs throughout the district.
Capital projects totaling $250,000 are also planned, including grounds equipment, custodial equipment, safety netting at Todd Field and landscaping improvements at Kennedy Elementary School.
The budget presentation also highlighted the district's existing operating referendum, which generates approximately $4.2 million annually. School officials are expected to ask the board in July to renew the referendum under authority granted by the Minnesota Legislature in 2023, allowing boards to extend existing voter-approved operating levies without a new election under certain circumstances.
Seubert noted that the adopted budget will continue to be refined throughout the year as actual enrollment figures become available, employee contracts are finalized and state funding adjustments are made. The district will formally revise the budget later this year after receiving updated enrollment counts and audit information.
Despite projected enrollment declines and rising costs, district officials said the proposed budget maintains support for classroom instruction, student services and district operations while preserving healthy reserve balances for future financial stability.