Anoka-Hennepin School Board Sets Stage for 2026 Budget Amid Rising Costs

ANOKA, Minn. — Following a challenging budget cycle marked by protests from students, the Anoka-Hennepin School Board is off to a smoother start with its budget process for Fiscal Year 2026. On Feb. 24, the board amended its 2025 budget, finalizing crucial figures that will guide discussions for the upcoming fiscal year.

Chief Financial Officer Michelle Vargas explained the significance of the amendment, stating, “(The amendment) before basically leads us into these updated numbers. We’re starting now with a different projected fund balance, and it feeds into these costs that we’re looking at.”

For the 2025 fiscal budget, projections now include a $20.2 million revenue increase, attributed mainly to a $3.1 million rise in special education reimbursements. Additionally, state aid saw a $9 million increase over initial forecasts despite a setback of 449 adjusted pupil units from earlier estimates.

Expenditures for the year also increased by $15.6 million. This rise includes $3 million allocated for special education contracted services and settled contracts amounting to $1.2 million for paraprofessionals and $346,000 for office professionals.

With amended revenues set at $737,659,018 and expenditures at $758,019,525, the projected fund balance stands at $209 million. With this solid foundation, the board is now poised to begin planning for the 2026 budget.

As Vargas prepares to present the preliminary FY26 budget, she underscored that the current budget reflects any unfunded mandates from the state. “The legislative session is ongoing through May 19, and with $616 million in surplus, the possibility remains that some or all may be funded by the budget vote scheduled for June 23,” Vargas noted. “All of those adjustments have been made with those assumptions in here at this time.”

Superintendent Cory McIntyre added, “If nothing happens legislatively, we’re just planning ahead.” He mentioned that district representatives have actively been seeking funding from the legislature, aligning with advocacy from other districts.

“The good news is, we’re seeing all the districts are really kind of on the same page,” McIntyre said. “I think we’ve been pretty consistent with the message. I think it’s getting through — being able to tell our story of, ‘What does this really mean in real numbers if nothing changes? We’ll try to stay on message.”

Looking ahead, revenue assumptions predict a net increase of $6 million for the district. Despite a decline in pupil units expected to cost $2.8 million in revenue, the state general education revenue is projected to compensate with an increased $3.9 million. The district is also anticipating an influx of $5.4 million for special education revenue reimbursements and additional funding for support and English learner programs.

On the expenditure front, calculations indicate a net increase of $14.1 million. Anticipated salary hikes of 2.5% and benefit increases of 5% for upcoming contract negotiations are projected to add around $14 million to the budget. However, a reduction of 10 full-time positions is estimated to cut $900,000 from expenditures.

Additional costs include $2.2 million for the second year of settlements for paraeducators and office professionals and $7.5 million earmarked for charter transportation and utility increases. Phase II budget reductions are also set to commence, totaling $8.5 million, with $700,000 from realignment and $5.1 million from strategic investments.

As anticipated increases to adjusted pupil unit formulas and aid aim to balance revenues and expenditures nearly equally, the next budget vote is scheduled for May 19, where the board will consider the proposed FY26 budget. A final vote is also on the agenda for June 23.