Apr. 14—ROCHESTER — In an email sent to the administration of Rochester Public Schools in February, the district’s principals union expressed concern about the implementation of the new method RPS is using to finance its school operations.
Dubbed the “Balanced Budget Model,” the district leadership says it will give individual schools more flexibility in how they spend their resources and require them to rely less heavily on decisions from the central office. The change also would result in the redistribution of state and federal funding the district receives for specific student groups.
Despite the increased autonomy for schools, the new model has prompted hesitation from Rochester’s principals who are concerned about reductions taking place in their schools despite the fact that local voters agreed to provide more taxes for education during a referendum in November.
“I believe our balanced budget model comes from a place of well-intentioned district staff doing the best with the information that they have at the time,” wrote Overland Elementary Principal Jared Groehler, who’s also president of the principals union. “With that being said, I also want to share on behalf of our Rochester Principals Association membership some large concerns that we have with the process and the budget thus far.”
The letter, dated Feb. 18, was not released to the public. The Post Bulletin obtained a copy through a records request to the district.
The Rochester School Board approved the Balanced Budget Model in January. District officials are now in the process of building the budget for 2025-26 around the new model.
The principals’ letter outlined several concerns with the proposal. One is that schools are having to make cuts for the year ahead, despite the fact that local voters approved increasing property taxes dedicated to education.
Groehler highlighted that, at the time he sent the email, there was no staffing dedicated at the elementary level for reading specialists in the upcoming year. He also highlighted the fact that multiple schools were having to reduce the number of social workers.
“The thing that we are struggling with is the degree to which it seems that cuts are being made across our buildings, when we passed a referendum to avoid cuts,” Groehler wrote in the email. “When messaging comes that this will keep us from making cuts, and then it seems as though we are going to have to make significant cuts (school social workers, reading specialists, instructional coaches, equity specialists, and other positions), it leaves a lot of questions. It also leaves space for a lot of narratives to be created.”
Superintendent Kent Pekel responded to the principals’ letter three days later, on Feb. 21. He clarified that by the time the school board approves the 2025-26 budget in June, there will be funding designated for student supports, including $516,235 for reading specialists and curriculum.
However, he also clarified that the approval of more funding during the referendum would not necessarily equate to the same staffing levels in the schools. Instead, Pekel emphasized that the district is facing the prospect of decreasing enrollment. Since school districts receive both state funding and locally-generated taxes on a per-pupil basis, lower enrollment means less funding from both revenue sources.
In other words, he attributed the reductions in staffing to shrinking student body rather than district’s new funding model.
RPS’s enrollment for 2025-26 is projected to be 16,441. If that proves accurate, it would be a decrease of 730 students from the current year. It also would be a decrease of just over 1,700 since the district’s enrollment peaked at more than 18,000 during the 2019-20 year.
“Passage of the referendum could not shield our schools and our district from declining enrollment,” Pekel wrote in his response to the principals. “During the referendum campaign we said that if the referendum passed, we would not need to raise class sizes, close schools, or make major cuts in programs. All of those things are still true. We did not say there would be no budget reductions in the years ahead.”
According to a presentation on the Balanced Budget Model in January, the district’s central office would control 80% of school budgets, giving individual buildings more autonomy in how they choose to spend the remaining dollars.
The model would give schools flexibility when it comes to how they fund assistant principals, how many teachers they hire beyond the minimum required to meet the standard student-to-teacher ratio, as well as in regard to decisions related to reading specialists, supply budgets, equity specialists, and professional development, among other expenses.
Part of the Balanced Budget Model also proposed the redistribution of compensatory funding and Title I funding, which is state and federal aid given to districts that have a higher percentage of underperforming students.
Minnesota law only requires school districts to spend 80% of compensatory funding on the schools that generate the revenue, meaning that the district could use the remaining 20% for other purposes. Now, however, Rochester Public Schools will be dedicating 100% of the compensatory revenue to those schools that generate it.
According to the district’s presentation from January, there would be a “tighter focus on how schools can use (compensatory) funds based upon nine authorized uses.” In 2023, the Minnesota Legislature amended the number of allowable uses for compensatory aid, essentially removing schools’ ability to use the funding for assistant principals.
One of the other concerns outlined by the principals union was in regard to the “rigidity of compensatory funding.” Specifically, Groehler’s letter highlighted how there is not enough general funding to maintain the “current level of support” when it comes to assistant principals, which he went on to describe as “vital” for schools’ improvement plans.
He also stressed the importance of office staff.
“These receptionists are key to the safe and welcoming learning environment that we have created,” Groehler wrote. “You could call it belonging, you could call it family engagement, and many other areas.”
In his response, Pekel told the principals that the Minnesota Department of Education will no longer allow compensatory funding to pay for the staffing of assistant principals. Despite that, Pekel told the Post Bulletin on April 11 that the district is working to fund those positions through other means.
Pekel also told the Post Bulletin that the recently-approved version of the balanced budget model should be thought of as an initial version “because the system can only adapt to so much change in a single year.”
In a memo he released in January when the School Board voted to approve the new model, Pekel described it as a way to achieve two goals. One goal, he said, is that the model “balances the authority about funding and staffing between the school and central office levels.” The second goal, Pekel wrote, is that the efficiencies accomplished through the change will “enable the school district to balance its budget on an ongoing basis.”
In addition to addressing specific issues in the letter from the principals, Pekel said the changes overall are necessary in order to avoid perpetuating the status quo of lagging academic performance.
“I think that it is important to note at this critical juncture in our work that by almost every measure, educational outcomes in Rochester Public Schools have been in decline for many years — long preceding the pandemic,” Pekel wrote in his response to the principals. “We are doing great work to shift that downward trajectory through changes … However, if the changes we are putting in place do not also extend to how we use our resources of money, people, and time in our schools, we will not be able to realize the improvements in student achievement and other outcomes that I know we are all committed to.”