Fiscal Realities
Understanding Funding in Centennial Schools
Strong schools rely on stable, sustainable funding. While Centennial Schools continues to plan carefully and manage resources responsibly, state and local funding structures have created ongoing challenges that affect all Minnesota school districts.
This page explains how public schools are funded, the realities shaping Centennial’s financial picture, and how this connects to the district’s long-range planning efforts through Centennial Forward.
Operational vs. Capital Funding
Public school funding is divided into two main categories:
- Operational funding supports the day-to-day learning experience — teachers and support staff, classroom materials, transportation, technology, and utilities.
- Capital funding supports the physical environment — major maintenance, renovations, and new construction.
Both are essential, but each comes from different sources and is governed by different laws. Operational dollars cannot be used for major facility projects, while capital funds cannot be used for staffing or programs.
Legislative Funding: Short-Term Stability
The 2024–25 legislative session provided some short-term relief and flexibility for school districts, offering stability in the near term but no long-term solutions.
New education mandates were not introduced, allowing districts to plan budgets with greater predictability. The legislation also included:
- An extension of unemployment benefits for hourly school workers
- Flexibility in facility maintenance funding to address critical needs
- Expanded use of food service funds
These adjustments are appreciated and provide short-term benefits. However, they do not address the long-term funding gap facing Minnesota schools.
Reductions in Future Education Funding
While the 2024–25 measures help in the short term, the state did not provide new, long-term funding in the next two-year budget cycle. Even more concerning, a $420 million statewide reduction in education funding is scheduled for the 2028–2029 school year.
The state’s Blue Ribbon Commission on Special Education has been tasked with finding $250 million in savings. If agreement is not reached, automatic cuts will begin in 2028, reducing special education funding by $125 million per year statewide.
Centennial Schools is monitoring this issue closely, as potential reductions would directly impact resources and services for students.
The Bigger Picture: Funding and Inflation
Education funding in Minnesota has not kept pace with inflation for more than two decades. Since 2003, Centennial Schools would have received approximately $9.5 million more each year if state aid had increased at the same rate as inflation.
This longstanding structural issue creates significant strain on the district’s ability to provide the programs, staffing, and student support that families expect — all while meeting new state requirements and rising costs for staffing, technology, and curriculum.
Districts like Centennial must make difficult choices to balance budgets while protecting classroom learning as much as possible.
Levies Help Address Funding Gaps
To offset the gap between state funding and actual costs, school districts depend on local taxpayers through operating levies.
- The metro average for districts with operating levies is more than $1,500 per student. Centennial’s current levy is approximately $975 per student, significantly below the metro average.
- Nearly 70% of metro-area districts have a dedicated technology levy, averaging $6.2 million annually to support student devices, cybersecurity, and safety systems.
- Centennial does not have a technology levy, meaning these expenses come directly from the general education budget, reducing funds available for classrooms, teachers, and student programs.
Despite these challenges, Centennial remains committed to careful financial planning, transparency, and doing what’s best for students and the community.
Why Operational Funding Matters
Operational funding determines what happens in classrooms each day — the teachers, instructional materials, and student support that make learning possible.
When operational resources are limited, districts must make tradeoffs that can affect programs and class sizes.
At the same time, capital needs like facility updates and maintenance must be addressed through other means, such as bonds or levies. Both operational and capital funding are vital to maintaining strong schools.
How This Connects to Centennial Forward
Centennial Forward is focused on the long-term health of our school facilities, addressing needs related to space, safety, and sustainability.
While operational funding supports people and programs, Centennial Forward is currently focusing on the places and systems that make that work possible.
Together, they ensure that Centennial Schools can deliver the high-quality learning environments our community expects, both today and for future generations.
Stewardship for the Future
Centennial is committed to being a careful and transparent steward of taxpayer resources. Through the Centennial Forward process, the district continues to:
- Plan for future facility and learning needs,
- Engage the community in open discussion about priorities, and
- Align every decision with the district’s Strategic Roadmap and the district’s commitment to Connecting, Achieving, and Preparing.