The budget woes facing the Ely School District have only worsened in recent weeks, but a significant gift from the Ely Educational Foundation will help fill some of a widening gap.
As much as $600,000 may be needed to balance the district’s budget in 2026-27, according to the latest estimates reviewed Monday night by Ely School Board members.
“The new number is $600,000,” said superintendent Anne Oelke. “We were saying preliminarily around $500,000 but it’s really $600,000.”
But that same night, Oelke announced that the Ely Educational Foundation will contribute $213,480 to help bridge the divide.
“They are ready and willing to help us through some challenging times, and I am so appreciative,” said Oelke.
The donation, along with projected savings of about $195,000 by a potential move to a four-day school week (see related story), will close much of the budget deficit and ward off other major cuts in teaching staff and personnel.
“I asked them can you give us money so I don’t have to cut too deep into electives, programming, staffing, whatever I can do,” said Oelke. “And they can and said yes to a number so they are giving a donation of almost $215,000.”
Other moves currently on the table include a reduction of one full-time teacher in the elementary school, saving just over $75,000, as well as a reduction in paraprofessional staff ($24,000), partial cut in the media specialist ($13,398) and a $12,000 reduction in lobbyist expenditures.
But if it were not for the EEF contribution and the anticipated move to a four-day week, the district would be eying cuts in Spanish, art, mathematics, physical education, music, special education, elementary teaching staff and administration.
Oelke also noted that the budget moves presented this week include the four-day week.
“I will say right now that if we only keep the things on the list that have nothing to do with a four-day week, we’re not coming out very strong,” said Oelke. “We’re still about $261,000 short.”
The four-day week would bring the district closer to a balanced budget, and board members are expected to make a decision on that as well as the other proposed reductions by their April 13 meeting.
The presentation included a review of budget information presented at several previous meetings, including disturbing trends both in budget deficits and steep declines in student enrollment.
“We are trending down,” said Oelke, noting a decline in enrollment that has taken K-12 student population from nearly 600 students in the late-2010s to 461 this year, That is expected to continue, with a high school graduating class of 38 this year, some high school classes in excess of 50 students and an incoming kindergarten class of 22.
The district also will likely bleed further revenue to Vermilion Community College, given projections that as many as 51 students will utilize the post secondary enrollment option program, which allows high school juniors and seniors to take courses at Vermilion and simultaneously receive high school and college credit. This year, there are 38 PSEO students.
As a result of budget challenges, created by rising costs and drops in student enrollment, the district has been in the red the last five budget years, with losses in fund balance each year as follows:
• 2021 - $412,221;
• 2022 - $464,774;
• 2023 - $97,709;
• 2024 - $472,979;
• 2025 - $254,691. The district has already made major budget reductions in each of the last two years, but the impact in 202526 wasn’t as much as expected due to some higher insurance costs and the addition of staff to accommodate student enrollment at a particular grade level.
Oelke said in retrospect the district should have made further cuts earlier and that contributed to the difficult budget picture facing school officials this spring.
“You’re going to hear more information that doesn’t feel good,” Oelke told the board prior to sharing the latest numbers, which factored in a wider than earlier anticipated budget deficit of about $194,000 for the current school year.
The gap projected for 2026-27 brought the district closer to a $600,000 goal for budget changes next year and helped prompt the contribution from the EEF.
Unfunded mandates including a new paid leave program and unemployment compensation for employees who don’t work during the summer have contributed to the budget strife, and Oelke noted that state aid has not kept pace with inflation.
Early indications are that little help is coming from the state, which is the prime source for school revenue.
“They’re not talking about education very favorably as far as funding,” said Oelke.
As boa rd members weighed the grim news, Oelke noted that the district has limited ability and can only “control the things we can control.”
She voiced some optimism about efforts in St. Paul to change how seasonal recreational properties impact school operating levies, and the district is supporting efforts by area legislators to make changes that would expand the reach of school levies and perhaps bring new revenue to the district.
Currently the district collects about $328 per student in operating levies, with the state average about $1,100.
Legislative changes related to seasonal recreational properties would significantly lower school taxes for residential and commercial property taxes, and seemingly make it easier to gain support for an increase that would pump more revenue into the district.
Oelke also said the school may renegotiate with Minnesota North in an effort to lessen the financial losses connected with student defections to PSEO.
“We’re close on that,” said Oelke. “We have had very favorable talks with them.”
