Duluth School Board Unanimously Approves Operating Referendum for November Ballot

The Duluth School Board voted unanimously Wednesday to ask voters to consider an operating referendum on the Nov. 3 General Election ballot, a proposal district leaders say is necessary to protect student learning while providing time to address long-term financial challenges.

The referendum comes as Duluth Public Schools faces a growing structural budget deficit driven by rising costs and revenues that have not kept pace with inflation.

"Duluth Public Schools is nearing a financial crisis because of these factors beyond our control," said John Magas, Superintendent. "We have already made difficult decisions, reducing nearly $12 million from our budget over the past three years, and we know additional reductions are still needed. This referendum represents a modest investment that will help protect student learning today while giving us time to stabilize the district's finances for the future."

Over the past three years, the district has reduced approximately $12 million from its budget - about 8% of total expenditures. Those reductions have included administrative cuts, staffing reductions, and other cost-saving measures across the district.

For the 2026-27 school year, the School Board approved a budget projecting a $3.9 million deficit in an effort to minimize immediate impacts on students, despite having only $2.5 million remaining in its fund balance. Budget reductions for the current school year included a 16% reduction in administration and a 5% reduction at schools, including 48 teaching positions.

District officials say additional reductions of at least $5 million will still be required for the 2027-28 school year because of the timing of property tax collections, even if voters approve the referendum.

Without additional revenue, the district projects continuing deficits that could result in statutory operating debt as early as the end of this fiscal year. If that occurs, the Minnesota Department of Education would assume significant oversight of the district's budget and financial operations.

Several long-term factors have contributed to the district's financial challenges, including:

• State funding that has not kept pace with inflation.
• Employee compensation, health insurance, supplies, and contracted service costs are increasing faster than revenues.
• Rising special education costs.
• Local operating levy revenues that remain significantly below the Minnesota average.

District leaders emphasized that these challenges are affecting school districts across Minnesota but have become particularly urgent in Duluth.

In July, the district surveyed Duluth residents to better understand community priorities and attitudes regarding school funding. Results showed strong support for local schools while also reflecting concerns about increased property taxes. The proposed referendum was developed with that community feedback in mind.

If approved by voters, the referendum would include two questions:

Question 1 – Protect Student Learning Today

The first question would provide a step-up operating levy over a 10-year period. Revenue generated during the first year would help address the district's immediate budget deficit. Beginning in the second year, additional revenue would help reduce the need for future budget cuts while maintaining approximately the same tax impact because existing building debt expires.

The estimated tax impact would be approximately $8 per month for the owner of a $300,000 home, or $2.68 per $100,000 of home value.

Question 2 – Prepare for the Future

The second question would provide additional operating revenue to help stabilize the district's finances while leaders continue efforts to right-size operations and address long-term structural challenges.

The estimated tax impact would be approximately $7 per month for the owner of a $300,000 home or $2.34 per $100,000 of home value. Question 2 would only take effect if voters approve Question 1.

Both levies would increase annually at the rate of inflation.

District leaders emphasized that the referendum is not a complete solution to the district's financial challenges. Instead, they say it would provide critical time to continue aligning district operations with enrollment and revenue while minimizing additional impacts on classrooms.

"The work to stabilize our finances will continue regardless of the election outcome," said Kelly Durick Eder, School Board Chair. "This referendum gives our community the opportunity to make a modest investment that helps protect student learning while allowing us to continue the difficult work of creating a sustainable financial future for Duluth Public Schools."

Residents will have the opportunity to vote on the operating referendum on or before the Nov. 3, 2026, General Election.

Coming Soon! Duluth Public Schools will go live with a referendum website with details about the need, the plan, the cost, and frequently asked questions about school district operations. Additional communications will follow now through Election Day on November 3.