Two Iron Range school districts are facing millions of dollars in budget shortfalls that could eliminate more than a dozen teachers, with up to 18 positions being considered in Hibbing and 17 more in Rock Ridge.
The votes, set for Wednesday in Hibbing and Monday in Rock Ridge, represent the latest challenge for rural school districts that go beyond the COVID-19 impacts. Lowered regional populations have gashed enrollment revenue, inflation has outpaced the state’s general education funding formula and property taxes have also contributed to the budget crises.
“We’re struggling with aid,” said Hibbing Superintendent Richard Aldrich, during a March 5 board meeting. “We’re struggling with revenue and it does not look like the legislature is going to be handing out additional dollars this session.”
Had Minnesota adjusted for inflation in its per pupil funding formula, said Rock Ridge Superintendent Noel Schmidt, the budget problem at his school would not exist. Citing a report from Ehlers, a public finance advisory consulting firm, the current Rock Ridge board is working more than $3 million fewer state dollars than the Virginia and Eveleth-Gilbert districts in 2003. That’s an 18.7% difference, per the report, or $1,364 per student from what schools currently receive.
Analyzing Census data, the Center for Policy Development has reported St. Louis County lost about 26% of its population who would be aged 25-29 between 2000 and 2010, and 27% aged 30-34, which are generally the ages when families are built. That trend has revealed itself further in enrollment data, showing declines nearly across the board in the region from the 2014-15 school year through last year, combined with the lagging state funding formula.
In 2014-15, Hibbing averaged 2,403 enrolled students during the year and is down to 2,135, according to Minnesota Department of Education figures. Rock Ridge declined from 2,719 in 2014, when it was separated as Virginia and Eveleth-Gilbert. It sat at 2,344 last year. All districts endured ebbs and flows, and post-pandemic hits, but only Mountain Iron-Buhl has come out ahead over the 10-year data period (491 to 583).
The numbers look more grim for Rock Ridge when using state data to project populations under 5 years old. The district had 1,086 kids under 5 within its boundaries in 2015-16, but is projected to finish the 2024-25 year with only 685. Hibbing (1,150 to 930), Mountain Iron-Buhl (338 to 210), St. Louis County Schools (775 to 752) and Mesabi East (360-300) all have projected downfalls of younger children, but at a less steep pace.
“It’s nosediving,” Schmidt told the board at a March 18 working session. “There simply aren’t as many kids living in the district as there were. Prior to consolidation, that number was going down.”
Some of the enrollment declines are attributable to open enrollment, private schools and homeschooling, PSEO classes and students opting into online courses, the latter of which superintendents have seen a growth rate in recent years. When those students don’t enroll, the school doesn’t collect state funding and in cases like homeschooling, the money basically stays in the state’s coffers.
Rock Ridge last week approved changes to its PSEO classes, a move designed to encourage seniors to take College in Schools and Advance Placement courses in the district. It’s projected to provide an added $100,000 in revenue, and guidance counselors attending the March 18 meeting said saw an overall shift back toward Rock Ridge during registration.
In Hibbing, the district is planning to have an operating referendum on the November ballot to increase its tax share. No details were provided on what the referendum request would look like.
“It’s our top priority to pursue all angles,” said John Berklich, chair of the Hibbing School Board.
Statewide counties and schools have leveraged property taxes at a disproportionate rate than school districts, largely driven by the mechanics of the process. Schools have to go to voters and ask for the increase, while local governments can unilaterally increase rates.
Operating referendums have not fared as well in Minnesota in recent years. Only 40% were approved in 2024, the lowest rate since 1980, according to the Minnesota School Boards Association.
Going back to voters isn’t an option for Rock Ridge as the current state law stands. When the district formed in 2020, it was the first school consolidation in Minnesota in two decades and combined districts weren’t accounted for when it was written.
Schmidt said proposed changes to the law have been discussed with local legislators.
“This will affect everyone else who wants to consolidate after us,” he added. “It’s ridiculous that consolidated schools get punished.”
