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Duluth Public Schools has every right to celebrate good academic news. It also has an obligation to explain bad financial news with the same enthusiasm, detail and persistence. That balance is becoming increasingly important as Duluth voters prepare to consider two operating-levy questions Nov. 3.
Superintendent John Magas and district officials have repeatedly emphasized that Duluth Public Schools has cut approximately $12 million from its budget during the past three years — $2.6 million in 2024-25, $5 million in 2025-26 and $4.2 million in 2026-27. The district says rising special-education, transportation, health-insurance and other costs, combined with state funding that has not kept pace with inflation, have created a structural deficit that cuts alone cannot solve.
Those are legitimate points. They are not the entire financial story, and that is becoming increasingly difficult to ignore as the referendum campaign moves forward.
The district’s fiscal 2025 audit shows that its General Fund ended the year with spending far above the final revised budget. The district budgeted $137.94 million in General Fund expenditures. Actual expenditures were $153.21 million, a $15.27 million unfavorable variance from the final budget.
That number deserves far more public attention than it has received. The final General Fund budget projected that the fund balance would decline by about $2.78 million. Instead, it fell by $11.53 million, leaving the year’s result approximately $8.75 million worse than the final budget had anticipated.
The district has offered an explanation. In its discussion accompanying the audit, administrators said expenditures and other financing uses finished approximately $15 million above budget because of special-education and transportation costs, including increased fuel and employee costs associated with a new 10-year transportation contract.
But that broad explanation raises more questions than it answers. When a school district is asking taxpayers to approve tens of millions of dollars in additional operating revenue over the next decade, the public deserves considerably more detail about a $15 million expenditure variance in the most recently audited fiscal year.
The audit’s own budget-to-actual numbers show significant overruns spread across numerous General Fund categories. Regular instruction exceeded the final budget by approximately $4.55 million. Pupil support services were approximately $3.69 million over budget. District and school administration was nearly $1.9 million over budget, district support services were approximately $1.55 million over, and exceptional instruction was approximately $1.51 million over.
Those are not insignificant differences. There may be perfectly reasonable explanations for each of them, but voters should not have to reverse-engineer those explanations from a lengthy financial audit while being repeatedly told how much the district has cut during the past three years.
That is especially true when the district is simultaneously conducting a referendum campaign centered on financial urgency. District officials say another $5 million in reductions will be required in 2027-28 even if voters approve both referendum questions. If both questions fail, the district projects $12 million in reductions over two years, approximately equivalent to 120 positions.
Those numbers are serious and deserve to be presented to voters. But the district’s recent spending history deserves equal attention, because voters are not merely being asked whether Duluth schools need money. They are being asked whether they trust the district to manage additional money responsibly.
At Tuesday night’s public referendum forum, Magas again discussed the district’s reductions during the past three years. What was not addressed in comparable detail was how fiscal 2025 General Fund expenditures ended more than $15 million above the district’s final revised budget.
That omission is becoming increasingly difficult to overlook. The district talks frequently and specifically about what it has cut, what state government has failed to fund and what programs or positions could disappear if voters reject the referendum. It has been much less aggressive in explaining why actual expenditures recently ran so far above budget.
Meanwhile, the district distributed a news release Wednesday emphasizing encouraging 2026 academic results. Duluth students exceeded statewide proficiency averages in reading and science and matched the statewide mathematics average. The district reported 54.7% reading proficiency, 33.6% science proficiency and 44.9% mathematics proficiency.
Those results matter. Students, teachers and school staff deserve recognition when academic performance improves, and there is nothing improper about a school district telling its community about good results. The new Reading MCA-IV assessment also establishes a new baseline, meaning the 2026 reading results cannot simply be compared with previous years.
But academic achievement does not answer a financial question. A district can have improving test scores and still have a budgeting problem. It can employ outstanding teachers and still underestimate expenditures. It can face genuine state funding pressures and still owe taxpayers an explanation when actual spending finishes more than $15 million above the final budget.
All of those things can be true at the same time. The danger comes when the public discussion becomes heavily weighted toward the accomplishments and outside financial pressures while the uncomfortable internal numbers receive considerably less attention.
Magas also recently announced that he will not accept two scheduled $5,000 salary increases over the next two years. His current contract raised his salary from $214,000 to $240,000 effective July 1, and his decision means his salary will remain at that level rather than increasing further during the next two years.
That gesture is worth noting, particularly during a period in which employees and programs face additional reductions. It is not, however, a substitute for explaining how the district substantially exceeded its most recent audited budget.
Nothing in the audit establishes financial misconduct. The independent auditor concluded that the district’s financial statements fairly presented its finances in all material respects. The issue is not whether auditors uncovered wrongdoing. The issue is whether the administration and School Board have sufficiently explained a major budget variance to the taxpayers they are now asking for additional money.
If General Fund expenditures exceeded the final budget by approximately $15.27 million, voters deserve to know exactly where the difference occurred, why it occurred, who knew the district was exceeding its budget, when they knew it and what corrective action followed.
The administration should publish a plain-English reconciliation before Election Day. Show taxpayers the original budget, the revised budget and the final actual expenditures in every major category, then explain every significant variance in language ordinary residents can understand.
Explain precisely how much of the overrun was transportation and how much was special education. Explain why regular instruction exceeded budget by millions of dollars, why pupil support services ran above budget, why administration exceeded its final budget and why district support services were higher than projected.
Most importantly, explain how the district can simultaneously emphasize millions of dollars in budget reductions while finishing a fiscal year with actual expenditures substantially above its final revised budget. Those two facts may be reconcilable, but the administration should do the reconciling publicly rather than expecting voters to simply accept both.
This is not an argument telling anyone how to vote Nov. 3. Voters can support the referendum, oppose it or remain undecided while still expecting a complete accounting of the district’s finances.
Duluth Public Schools wants residents to understand that its financial problems are serious, and the numbers clearly show that they are. The strongest way to build public confidence now is not simply to repeat how much has been cut, emphasize positive academic results or warn about what could be lost if additional revenue is rejected.
It is to explain, completely and plainly, how the district got here.
