NEW ULM – Thursday, Feb. 26, the New Ulm School Board approved its revised budget for fiscal year 2026.

The revised budget shows a $46,253 decrease in revenues for the district and $380,123 increase in expenditures.

District 88 Business Manager Matt Moline had informed the board during a previous study session that the district was seeing declining enrollment numbers, resulting in a loss of state funding.

The outgoing graduating class is starting to outnumber the incoming class. New Ulm Public School’s Class of 2026 has 178 students, but this year’s Kindergarten class has 130.

For fiscal year 2026, the district will receive $29,000 less in state revenue than the original projection.

However, it was the increase in expenditures that saw the greatest swings.

Moline said project salary and wages decreased significantly, but insurance went in the opposite direction. Salary and wages went down by $350,000, but employee benefits increased by $400,000.

Purchase services expenses also increased by $352,000. Moline said this increase was related to Special Education, which saw a greater need than anticipated.

Under the new revised budget, the district will see $34.4 million in total revenues and $35.3 million in expenditures, a $900,000 project loss for the year.

Earlier in the meeting, the board received a report from the board’s finance committee. The committee is recommending a budget reduction of $1.2 million for the next year to address these funding challenges.

After approving the revised budget for 2026, the board passed a motion directing administration to make recommendation for reduction in programs and position.

Superintendent Sean Koster said the board passes this resolution every year to allow administration to begin making recommendations. All final recommendations would come back before the board.

Board member Jonathan Schiro made the motion to approve the resolution, saying, “This is always a difficult decision, but it is one we will have to make.

The resolution was passed by the board.

Koster recommended holding a work session with the board in March to focus on budget issues.