Staff photo by Fritz Busch New Ulm Public School Superintendent Sean Koster discusses school district budget factors at a school board study session in the district boardroom Thursday.

NEW ULM — The District 88 School Board got a peak at future district budgets at a study session Thursday.

Declining enrollment and the loss of school funding it means got the attention of a number of school board members.

“The budget is a work in progress. I wanted to get this out there as we start talking about fiscal year 2027,” said District 88 Business Manager Matt Moline.

He said the district’s fall 2025 ADM (average daily membership) was 2,046, about 60 students less than the previous year.

“Our graduating classes are larger than our incoming fall kindergarten classes of about 130 students the last two years,” Moline said. “I understand school enrollment is down across the state. Our Class of 2026 is estimated at 178 but our incoming class is about 130 for a projected ADM reduction of 43.68.

He said the ADM reduction means the district would receive a student funding cut of about $400,000.

Moline said since the 2023 high district enrollment of 2,208, the school district is estimated to receive a $2 million student funding reduction over the four years after 2023. He said district enrollment was 2,188 in 2024. It fell to 2,180 in 2025 and was estimated at 2,145 in 2026 and 2,102 in 2027.

“It’s hard to say how 2028 and 2029 will shape up, but right now, it’s hard to see a reverse in that (declining enrollment) trend with the classes we have coming up,” said Moline. “That’s our reality. Now we need to find out what we need to do to live in that reality.”

Board member Amanda Groebner said declining enrollment is not just a New Ulm trend.

“People are having fewer kids. Some people are waiting longer to have kids,” she said.

“Having kids is expensive,” said Moline.

He said the school district will strive to maintain a minimum unassigned general fund balance of 45 days of operating expenses.

Moline said health insurance cost increases, contract settlement increases, teacher retirement and teacher shortages are other factors bearing on the school district’s future.

“We still have small class sizes. Staffing is our biggest expense,” said Superintendent Sean Koster. “Right now, we’re not lean with our staffing. The State has given us more costs in recent years.”

He said the school board made budget cuts last year and in recent years.

“We have to look at how we want to move forward. We could make a one-year cut or do it over several years,” he said.