NEW ULM – The New Ulm School Board took a hard look at its options for budget reductions over the next year years during a special work session.

For the third year in a row, New Ulm Public School is looking at a budget deficient forcing the school board to make cuts. In the 2026-2027 school year, the school district is looking at a $900,000 deficit. This deficit is expected to grow to $2 million by 2027-2028.

Superintendent Sean Koster explained that the reason for the deficit is related to enrollment. The number of students coming into the district has dropped by 47 from last year. This and a loss of $470,000 in revenue for the district. The projections show enrollment continuing to shrink, with the incoming kindergarten classes having lower enrollment than the outgoing senior classes.

Koster presented the board with two separate options for the 2026-2027 school year. Option A: reduce the budget by $1.09 million. Option B: reduce the budget by $1.65 million. Under option A, eight staff positions would be eliminated. Under option B, 16 staff positions would be cut. The reductions would also result in the modification of employee contracts.

For both options, the school would need to make adjustments to class sizes based on enrollment numbers in each grade. Koster said this was called “right-sizing” a class.

The school will be looking at right-sizing options for the different grade levels. Kindergarten, first grade and third grade would be the most impacted by the changes, with class sizes increasing by two students.

The school will likely see cuts to the curriculum and activities. Koster said there was potential for the district to cooperate with other schools for certain activities. As an example, if the school cut cross country club, New Ulm Public School could cooperate with Sleepy Eye, which offers cross country. The school could also enter a coop with Cathedral High School for dance teams or girls’ golf.

Increased fees on admissions and season passes were another option that could generate revenue. Koster said this would be a small revenue source, but it could mean the difference in keeping a paraprofessional on staff.

The school district is also considering delaying upgrades to technology, but Koster warned that they do not want to get too far behind on tech replacement.

The district also has the option of tapping into the German Land Trust account. This account generates interest that could be used to cover some school expense that includes technology. The trust currently has $173,000. It was last used in the 2011-2012 school year.

School Board member Jonathan Schiro asked about the likelihood of the board needing to make further cuts next year if the board chooses the option with the lower reduction.

“When you cut smaller amounts, you end up cutting multiple years,” Koster said. He believed that under either scenario, there would need to be further cuts, but the more cuts made upfront, the better position the school would be in the long term.

Schiro said he was leaning toward taking a bigger cut now, even though it would hurt more upfront.

“These are tough times. These are extremely tough discussions,” he said. “We don’t want to do this, but it is the situation we are in.”

Board member Matt Ringhofer said going back for multiple cuts each year was something the finance committee wanted to avoid, as it gets harder to cut each year.

Schiro was concerned that cuts over multiple years would be hard on staff. Those who do not get cut this year might worry about being cut next year. He said it was not great for morale.

The board did not official decision on cuts during the work session, but the board agreed to hold a special board meeting next week to reach a final decision.

Koster said he wanted an early decision out of respect for the staff to allow them time to plan for next year.

The next regular school board meeting is 5 p.m. Thursday, March 26, in the District Boardroom, 414 S. Payne Street.