Duluth Public Schools Cuts $4.2 Million to Close Budget Gap

Duluth Public Schools locked in $4.28 million in spending reductions for 2026-2027, with staff displacement notices set to go out after spring break in April and the district banking on at least 17 upcoming employee retirements to limit outright layoffs.

Superintendent John Magas announced the finalized plan on March 24, framing the slight overshoot of the $4 million target as a deliberate buffer. "That's more than we targeted; we targeted $4 million," Magas said. "But we also know that as we head into the year, there are going to be other things that are needed ... so we wanted to make sure that we went slightly above target, so that we had just a little bit of flexibility as those needs came in."

The cuts fall hardest at the district level, where administration absorbs roughly $1.249 million, a 15.61% reduction. Middle and high schools face an estimated $1.782 million cut, or 5.8%. Elementary schools are reduced by approximately $1.258 million, about 4.1%. The tiered structure reflects the district's stated goal of pushing reductions away from classrooms and toward administrative and non-instructional spending where possible.

ISD 709 is working with the Duluth Federation of Teachers on the displacement process. With 85% of the general fund committed to staff salaries and benefits, some employee impacts are unavoidable, but the district is counting on attrition to reduce the need for formal layoffs. Displacement notices will not go out until after the April spring break.

The drivers are familiar: a 15% spike in health insurance premiums, escalating costs for specialized student services, and inflation that Minnesota's per-pupil funding formula has not kept pace with. The school district accounts for roughly 26% of property tax bills for Duluth-area homeowners, and the board accepted a 6.9% levy increase for 2026 collections even as the general fund gap widened. Hibbing and St. Louis County Schools are navigating similar shortfalls heading into the same budget cycle.

The 2026-2027 reductions are the third consecutive year of cuts for ISD 709, following a $2.6 million reduction in 2024-2025 and a $5 million cut last year that eliminated 45 positions, including 23 teaching jobs, half of the district's media specialists, and 17 paraprofessionals. The three-year total now exceeds $11.8 million.

"These are incredibly difficult decisions, as we know they impact the people who make our schools great," Magas said. The school board will receive regular updates as reductions are implemented ahead of the fall semester.