Northfield finance director warns of multimillion-dollar gap; recommends $6 million budget reduction target

Val Almergister, Northfield Public School District director of finance, told the school board on Jan. 27 that the district faces an operating shortfall under current assumptions and recommended a $6,000,000 budget-reduction target for fiscal 2025–26.

Almergister said the district closed fiscal 2023–24 with a 13.83% unassigned fund balance and that the revised 2024–25 budget includes a planned $592,000 deficit. Under conservative revenue assumptions (a 2.4% increase in basic per-pupil state aid and limited federal and interest revenue) and with projected cost increases for salaries, benefits and other expenses, the forecasted 2025–26 shortfall is about $4.5 million. The district recommends budgeting to reduce that gap and to protect fund balance; staff proposed a $6 million reduction target to reach a responsible reserve level.

Almergister walked the board through enrollment drivers (declining weighted pupil units, an estimated loss of roughly 53.2 weighted pupil units from 2024–25 to 2025–26, about 46 students), statutory and benefit changes (Teacher Retirement Association employer rates rising from 8.75% to 9.5% in fiscal 2026, and a new paid family and medical leave payroll tax expected to begin Jan. 1, 2026) and other pressure points such as shrinking interest revenue and the end of one-time federal ESSER funds.

The forecast assumes modest per-pupil formula increases but noted that the state’s per-pupil funding would still lag inflation; Almergister illustrated that if state funding had tracked inflation since 2003 the district would have about $1,364 more per pupil and roughly $5.7 million more in revenue.

Staff recommended the following near-term calendar: budget-priority teams meeting Feb. 11–25 (community meeting March 11), debt-service and internal-service review March 10, proposed reductions presented April 14, and final budgets approved by the board May 27. The budget-team application was open and staff said they had 11 applicants as of the afternoon of Jan. 27; staff also asked for board help recruiting community participants and said the application deadline was Feb. 3.

Board members asked for scenarios showing multi-year impacts and how one-time versus ongoing reductions would affect 2026–27. Almergister said the 2026–27 projection depends on which cost categories are reduced and offered to run models for different approaches. Board members and staff emphasized that bond proceeds approved by voters for construction cannot be used to cover operating shortfalls.

Almergister characterized the $6 million figure as roughly an 8% reduction of the general fund operating budget and framed it as a precautionary target to maintain fiscal stewardship and meet the district’s 14% unassigned fund balance goal. No final budget decisions were made at the Jan. 27 meeting — staff presented the forecast and recommended next steps for board consideration.