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Red Wing schools face roughly $1.7 million gap; leaders propose using fund balance to soften impact
Summary
Administrators told the Red Wing Public School District board the preliminary budget shows roughly $39.17 million in anticipated revenue versus $40.87 million in expenditures (about a $1.7 million gap). Staff recommended using up to $1 million from fund balance (including a projected $500,000 surplus) to reduce the shortfall to approximately $700,000 while seeking further cuts and enrollment strategies.
District administrators presented a budget update showing anticipated revenues of $39,172,000 and anticipated expenditures of $40,872,000, yielding an approximate $1.7 million shortfall. Staff said the district expects a roughly $500,000 surplus in the current fiscal year and recommended using $500,000 of that surplus plus an additional $500,000 of existing unassigned fund balance to reduce the projected deficit to about $700,000.
The administrator presenting the update said the move would leave the unassigned fund balance near 14–15% under these assumptions and that using fund balance is a temporary, one-year strategy while the district works to identify further savings or revenue sources. "So in doing so, that would bring our number down to $1,200,000," the presenter said in explaining intermediate calculations; the staff proposed further actions to identify $1,000,000 in reductions to approach the full $1.7 million figure.
Board members pressed for alternatives. Several members cautioned against spending the fund balance first. One member said, "I'd rather look to see what we can do for cuts ... and if we need to look at the fund balance," arguing fund balance should be preserved as a contingency. Other board members said prior cuts have already reduced discretionary options and warned that cutting more classroom teachers could harm students.
Discussion also noted structural cost drivers: declining enrollment (from about 3,300 in the mid-1990s to roughly 2,200 now), increases in statutory retirement contribution rates for teachers (TRA employer contribution rising to 9.5% July 1, 2025), and new family medical leave payroll costs (a 0.88% rate, half borne by employers). Administrators said they would meet with principals and directors immediately to identify targeted reductions that minimize direct student impact, and that the preliminary budget must be approved by July 1.
No final budget vote was taken; board members asked staff to develop options (including a list of potential cuts and potential revenue or enrollment strategies) and to report back at upcoming workshops and meetings.
