By Logan Wells, News Director | Logan@kymnradio.net
At the last regular meeting of 2024, the Northfield School Board heard their Truth in Taxation presentation and adopted a revised budget.
School districts in Minnesota are unique compared to most other local governments, such as cities and counties. School districts do not approve their budgets at the end of the calendar year; instead, the state requires schools to approve their budget by the end of June. The Northfield School District has traditionally revised the budget every December as enrollment and financial information become more solidified.
Also, unlike city and county governments, school districts receive their funds in differently. The majority of the funding for the Northfield Public Schools comes from the State of Minnesota and is based on the school’s total enrollment. 26.4% of the district’s revenue comes from the property tax levy set by voters in referendums. Here’s the district Director of Finance, Val Mertesdorf
“All of our levies are state authorized levies or voter-approved. It is extremely regulated and so we can’t decide that we’re going to be in a tough budget situation and increase the levy Just to help us. It all has to be either voter approved or through a formula through the Department of Education.” – Northfield Public Schools Director of Finance Val Mertesdorf at the 12/9/2024 School Board Meeting
A series of tables comparing 2024’s tax levy to 2025’s tax levy. The top row of information shows how much the tax levy contributes to the three district funds and shows that the change this year is primarily driven by the high school referendum (debt service fund). The middle row of data shows how much of the levy has been approved by voters and how much has been approved by the State Department of Education formula. The last row of data shows the net tax capacity breakdown of the district. From the School Board Meeting Packet 12/9/2024
Since voters approved all three questions of the High School Renovation referendum, state law requires the district to levy a tax of 105% of the debt payments due, and the increase taxes is fueled entirely by the high school referendum.
PREVIOUS STORY (12/4/2024): Northfield Public School Working To Save Costs During the Bond Sale; Carleton Donation Is Expect To Lead To $4 Million in Savings
Mertesdorf noted that in the last 5 years, the school districts taxes have remained largely flat:
“And so the preliminary levy. Tax impact calculation was actually a reduction of your school district taxes across the board across all categories if I’m recalling correctly. Because there was additional market base, but our levy didn’t go up in in a percentage that exceeded that. And so most people saw a reduction in their school district taxes Now obviously our final levy looks a little different.” [Because of the passage of the High School Renovation Referendum]. – Northfield Public Schools Director of Finance Val Mertsdorf at the 12/9/2024 School Board Meeting
The tax levy trends in the last five years of the school district show that district taxes have mainly been influenced by changes in the tax base and not the tax rate change. The largest change happening in this last year with an increase from the high school referendum. From the School Board Meeting Packet 12/9/2024
Since the majority of the school funding is based on enrollment, the declining number of students continues to impact the overall budget. Furthermore, increases in the cost of special education transportation, health insurance, and retirement benefits have led to a projected deficit of $590,000. The district’s fund balance remains healthy, with $14 million in reserves to cover the cost. The district’s goal is to maintain a fund balance of 14%. With the deficit, the fund balance will fall to 12.17%. The district’s auditors noted that this is still a better place than many other school districts in the state. Mertesdorf indicated that future budgets will like include some cuts, despite the situation, she stated the district is in good financial health overall:
“Really, I just want to say that the culture of stewardship, obviously, that’s one of the strategic commitments that was on my second slide, but it has really given the district a sense of financial stability that is not commonplace in school districts in Minnesota, in my opinion. And we continue to operate from a position of strength, having a projected 12% fund balance is probably several districts dream to have projecting 12%.” – Northfield Public Schools Director of Finance Val Mertsdorf at the 12/9/2024 School Board Meeting
A summary of the Northfield Public Schools budget. From the School Board Meeting Packet 12/9/2024
A chart breaking down the district’s fund balance and projected deficit. From the School Board Meeting Packet 12/9/2024
Mertesdorf noted that declining enrollment will continue to be an issue for the district going forward.
On one positive note, the district received its sixth consecutive year of a clean audit, and the auditors noted that only 8 out of 40 school districts in their firm had clean audits.
Will cover in a future news story the audit more in-depth.
