Goodhue School District Financial Update: What You Need to Know
The Goodhue School District has been closely examining its budget over the past several months. With rising costs and growing needs, there’s been a growing gap between revenues and expenditures. To tackle this, the school board has approved several cost-saving measures and is now asking voters to consider an operating levy to support the district’s financial future.
Where We Stand Now
One key measure of a school district's financial health is its unassigned fund balance—essentially, our savings account. Here's what it’s looked like over the past few years:
2020-2021: $1.4 million (18.3% of expenses)
2023-2024: $825,000 (8.1%)
Projected for 2025-26: $283,000 (3.1%)
Our district policy is to keep the fund balance at 20%, but we’ve been falling short.
Why does this matter? A low fund balance puts us at risk of cash flow problems, especially since state payments don’t always come in on time. Without enough in reserve, we could end up needing loans just to cover payroll or basic operations.
Why the Fund Balance Dropped
One of the biggest drivers of the decline has been a sharp increase in special education costs.
2019–2020: 54 K-12 students in special education
2024–2025: 101 K-12 students in special education
The state reimburses us for much of these expenses—but not right away. We pay the costs up front and get reimbursed a year later, which puts immediate pressure on our budget.
For example, in the 2021–22 school year, special education expenses jumped by over $400,000, which directly reduced our fund balance by that amount. Other school districts in Minnesota have also experienced significant increases in their special education enrollment and expenditures.
How We’re Adjusting the Budget
This winter and spring, the district faced a $400,000+ budget deficit. To address this, the school board approved:
$450,000 in budget adjustments, including staff reductions and trimming supplies/subscriptions
Targeted increases in revenue
The focus was to protect students and classrooms as much as possible. Drastic cuts would have meant larger class sizes and the elimination of programs.
Even with these efforts, the 2025-26 budget still shows a $177,000 deficit, partly due to a smaller-than-expected Kindergarten class.
Other Budget Pressures
We're also facing challenges from:
Inflation: Prices have jumped across the board. For example, custodial supplies alone went up $40,000 in just one year.
Unfunded mandates: The state has introduced new requirements, like the Paid Family Medical Leave program, without covering the costs.
Open Enrollment: A Closer Look
Currently, 211 of our 779 students are open-enrolled from outside the district—many with family ties to Goodhue.
An analysis showed that if those students weren't here, we would:
Save about $1.1 million by reducing staff
But lose $2.3 million in revenue
Bottom line: Open enrollment brings $1.2 million in net revenue, making it an important part of our financial picture.
How We Compare to Our Neighbors
Here’s a snapshot of what districts spent per student in 2024:
School District
Expenditures (per student)
Goodhue $13,467
Lake City $14,033
Cannon Falls $14,141
Kenyon-Wanamingo $15,686
Red Wing $15,940
Zumbrota-Mazeppa $15,993
State Average $16,550
And here’s what each district received in revenue per student in 2024:
School District Revenue (per student)
Goodhue $13,286
Cannon Falls $14,315
Lake City $14,744
Kenyon-Wanamingo
$15,728
Zumbrota-Mazeppa $15,285
Red Wing $16,359
State Average $17,187
Goodhue has the lowest revenue and spending per student among neighboring districts. The big difference? All of our neighbors have voter-approved operating levies—we currently do not have one.
School District Operating Levy per Student
Goodhue $0
Cannon Falls *$948
Lake City $1,001
Kenyon-Wanamingo $1,029
Zumbrota-Mazeppa $1,279
Red Wing $1,650
In fact, over 73% of districts in Minnesota have an operating levy, with the average being $1,062 per student.
*Note: Cannon Falls has a $500/student operating levy and $448/student capital projects levy.
A Proposed Solution: Operating Levy Vote
After months of careful consideration, the school board is moving forward with a special election this fall. Voters will be asked to consider an $800 per pupil operating levy, which would bring in about $625,000 per year.
Here’s the estimated tax impact:
$170.71 per year ($14.23/month) for every $100,000 of assessed property value
Ag land is excluded, except for the house, garage, and one acre
This proposed levy will help stabilize our budget, maintain current programs, and allow us to continue fulfilling our mission: “Growing good people to become productive members of society.”
Next Steps & How to Learn More
More information will be shared later this summer. Public information sessions will also be held this fall so you can ask questions and further understand the state of the Goodhue Public Schools budget.