A northeastern Minnesota school district whose financial woes were highlighted in Gov. Tim Walz's recent State of the State address is preparing to cut a quarter of its teachers and combine grade levels, after local voters rejected an operating referendum on Tuesday.

Leaders of the Floodwood School District, located about 45 miles west of Duluth, had said the $700,000 referendum was necessary to pay for staff and programs in the district in a time of declining enrollment. Without the additional help, they said they'd have to cut more than 11 jobs and combine elementary grade levels into single classrooms. First- and second-grade students would have to share a single teacher, as would third- and fourth-grade students, and fifth- and sixth-graders.

But voters in the small district — which has about 199 students — narrowly rejected the tax increase. The vote was 352-337.

The tax increase for the owner of a $100,000 home would have been $291 per year for 10 years, according to the district.

Floodwood Superintendent Rae Villebrun said she and other school staff were busy Wednesday figuring out how to keep things running once the district starts making cuts. She said she was heartened that the vote was so close but concerned that uncertainty about the budget could result in parents pulling students from the district — and making the financial situation worse.

"We're going to figure out how to make this work for the kids," she said.

In a statement issued by the state teachers' union, Education Minnesota, Floodwood math teacher Amanda Fjeld said she was "saddened" by the election result.

"The students are our future and without this referendum, it will be that much harder to provide the best for them," Fjeld said, "but we will do what we can with what we have. Unfortunately, we will be saying goodbye to some amazing teachers and staff."

Fjeld was a guest of the DFL governor at his State of the State address earlier this month. Walz said the Floodwood district's financial struggles were representative of a growing problem across the state, where communities without a strong property tax base — or willing local voters — often lag behind in school funding.

On Wednesday, speaking at an event at Stillwater Area High School, the governor said the pending cuts in Floodwood would likely have a major impact on the community beyond the school itself.

"It will probably mean that parents choose to send their students elsewhere … and those are implications," he said.

The vote in Floodwood comes as Walz and DFL state lawmakers are pushing to significantly boost state funding for schools. DFLers, who hold the majority in the state House, want to boost the state's per-pupil funding formula by 3 percent next year and 2 percent in 2021. In the Republican-led Senate, meanwhile, lawmakers are pushing for an increase of less than 1 percent in each of the next two years.

Voters weighed in on school funding referendums in a handful of other Minnesota communities on Tuesday, with varying results.

In Austin, voters rejected a nearly $25 million referendum that would have funded an addition to the Woodson Kindergarten Center that would have been used for early learning programs.

Voters in the La Crescent-Hokah school district approved one referendum question, which proposed nearly $24 million in bonding to renovate the district's elementary school and make security upgrades to the middle and high schools. They rejected a second question, which would have dedicated nearly $6 million for broader facility improvements.

In Pipestone, voters approved $27 million for a new elementary school and a separate $1 million plan for security improvements to the district's middle and high schools.

New Richland-Hartland-Ellendale-Geneva School District voters approved a $9 million plan that will fund security updates, classroom upgrades and maintenance improvements.