Posted: 12/18/02

School board sets tax levy for 2003

Cliff Buchan
News Editor

Officials of ISD 831 moved forward Monday night with a property tax levy that will generate $12.76 million to support school functions in the 2003-2004 school year which begins July 1.

But thanks to an error in calculations from the state Department of Children, Families and Learning, the tax burden facing property owners in ISD 831 will be softer than first anticipated.

During its regular meeting on Monday, the board adopted an administrative recommendation to certify the maximum tax levy.

How the district reached Mondayís tax decision was explained in detail to a gathering of eight citizens at Forest Lake High School on Dec. 3 who attended the mandated Truth and Taxation hearing to listen to a school report on its budget and taxing plan for the 2003-2004 school year.

Plan changes

While the district had been preparing to move forward with a $13.61 million tax levy, the maximum amount it can levy, the district learned last week that amount contained an error by the CFL amounting to an overage of $850,000 in the amount of tax dollars the district would levy.

With the adjustment in place, Larry Martini, director of business affairs, told the public on Dec. 3 the property tax levy will consequently be dropped to $12.76 million.

That will translate to lower taxes for the school portion of the property tax bill, Martini said.

For an average home in the district with valuation of $190,000, the property tax for the school portion of the tax bill will likely drop by about $50, Martini said.

The tax levy proposed and slated for ratification by the school board next Monday night is a key component in the revenue stream for the budget year that begins on July 1, 2003 and continues through June 30, 2004.

For that period, the district is projecting expenditures that will total $68.1 million and revenues that will cap at $69.1 million.

The overage is being designed by the district as part of its debt reduction plan. For the past year the district has been in statutory operating debt and has a plan in place with the CFL showing how it will emerge from statutory operating debt.

The district ended the 2001 fiscal year with an unreserved negative fund balance of $2.33 million. That amount was reduced to $2.15 million as of June 30, 2002 and is expected to fall to a negative unreserved fund balance of $1.12 million on June 30, 2003.

The current budget shows 66 percent of funding going to instruction, 14 percent to sites and buildings, 8 percent to transportation, 8 percent to district support and other; and 4 percent to district and school administration.

In all 88 percent of the general fund budget is consumed by wages and benefits. ìWe are what you see ó weíre 80 percent people,î Martini said.

Public comments

Dick Tschida, Forest Lake, a former school board member and frequent commentator on school functions, hit the board with several comments and questions during the hearing.

ìI donít want to disappoint you tonight,î Tschida said, opening his remarks.

In his critique, Tschida said it was the role of the school board to evaluate results of school expenditures. ìWhat are you getting for the dollar and how efficient is the system working?î he asked.

In light of the state budget deficit that is expected and its possible negative impact on district funding, Tschida said the board was wise, for once, in moving to levy the maximum amount to capture as many dollars as possible.

In some past years, Tschida said he could not agree with that policy on the schoolís part. But this year, he said the move was justifiable.

ìI didnít say that last year or the year before or in 1992 when you had $9 million in the bank,î Tschida said.

With the state facing a financial crisis, he urged the board to ìbe real careful with our money.î

Roger Gutierrez, a two-year resident of Columbus Township, found fault with the steady increase in assessed valuation on property. He labeled his 25 percent hike in the overall property tax bill ìobscene.î

Gutierrez, who moved to Minnesota from California, said he could see a repeat here of tax revolts if bills continue to rise. Schools in particular were hit hard by passage of Proposition 13 in California which limited the ability of school to raise tax dollars and dried up revenue streams.

If assessors are not reined in, Gutierrez said he could envision a time when ìreasonable people will become unreasonable.î The public is becoming fed up with double-digit tax increases, he said.

ìIím all for having a good school district,î Gutierrez said. ìThe point needs to be made.î

Other points

Officials at the tax hearing urged residents to carefully review the total tax bill and see what any change in valuation might cause. Homes with higher valuation will pay more taxes, Martini said.

Residents questioning the valuation should plan to attend board of equalization hearings each April and May when the value set by the local assessor can be contested.

Residents were also informed of a change in what was previously called the education credit. It is now called the market value homestead credit.

It is spread proportionately across the city, county and school district levies. The credit is a maximum of $304 on a $76,000 market value property and becomes $0 at a market value of $414,000.

Top of Page