Marshall school board proposes property tax levy increase of 1.94 percent

MARSHALL — The total 2018 proposed property tax levy will increase from 2017 by $128,458.35 or 1.94 percent, business director Bruce Lamprecht said during the Truth in Taxation presentation at the Marshall Public School board meeting on Monday.

The total amount to be levied in 2017 and collected in 2018 is set at $6,761,509.05 — general fund of $3,548,42570, community service fund of $283,348.76 and debt service fund of $3,029,734.59. The board will vote on whether or not to certify the proposed property tax levy at its next board meeting.

“We’re proposing a 1.94 percent increase from last year,” Lamprecht said. “The trend has been, over the past five or six years, increases. There’s been one decrease there. The rest have been increases.”

In a pay 2017 versus pay 2018 levy comparison, two funds showed a decrease: general fund (-$29,836.75 or -0.83 percent) and community service fund (-$3,958.64 or -2.11 percent). The general debt service increased by $161,500.96 or 5.9 percent, while the OPEB service fund increased from $752.78 or 0.57 percent.

“So general debt service, if you refer back to that $155,000 on that debt excess that changed again, that’s where a great majority of our $128,000 increase from 16-17 to 17-18 is in fact taking place,” Lamprecht said.

As required by law, all school district budgets are divided into separate funds — general, food service, community services, capital outlay, debt service and transportation. In a comparison of 2016-17 actual and 2017-18 revised budget, the change in revenues was up 5.08 percent (from $36,924,517 to $38,799,306).

“An increase in school taxes does not always correlate to an equal increase in the budget,” Lamprecht said. “School district budgets are divided up into separate funds, with the general fund being the major of them. That’s where most of the revenues and expenditures flow in and flow out of.”

Lamprecht said there wasn’t much to talk about in the comparison except tot he 19 percent increase in capital outlay.

“A lot of that (increase) is because of long term facilities maintenance, which is being ratcheted up now for the third year as far as what we get per pupil unit for long term facilities maintenance,” he said. “So that’s why there’s the increase in revenue on capital outlay.”

On the expenditure side of the budget overview, the numbers show a 8.06 percent increase (from $36,044,542 to $38,948,163). The capital outlay fund shows a 90.69 percent change.

“It’s really refiguring and configuring what we’re doing between general fund and capital outlay fund as far as budgeting expenditures and long term facilities maintenance,” Lamprecht said. “The reason why there’s such a significant change is because this number here — $853,000 — there was a lot of adjustments that were made from capital outlay fund during the audit process to the general fund. In some respects, that is understated and this number here — $1,628,000 — is more accurate, more correct, especially with the additional long term facilities maintenance funding that we’re receiving and the projects that we have on the books for 17-18.”

Lamprecht said all Minnesota districts are now authorized up to $724 per pupil unit in referendum revenue without requiring voter approval and that of 331 Minnesota school districts, 216 of them have voter referendum authority in excess of $724 per pupil.

“This is something you’re familiar with — there’s not really a growing dependence on the referendum revenue, it is dependence on referendum revenue,” Lamprecht said. “In 1993, 65 percent of districts had referendum revenue, averaging $332 per pupil. For 2017-18, 331 of 331 Minnesota districts have referendum revenue and/or optional revenue authority, averaging $1,296 per pupil.”

Lamprecht reiterated that every district has some type of referendum revenue, whether it’s board-approved or local optional revenue.

“That $1,296 is 20.5 percent of the general education formula allowance,” he said. “That’s a pretty significant number, comparing it with the actual funding per pupil we get.”

The under funding of special education has been a financial challenges for a lot of school districts, including Marshall. According to Minnesota Department of Education’s fiscal year 2015 report, the cost the providing special education program, on average, was 40 percent underfunded, necessitating the transfer of $766 per pupil from regular program resources to support an underfunded program mandated by state and federal law.

“Special education is just not funded the way it needs to be funded,” Lamprecht said. “With all the programs that the Marshall school district has, we do a wonderful job in special education, but the funding isn’t commensurate with all the programming, all the staffing that we do in fact have to deliver the services to our special needs students.”

Lamprecht said it was important to note that public education in Minnesota is strong. And it’s strong at MPS. Due to state law, 100 percent of juniors and seniors are now being offered the ACT at no cost. He also noted that MPS’s composite ACT score (22.2) is higher than the state average (21.5) and national (21.0) — the 2017 national composite score is based on 60 percent of 2017 graduating seniors taking the ACT.

Another highlight in the Truth in Taxation presentation was that the Ag2School 40 percent ag bond credit will go into effect in 2018.

“It’ll be annually-appropriated from the general fund,” Lamprecht said. “Farm and private timber land taxes will go down in 284 school districts beginning in 2018, with over $40 million in tax relief statewide.”

The total savings in Marshall Public School district is $306,523. Savings per $500,000 in land value is $157.03.

“We are happy that our advocacy efforts on behalf of agriculture land owners in the district were worthwhile and glad that those efforts and Ag2School will benefit farmers in the Marshall district,” board vice chair Matt Coleman said.

To put it in perspective, Lamprecht said that if the Ag2School credit could have been included in the levy information, there would have been a reduction of $178,000 — or 2.7 percent — in the total tax levy for 2017 payable in 2018.