MARSHALL - As required by state law, the Marshall School board had its annual Truth in Taxation hearing during the work session meeting Monday.
Business Services Director Bruce Lamprecht presented information on the current year's budget, including actual revenue and expenses for the past year in addition to information regarding the proposed property tax levy.
Though no members of the public were in attendance at the meeting, community members will soon learn that the school district levy is expected to increase by $300,890.75, or 5.12 percent. The final levy will be set during the Dec. 17 meeting.
There are two major reasons for the increase, Lamprecht said.
"It's because of the money we're leasing to pay for the partnership with Southwest Minnesota State University for the development of the track and field complex and because we've under-levied the last few years and it's finally catching up to us," he said. "Approximately $140,000 of the $167,000 is for the complex, and there's an increase of about $124,000 in the levy amount compared to last year."
Lamprecht noted that an error was discovered on the individual property Truth and Taxation statement put together by the county, which revealed that voter levies had declined. But Lamprecht said that was incorrect.
In the Marshall district, the total proposed 2013 property tax amount includes $4,403,872.16 in voter-approved levies in addition to other local levies ($1,777,204.83) for a total of $6,181,076.99, compared to the school district total of $5,880,186.24 actual 2012 property tax.
"The determination of levy amounts is set by state formulas or the district levy," Lamprecht said. "It's been pretty steady for all the entities (homestead, commercial and farm) for eight to nine years, following the big Property Tax Reform by Jesse Ventura."
Fortunately, Lamprecht said, many homeowners may actually see a decrease because of the district's expanding tax base.
The main variables that cause property tax increases and decreases, Lamprecht said, were changes in market values, changes in class rates/history, market value homestead exclusion, voter-approved referendums and ongoing legislative action.
"One wild card is what the Legislature will do with the integration projects and whether they'll come back as innovation grants, spread the money out among all districts or if the state will keep it all," Lamprecht said. "With the whole legislative session, we have to do a lot of assumptions and see what happens by the time the legislative session gets done."
The 2012-13 budget overview showed a 1.5 percent revenue shortage ($29,751,124 budget) compared to the actual 2011-2012 revenue amount ($30,199,213). The biggest change was in the transportation fund, which decreased by 21.9 percent from a year ago.
"It's a little bit misguiding because of the transfer to zero out the transportation fund," Lamprecht said. "That's not included in the 2012-13 budget at this time."
Audit highlights included a general fund balance of $3,314,461, or 15.6 percent of expenditures, which is far above the target of 8 percent. The capital outlay fund ended with a balance of $763,168, which exceeded the established goal of $400,000 by quite a bit.
On the expenditure side of the 2012-13 budget overview, only a .2 percent change was noted from that of the actual 2011-12 budget.
"I think that will allow us to do a little more with capital purchases than we expected," Lamprecht said. "We'll look at technology, wireless and maybe some curriculum."
Funding has been an ongoing issue for most school districts in Minnesota the past few years, Lamprecht said, especially since funding has not kept pace with inflation and in light of continuous mandates. He noted that the per-pupil revenue for fiscal year 2013-14 is projected to be $401 below the 2004-05 inflation adjusted amount.
"In the general fund, 78 percent is from the state and only 3 percent is from federal," he said. "It's a conundrum we have in unfunded mandates, especially with only 3 percent funding from federal sources."
On the flip side, the majority of general fund spending is for employee salary and wage (64 percent) and employee benefits (18 percent). Along with regular instruction and exceptional instruction, site buildings and equipment top the spending list.
"Those percentages aren't really a problem," Marshall Superintendent Klint Willert said. "We do a good job of putting our resources to good use."
While money is always an issue with any business, Lamprecht pointed out that the money is going to good use, referring to the fact that Minnesota does have a strong public education system. With an average composite score of 22.8 on the ACT, the most commonly-taken standardized college entrance exam, Minnesota was the highest in the nation among the 27 states that had more than half of their college-bound students take the test in 2012.
Students at Marshall also ranked well, with a composite score of 22.4.
"Minnesota leads the way overall," Lamprecht said. "Students that attend public schools get a well-rounded education."