MPS business services director Dion Caron talked about the school district’s budget and proposed levy Monday night as part of MPS’ annual “Truth In Taxation” hearing. By state law, the district is required to talk about its current budget compared to the previous fiscal year’s actual revenue and expenditures, the proposed tax levy for the next year, and an explanation of why taxes are being increased.

The school district is proposing a levy of $7.419 million to be collected in 2020. That is an increase of about $664,937 from the previous fiscal year.

“That is our levy increase. Property owners’ increase will vary from case to case,” Caron said.

About $4.163 million of the levy would go to general debt service, an increase of about $1.219 million compared to the previous fiscal year.

A lot of the increase in MPS’ debt service aid would be for the premium and interest payment on the building bonds from the referendum this spring, Caron said.

Although the proposed levy would be an increase of 9.84% from the previous fiscal year, Caron said it was also important to remember that Minnesota’s Ag2School tax credit for agricultural land would mean savings for taxpayers in the school district. The Ag2School credit is set to increase to 50% next year, and to 70% in 2023.

Based on data from the Lyon County auditor’s office, the Ag2School credit saved a total of $304,736 in the Marshall school district in 2019, Caron said. The possible savings for 2020 would be about $519,654.

If the impact of the tax credit was included in MPS’ levy information, the levy payable in 2020 would only have shown a 2.1% increase instead of a 9% increase, Caron said.

Caron also gave an overview of the Marshall school district’s original budget for the current fiscal year, compared with the actual revenue and expenditures for the 2018-19 fiscal year. The current year’s budget was approved in July, and the revised version will be finished by the end of the month or early January, he said.

The current MPS budget includes general fund revenues of about $30.249 million, an increase of 2.54% over the previous fiscal year.

“That’s mainly due to the 2% increase, along with a slight enrollment increase from last year,” Caron said.

Caron said budgeted revenues and expenditures for food service were up compared to the previous fiscal year. However, he said that was partly due to the number of snow days in the district in 2018-19. With fewer days of class, the district was both spending less on food service and getting less in food service revenue.

Caron said schools are facing challenges with the level of funding they receive from the state. Minnesota’s general education revenue formula hasn’t kept up with inflation since the 2002-03 fiscal year. The state legislature did approve per-pupil funding increases of 2% a year for the 2019-20 and 2020-21 fiscal years, Caron said, “But the gap doesn’t seem to be closing much.”

For Marshall Public Schools, the 2% per year increase would translate to an increase of $126 per student in 2019-2020 and $129 in 2020-21.

“We appreciate that each year, but it doesn’t coincide with the inflation increase,” Caron said. The per-pupil funding would have had to go up to $639 in order to keep up with inflation since 2002.

The two biggest areas of expenditures for MPS were special education, which made up 19.19% of general fund expenditures, and regular instruction, which made up 50.84% of the general fund expenditures.

“That’s our teachers, that’s our education,” Caron said of the regular instruction category.

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