MARSHALL — It’s been about 10 years since taxpayers in the Marshall Public School District last voted on an operating referendum for school funding. Now, school board members are considering whether it might be time to go back to the voters with a new referendum.

Factors like inflation and legislative changes in Minnesota have affected how much of an impact the current referendum makes for MPS’s revenue, said Shelby McQuay, of public finance advisers Ehlers. McQuay gave the Marshall school board a presentation on operating referendums at their Monday meeting.

“As you’re considering generating some additional dollars from your voters, it’s not out of the ordinary. Most districts are doing this for a variety of reasons,” McQuay said.

Members of the MPS finance subcommittee would discuss the option of a referendum between now and the next school board meeting, said Marshall Superintendent Jeremy Williams.

McQuay said Ehlers and MPS district staff had explored three possible options for an operating referendum. According to the presentation, one option would be for an additional $460 of revenue per pupil unit, one would be for an additional $600 per pupil, and one would be for an additional $675 per pupil.

McQuay’s presentation went over some background information on school operating referendums, as well as the status of MPS’s current operating referendum.

“An operating referendum is one of the revenue sources that you can use from your property taxpayers, in addition to the General Education Formula and the other revenue you get from the state,” McQuay told board members.

She said 72% of Minnesota school districts have an operating referendum to help fund their schools. In Minnesota school districts, the average referendum authority for the 2021-22 fiscal year was $850 per pupil.

School operating referendum funding does have some limits, McQuay said. An operating referendum must be approved by voters, and can only be put on the ballot during the November general elections.

“There’s also a limitation on the per-pupil amount (of funding) that you are allowed to generate,” McQuay said. “That number increases each year with inflation, but that number this year is around $1,970.”

Even if voters pass an operating referendum, the school district would have to go back to the voters every 10 years to re-authorize the referendum, she said.

Voters in the Marshall Public School district approved a referendum of $200 per student in 2003. In 2007, voters approved increasing the referendum to $675 per student, and renewed it in 2011.

“However, your current allowance today is zero,” McQuay said. That was due to some state legislative changes, she said. “The first change that occurred was how pupil units were calculated,” which had an affect on the amount of revenue the district would receive, she said.

In addition to that, MPS also shifted to using local optional revenue (LOR), which offsets referendum revenue.

“Those changes generated $724 (per pupil unit) that the board approves as part of their budget. But if you get it through the LOR side, it’s a subtraction off your voter-approved. You cannot have both,” McQuay said. “So that’s how you got to a zero balance, essentially, on your voter-approved referendum, is because you shifted your voter-approved authority to just an LOR component. And that was the restriction that the Legislature said, that if you’re going to take this, it’s not going to be additive.”

Another reason many school districts were considering operating referendums was because the state’s funding allowance for education has not kept up with inflation since 2003.

“Had that number kept up with inflation, we would see almost $800 more per pupil, relative to 2003,” McQuay said. “I think a lot of districts are going to their voters for operating referendum authority to just close that gap.”

If the school district decides to take an operating referendum to MPS voters, they would need to call for a special election by Aug. 26.