Referendum to provide additional money with no increase in taxes

By Chad Koenen

Publisher

A change in state legislation could result in an increase in local funding for Henning Public School, all-while not increasing taxes in the school district. 

During a special school board meeting last Wednesday night, the Henning School Board approved seeking voter approval for a new Seasonal and Recreational Tax Base Replacement Aid levy, which would replace the current $535 per student operating levy that has been in place for a number of years. The new levy would coincide with a change at the state level, which will provide additional state levy money to school districts that have a large portion of seasonal properties. 

In the past, a portion of property taxes paid by seasonal property owners goes to the general fund at the State of Minnesota and St. Paul, and not necessarily to the local school district. As a result, local taxpayers were forced to make up the lion-share of the cost for general operating expenses for school districts. 

Under new legislation known as Seasonal and Recreational Tax Base Replacement Aid, the money that seasonal property owners already paid in taxes will be sent back to school districts like Henning to not only provide the potential for additional income for rural school districts, but take some of the burden in funding school districts off full-time residents as well. 

“That would not stay local, not go to your school district and not help local properties,” said business manager Jordan Anderson of the previous program. “With no change in property tax dollars to (property owners), the district can generate extra money. 

“We would capture the seasonal property tax money and our local properties would see a decrease,” he went on to say.

Due to the unique nature of the Henning School District, as well as other school districts in rural Minnesota like Underwood and Perham who are also seeking a similar referendum this fall, the state will return the seasonal property taxes that are going to St. Paul back to the school district where it was collected. In essence, the Henning School District could receive an extra $350,000 in revenue a year to help close budget gaps, without needing to increase taxes locally. The increase is due to state funding that the school district will receive, as well as keeping the taxes that are currently being collected and sent to St. Paul local—pending voter approval at the election ballot in November.

“We are considered a land rich district so when you look us up, the equalization and the state aid is zero,” said Henning School Superintendent Melissa Sparks. “That’s why the more we keep researching this it makes the more sense it makes to do what we are talking about (at the special meeting) because we can get some state aid and offset it for our district taxpayers.”

The referendum would be used for general operating expenses like instruction and in the classrooms, as opposed to a building project. If the referendum is rejected by taxpayers, the current $535 per pupil operating levy would stay in place, as well as the better-than $700 per pupil levy the school board can issue and the money collected on seasonal properties will continue to be sent to St. Paul to be used on projects statewide. 

“The biggest thing for people to understand is the money will no longer be going to the metro, but will stay local,” said Anderson. “Do we want that money to go down to the metro area or do we want it to stay local? That’s what it really comes down to.”

Henning School Board Member Andy Eckhoff said the new state legislation is similar to the Ag 2 School tax credit and agreed that keeping the locally collected money, rather than having it spent elsewhere, would be in the school district’s best interest. 

Other school members echoed that sentiment that voting yes on the referendum, which will appear on the November ballot, will not only help the local school district by increasing funding, but would do so without an impact on local taxpayers. 

In order to implement the Seasonal and Recreational Tax Base Replacement Aid at Henning School, board members are seeking voter support in November to replace the current operating levy with a new operating levy to maximize the state support Henning receives, while not increasing school taxes from what Henning School currently receives today. It is estimated the new referendum, if approved by taxpayers, could generate an additional $350,000 a year.

One of the concerns expressed by school board members was the need to educate the public about the benefits of changing its current operating referendum into a new one that coincides with the changes in state laws. On the ballot voters will be asked to replace a $535 levy (the school board can also approve a better-than $700 per year levy without voter approval) with a new $2,180 levy. Board members stated that without the right information given to voters ahead of time that information may lead some voters to believe they are voting for a significant tax increase, yet in reality, there will not be an increase in the school portion of their taxes if the levy is approved. 

Board members also expressed the need for the additional funding to help bring stability to the school district as it navigates changing enrollment numbers and projections, especially since the additional funding will not impact taxes locally.

  More information concerning the new referendum vote that will appear on the November ballot will appear in future issues of the Citizen’s Advocate.