By Chad Koenen

Publisher

A change in state legislation could result in a big increase in funding for a number of school districts in the region, without increasing the school portion of taxes already being paid—if voters approve the new Seasonal Tax Base Replacement Aid levy on the November ballot. For the Henning School District that could result in an additional $350,000 per year in funding on taxes already being collected in the school district, but currently being sent to St. Paul and the State of Minnesota due to how taxes are collected for seasonal and recreational properties.

With nearly half of the school district properties being classified as seasonal or recreational, that change in state legislation could result in important funding without local property owners noticing any difference in the school portion of their taxes. 

According to Henning School Superintendent Melissa Sparks, the new Seasonal and Recreational Tax Base Replacement Aid levy would replace the current $535 per student voter-approved 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. 

The change in state legislation would result in no increase in taxes locally, but requires a majority of voters to approve the measure during the November election. If the levy fails, the current operating levy and board-approved levy would stay in place, while the taxes collected on seasonal and recreational properties would continue to be sent to St. Paul, instead of staying locally to help the local school district.

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.

While the wording on the ballot may look like a significant increase in taxes, due to the unique nature of the Seasonal Tax Base Replacement Aid levy, local taxpayers will not see an increase in their school taxes as part of the new levy. That is because the Henning School District will receive the school portion of the taxes for seasonal and recreational properties moving forward, instead of having that money sent to St. Paul to be spent statewide.

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 cover the lion-share of the cost for general operating expenses for school districts. If the new Seasonal and Recreational Tax Base Replacement Aid levy is approved by a majority of voters in the school district the money that seasonal property owners already paid in taxes will be sent back to school districts like Henning. This would not only provide the potential for additional income for rural school districts, but also take some of the funding burden off full-time residents. 

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.

The new state legislation is very narrowly targeted to rural and recreational areas of the state. In the region school districts like Underwood, Henning, Perham and Frazee-Vergas will all seek a similar Seasonal Tax Base Replacement Aid levy vote in November. To meet the qualifications for the special levy, a school district must already have a voter-approved levy in place and have at least 15 percent of its school district classified as seasonal or recreational. 

Sparks said the Henning School District has one of the largest percentages of its land classified as seasonal or recreational at 42.33 percent. This means a large portion of its tax base does not currently benefit the Henning School District and is sent directly to St. Paul for state spending or general fund projects. 

“We could get $350,000 and the seasonal/recreational properties will be paying the same amount it is now, it will just be coming back to the school district,” said Sparks. 

The timing could also not be any better for the Henning School District as its local $535 voter approved levy is set to expire in a few years.

“The timing couldn’t be more perfect for Henning,” said Sparks. “While we can keep everything in place for our students, in order to potentially expand  (our offerings) for students we need more revenue.”

If the levy is approved by the Henning School District voters, Sparks said the school district will be able to retain and potentially even decrease class sizes, potentially offer more class courses like College English in-house and help the school district weather fluctuation in grade sizes that are common with small schools. 

One important distinction about this levy and one that the Henning School Board sought a few years ago was that this time around if the levy is approved by taxpayers it would benefit the classroom and not go towards a building project. The operating levy, like the Seasonal Tax Base Replacement Aid levy would go to day-to-day expenses to benefit learning and operating the school district. The funding is necessary to keep a school district’s doors open and pay all of its bills. 

One community meeting was held last week and two more will be held on Monday, Oct. 19 at 6:15 p.m., as well as Wednesday, Oct. 21 at 3:30 p.m. for local residents interested in learning more about the referendum and the potential benefits to the school district. Residents can also contact the school at 583-2927 and speak with Sparks for additional information as well.