An estimated extra $500,000 will come to the Princeton School District each year for five years starting in the 2014-15 school year without increasing local taxes..
Board Member Chuck Nagle cast the dissenting vote when the resolution was passed 6-1 at the Aug. 27 board meeting. He argued that other non-referendum levy items could push the amount of local tax responsibility up and give the taxpayers the “perception” it was due to this board action.
Board members Deb Ulm (chair), Eric Minks, Chad Young, Howard Vaillancourt, Craig Johnson and Jeremy Miller voted for the measure at the recommendation of Superintendent Julia Espe and Michelle Czech, district director of business services.
The new funding is called “location equity” and was made possible by a tax bill passed in this year’s Minnesota legislative session.
As the Minnesota Department of Education explains it, the legislation allows a school district board to convert up to $300 per adjusted pupil unit of voter approved money into board-approved money.
Not counting the possibility of non-voter approved taxes for things like debt service and health and safety rising, the taxpayers will be paying less in property taxes when this location equity measure is used, starting in payable 2014, Czech explained to the board.
Board members received an Ehlers financial handout showing that the district taxpayers are now paying $1.09 million for excess levy, and that it will drop to $1.04 million in 2014.
Czech explained that the location equity revenue is intended to adjust for the higher operating costs of school districts in the Twin Cities metro area and larger non-metro districts. It will do this by providing access to more revenue without voter approval, she said.
A voter-approved excess levy referendum in the Princeton district about two years ago is giving the district $325 per pupil unit and now it will become $362.36 per pupil unit starting in the 2014-15 school year.
Czech explained how this can happen and still not increase property taxes as a result.
Under location equity, once the district approves it, $212 is deducted from the excess levy referendum revenue, and the state pays that. Czech said that lowers the current referendum to about $150 per pupil unit.
The new legislation allows districts with 2,000 or more students (includes Princeton) to have up to $300 per pupil unit of board-approved authority, she continued.
“This gives us approximately $150 per pupil unit that we can add to our referendum by board authority without affecting taxpayers’ taxes for this portion of 2014 payable,” Czech said.
“Or think of it as no increase over the previous year.
The state is also equalizing the first $300 at a much higher rate, meaning the state will be paying more of the $300 than previously, she said.
Czech said the district could opt out of passing this extra authority, but she finds no reason to opt out of getting the extra state help.
“We continue to fight increasing taxes,” she said.
Czech said the extra revenue “gives us more opportunities for students.”
During the board discussion, Miller criticized Nagle for questioning the move at the board meeting when he had a previous chance to ask questions at the board’s meeting of the finance committee that Nagle is on. Vaillancourt agreed.
Nagle answered that his questions came up since then because, at the time of the committee meeting, he hadn’t read information on a certain website.
Johnson, in supporting the location equity, said it gives the district money it wouldn’t have had to buy items like tables and chairs.
“We won’t get this opportunity again,” he added. “It could change in the next election cycle.”
Johnson also said that he felt rejecting the location equity would be “cutting off the nose to spite the $500,000 extra money the district can get.”
Nagle responded that taxpayers will see non-taxpayer-approved taxes go up on their tax bill.
Johnson called Nagle’s statement a “misquote.” .
Czech said the only way for the non-voter approved levy to go up is for other things beyond the location equity part going up, again mentioning health and safety items as an example. Nagle asked what the cost would be for those things, and Czech said that won’t be known for about a month.