District 728 Levies

(Editor’s note: The following information was pulled from the Elk River Area School District’s website.)

The Elk River Area School Board voted to put two levy questions on the Nov. 6, 2012 ballot. The first question is a renewal of an existing 10-year levy; the second is a new request addressing all-day, every-day kindergarten, technology, curriculum and operating expenses.

The first question is a renewal of an existing 10-year levy; the second is a new request addressing all-day, every day kindergarten, technology, curriculum and current school district operations.

Passage of question 1 extends an expiring levy at the same dollar amount; it is not expected to cause any significant change in property taxes.  The passage of the second question is contingent on the passage of the existing operating levy. Passage of this levy will result in new taxes.  The School Board decided not to include an inflationary factor into either of the two ballot questions.

Question No. 2 will cost the owner of a $150,000 home about $14 a month or $168 a year. For the owner of a $300,000 home, it will cost about $27 a month or $328 a year.

Question 1 is one of three existing levies and the largest in terms of funding per student ($386).  This levy is according to the Superintendent of Schools, “critical to the future of our school district’s funding.” “We have been very good financial stewards for our taxpayers,” said Dr. Mark Bezek. “We are trying to address the needs of the district and place the wants on hold for better financial times.”

The second question, in the amount of $400 per pupil, introduces a first-year strategic plan priority of all-day, every day kindergarten in the amount of $2.2 million.

The question also requests $400,000 for technology, $400,000 for curriculum and the balance of $3 million for ongoing operational expenses.

What’s the difference between a bond election and an operating levy referendum?

A tax levy election will ask ISD 728 voters to support additional funding of our schools’ day-to-day operating expenses. An operating levy is a property tax rate based on dollars per thousand of assessed valuation of the property. Voters often confuse an operating tax levy with a capital or bond election. Capital (bond) funds can only be used for maintaining, improving or building new schools or related school district facilities.

I still don’t really understand what a voter approved Operating Levy is and why you are asking to raise my taxes. 

A clarification: the first question is not asking for new taxes, but a continuance of existing taxes.  An operating levy is a ballot measure that requests funding for a local school district when state funding falls short. This funding is generated through property tax revenue and goes to the General Fund to support the day to day operations of the school district.  Taxpayers determine the quality and level of educational excellence within their school district through their support of local voter approved operating levies.  This levy is not about building, that comes in the form of a bond, and the School Board has not presented a Bond ballot measure to voters in 2012.  ISD 728 is not building a new school or additions.

Why is the district asking for new programming when it still has a deficit to deal with?

The 2012-2017 Strategic Plan, created with the input of our communities, calls for an All-Day, Every-Day Kindergarten program.  This is projected to cost $2.2 million.

Will All-Day, Every-Day Kindergarten be in every elementary school?

Yes, but only if voters approve both questions.

 

Why is it that Question 1 has to pass for Question 2 to be enacted?

Because if the school district does not have the continued funds ($5.7 million) from the expiring levy, it is unable to maintain existing programs; therefore, without these funds, we cannot initiate new programming.

Tax questions

How much will this levy request cost me?

Regarding taxes on the first question, which is a renewal, as this is an expiring levy at the same dollar amount, it is not expected to cause any significant change in property taxes.  For the second question, your taxes (commercial or residential) are based on your assessed property value.  We have an online calculator that you can use to find your taxes that can be found at http://www.elkriver.k12.mn.us/departments.cfm?subpage=19334&adminActivate=1.

The district has stated that it reduced property taxes by three percent in 2012.  Why didn’t my property taxes decrease?

Because property taxes have many variables such as county, city, township, schools and other government entities. Change in property values throughout the district also affect property taxes. While ISD 728 taxes that have been renewed by voters have not changed, other taxes may have increased.  The district will receive three percent less in property taxes in 2012 than in 2011.

Why will the district receive less property taxes than 2011?

This was based on a variety of factors, including enrollment, health and safety projects and county property values.

Didn’t the state just increase funding last year for schools in Minnesota?

For the 2011-2012 fiscal year, the state legislature voted to increase the per pupil (student) amount that is paid to schools via the basic formula, which is the funding school districts receive from State sources. Many legislators are claiming that this increase should be enough to eliminate the need for school districts to ask for more money at the local levy.  While ISD 728 did receive an increase, it barely made a dent in the operating budget. Given our current deficit problems, much of which was funded by reserves, this does not eliminate the need for increasing our operating levy.  It is also important to note that the per student increase was given in anticipation that school districts will incur interest charges because the state delayed state aid payments, forcing many school districts to borrow money.

A clarification…isn’t the funding provided by the state increasing?

Not enough to keep up with the increasing costs faced by school districts across the state. While additional revenues were provided this year, and the state picked up a greater share of special education funding to alleviate the burden on school districts’ general fund budget, it isn’t enough. On average over the last decade state revenue remains far below the inflation rate, and it doesn’t make up for years of under-funding. Keep in mind that common household expenses have increased, and so have the district’s expenses.

What does the delay in state aid payments mean as it relates to the state funding school districts?

The state is required to fund all public school districts.  One of the ways the state may balance its budget is to delay state aid payments to public schools.  This in turn means funding is not coming into the school districts during the school year, but after the school year is completed.   When this happens, many school districts have to borrow cash to make their payments.

Financial questions

If ISD 728 receives funding from state taxes, why are additional funds needed from an operating levy?

In 2001, state educational aid dropped sharply.  Funding for public schools from state sources was flat for three years and has not kept up with inflation.   State funding to a school district is based on student enrollment. ISD 728, after nine years of continued student growth, now is enrolling fewer students (approximately 150 in 2012) so there is no funding for this loss of students.  In addition to flat funding, Minnesota has implemented a policy of shifting payments owed to school districts.  As a result, our district receives about 60% of state revenue in the current fiscal year while the remaining 40 percent is paid at the beginning of the next year. Imagine if your employer decided to pay you 60 percent of your salary in the current year, but you had to wait a year to get the other 40 percent.

What is ISD 728 doing to cut costs?  

For the 2011-12 and 2012-13 school years, ISD 728 is deficit spending. Leading up to this though, the school district has a proven track-record of financial transparency and award-winning management.  Included not only in the internal management steps, is also the external of going to the legislature the past three years for proposals that would have brought equity funding to his school district. We recommend you review a partial list of what the school district has done to cut costs (use the link at left).

How did administrators arrive at the $2.2 million for All-Day, Every-Day Kindergarten?

A long-term cost analysis was conducted to determine the variables (i.e., staffing, supplies, etc.).

What does it mean to retain five percent of the district’s current operating budget?

This is the $5.75 million (equivalent to five percent) as noted in Question 1.

Are there plans to use the Fund Balance to offset the projected deficits?

Yes, this is one of the options that will be explored.

If the Fund Balance does not make up the difference in the deficit, how will the remaining deficit be resolved?

One of the options is to reduce programs, services, personnel and maintenance of facilities and grounds.

Will teachers be cut as part of this deficit reduction?

Approximately 85 percent of our budget is people; no decisions have been made as to what positions would be eliminated.

Where can I access the current year budget?

The budget can be read or downloaded by clicking here.

What date does the budget have to be approved by?

The School Board must officially pass a budget by June 30 of each year; however, for planning purposes it must be completed earlier.

Does the district have to create a budget before the state legislature has approved the state budget?

This is one of the major problems with a broken system.  A school district has to forecast its budget planning based on a variety of “unknowns,” to include how much funding the state will provide.  The district budget has to be approved by June 30th of each year, regardless if the state budget has been approved and funds allocated.

Can the district cut transportation even more?

Through the support of a transportation consultant, we were able to reduce our transportation contract by approximately $1 million.  We continue to look for ways to make the contract even stronger for the district and taxpayers.

Is the district planning on building any new schools?

The simple answer is no…we cannot build a school (although we need at least two) because we do not have the funds.  As voters across the district did not support a bond in 2007, the superintendent has shared that he will not pursue a tax initiative until our communities clearly show they will support this need.  We also recognize that voter tolerance  is such that any request for new taxes at this time would not succeed.

What happens if one question fails?  Both?

Plans are being formalized to begin budget reductions ranging from $2 million even with passage of both questions, to $5 million if the second question fails to $12 million if both questions are not passed.

What is the greatest impact the proposed budget cuts will have on schools?

All budget cuts have an impact on our classrooms, staff, schools and communities.

School Board/Administration questions

Who or what approves the budget?

The district’s School Board.

Why is the School Board asking for another renewal?  Didn’t it just have an election in 2010 and 2008?

The school district has three operational levies currently in place.  Each, passed initially by voters, is good for 10 years, then must be presented to voters again if the School Board chooses to do so.  The School Board did ask voters to renew levies in 2008 and 2010 and voters passed both.  The School Board decided that funding for the third levy is critical to the school district’s budget, and so is asking voters to renew this question in 2012.

The district is asking for an additional levy (Question 2) of approximately $6 million, yet at the same time is saying it will need to make budget reductions between $2 and $12 million depending on the outcome of the two votes.  Why?

The district is losing $1.5 million in one-time state aid June 30, 2013; it previously lost $2 million in one-time federal stimulus funds.  The amount that needs to be offset will be determined if there is an outcome of the election (“yes, yes, “yes-no” or a “no-no” vote).

Isn’t the district top heavy? Why don’t you cut administrators?

Quite the opposite…ISD 728 is not “top heavy” with administrators and in fact has fewer administrators than the state average. As Minnesota’s eight largest school district we actually have less administrators than our peers, and at 3.41 percent of our budget, our administrative (district leadership, principals) line item is in line with the state average. The district does not have several key positions and/or departments fully staffed because of budget restrictions.  As a result, some administrators are performing anywhere from two to three jobs to ensure the mission continues.

I hear that there are plans for new auditoriums at Rogers and Zimmerman high schools?  Are we paying for these also?

As of September 2012, there are no formal plans to build auditoriums at either of the two schools.  This is not to say that the school district doesn’t want auditoriums at these schools.  The district went to voters with a bond in 2007, but the measure was voted down.  There currently is not enough money in the school district’s budget to build auditoriums, or does the Superintendent believe the public is currently ready to vote for bonds that would pay for these auditoriums.  In the interim, ad-hoc volunteer groups have met (as of September 2012) to discuss alternative ways to fund auditoriums at both schools.

I don’t have children in school.  Why should I vote yes? 

That of course is an individual decision; however, here are some thoughts to consider.  People choose to live in our school district because of our schools, our innovation and our commitment to our communities. If our schools start to decline, the entire ISD 728 community will feel the impacts.  If you’re a single individual, married without children or even a grandparent, the facts are that among others good schools have a positive impact on your property values.

What do you mean good schools have a positive affect on my property values?

It’s true…the quality of a school and a community are intertwined.  Research clearly shows property values and sale prices are higher in strong, high performing school districts.

I am a business owner, why should I say yes?

Local businesses thrive in communities with strong schools.  ISD 728 partners with local businesses and vice-versa.  Additionally, many of our students will go on to college, trade-school or perhaps even the military, and many of these will come back to join the local work force.  As a business owner, it is worth knowing that you are helping to educate your future workforce.

How does the Strategic Plan fit into the budgeting process?

All major decisions are aligned with the district’s mission and the strategic plan.

If you have a question for the school district that you would like answered, please e-mail it at feedback@elkriver.k12.mn.us

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