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By Todd Lechtenberg

Executive director of Finance and Operations Lechtenberg

Each November, as property owners, farmers, and businesses prepare for the new year, they receive proposed tax statements. This often raises questions about rising tax bills, particularly concerning the school levy portion. Here, we will focus on understanding how the school levy is determined and what factors cause changes from year to year.

How school levies

are determined

School district levies in Minnesota are regulated by state law. The Minnesota Legislature sets limits on the amount and type of levies a district can impose. The Minnesota Department of Education calculates the maximum levy each district can request annually. Local school boards then decide how much of this limit to levy, balancing the needs of their schools with the community’s capacity.  In Austin Public Schools, the property tax levy generates about 10% of the district’s yearly revenue.

Voter-approved

levies vs. other levies

There are two main types of levies on your tax statement:

Voter-Approved Levies: These include building or operating referendums approved by voters in public elections. For example, in November 2022, Austin Public Schools passed an operating referendum, adding $470 per pupil. Additionally, debt payments are made on building referendums that funded past projects, often repaid over 20-30 years. Voter-approved levies currently account for about 32% of the Austin district’s levy.

Other Levies: These are set by school boards within parameters determined by the Minnesota Legislature. They cover specific needs, such as operating capital, long-term facilities, safe schools, building leases, community education, and post-employment benefits.

The Truth-in-Taxation Process

Minnesota’s Truth-in-Taxation process ensures transparency and allows taxpayers to voice concerns about their taxes. Here is how it works:

Preliminary Notices: In November, property owners receive a “Notice of Proposed Property Taxes” from the county, showing estimated taxes based on proposed levies from local governments, including school districts.

Public Hearings: School boards, such as Austin Public Schools, are required to hold Truth-in-Taxation hearings where taxpayers can provide feedback and ask questions. Austin’s hearing is scheduled for Dec. 12, at 6 p.m.

Final Decision: After the hearing, the school board finalizes the levy, providing taxpayers with a voice and transparency before taxes are set.

Why Do Levies Change?

Levies change year-to-year due to five main factors:

State Legislation: Changes in state funding impact local levy needs; less state aid may increase local levies.

Voter-Approved Levies: New or renewed voter-approved levies add funds, while expired levies reduce the tax burden.

Property Value Changes: Rising property values increase revenue without rate changes, potentially reducing levy rates.

Debt for Projects: Debt incurred for school projects affects levies until it is repaid.

Student Enrollment: Changes in enrollment levels impact funding needs, as more students typically require more resources.

Through this process, school levies support the essential needs of districts while balancing community contributions.  If you have any questions regarding the upcoming Truth-in-Taxation meeting, please contact Todd Lechtenberg at 507-460-1913 or todd.lechtenberg@austin.k12.mn.us.