School tax hearing draws questionsTen chairs were left open for residents of Alexandria School District 206 at the district’s annual Truth in Taxation hearing Tuesday night. Although most of the chairs were filled, only three were taken by residents wishing to make comments – one by Alexandria Mayor Dan Ness; one by a young man who recently purchased a house for his family and wanted information about how his taxes were figured; and the other by an elderly woman who has a summer home on Lake L’Homme Dieu.
By: Celeste Beam, Alexandria Echo Press
Ten chairs were left open for residents of Alexandria School District 206 at the district’s annual Truth in Taxation hearing Tuesday night.
Although most of the chairs were filled, only three were taken by residents wishing to make comments – one by Alexandria Mayor Dan Ness; one by a young man who recently purchased a house for his family and wanted information about how his taxes were figured; and the other by an elderly woman who has a summer home on Lake L’Homme Dieu.
School administrators filled most of the other seats; there were a couple left open.
The district’s business manager, Tom Wieczorek, explained that the proposed tax levy for the 2008-2009 school year is $8.1 million – a 13.2 percent increase over last year’s levy. The levy will be set and formally approved at the next regular board meeting, Monday, December 15.
Last year’s tax levy was $7.2 million, which was an increase of 8.12 percent over the previous year.
When time came for public comments, the young man in the audience said, “I am new to this, so how does each person’s tax get figured?”
Wieczorek said the levy hearing is mandated by the state and that the school district has little to do with the levy amount.
All levy dollars, except those that are voter approved, are set by the state, he said. The state determines the formulas used to set the levy.
Wieczorek explained how taxes work in general, but noted that for individual tax questions, he said the county assessor would be better able to answer those questions.
He added that the tax a person owes could go up if the valuation of his/her home goes up. In addition, if a person changes the status of a home from non-homestead to homestead, along with a change in class rate, it would affect the person’s taxes.
The woman with a home on Lake L’Homme Dieu also had a few questions for the board. She was upset that her school taxes went up as much as they did and questioned what the school district was “going to do with all this money.”
“Do you have to levy that much?” she asked. “I think I have been treated badly.”
The woman also questioned why the school district isn’t reducing its budget like Douglas County, to which Wieczorek explained that the county has the flexibility to reduce its budget, which in turn reduces its tax levy on residents.
“We don’t have that choice,” Wieczorek reiterated. “Ours is set by the state. Both the county and the city can have a cap on their levy amounts We can’t reduce our levy without the possibility of losing state aid.”
Board chair, Dean Anderson, explained that the school district is allotted an amount of money per student as set by the state. The state decides to pay a portion of that money and then whatever amount is leftover, gets paid for by district residents.
In essence, he explained to the woman, “You are paying for what the state decided not to pay for.”
After a brief discussion between the school board, Wieczorek and the frustrated woman, Anderson said, “We duly note your formula issues and tax concerns; we all pay taxes, too.”
On a handout given to board members and those in attendance, the basic school finance equation was explained: Local levy plus state aid should equal revenue.
The handout shared key points to keep in mind:
• Revenue formulas are set by the state Legislature except for voter approved referendums.
• The local levy and state aid mix are set by the state Legislature.
• An increase in local taxes does not guarantee an increase in revenues for the school district.
The handout also explained the seven key steps in the levy process:
• The Douglas/Pope County assessors determine the estimated market value for each parcel of property in the Alexandria School District.
• The state Legislature sets the formulas for tax capacity and market value. The formulas determine how much of the tax burden will fall on different types of property.
• The Douglas/Pope County auditors calculate the tax capacity and market value for each parcel of property in the school district, as well as the total tax capacity for the school district.
• State legislators set the formulas, which determine the maximum amounts of taxes the school district may levy in each category.
• The Department of Education calculates detailed levy limits for the school district, which are based on the formulas approved by the Legislature. The limits tell the school district the exact amounts that may be levied in each category.
• The school board adopts a proposed levy in September based on the limits set by the Legislature. After a public hearing, the school board adopts the final levy. The final levy cannot be greater than the preliminary levy, except for the amounts approved by the voters or changes made by the Department of Education.
• The Douglas/Pope County auditors divide the final levy by the tax capacity to determine the tax rate needed to raise the approved levy amount. Multiplying the tax rate by each parcel’s tax capacity and market value will determine the Alexandria school district’s tax.
Property tax relief
The Legislature provides several different types of property tax relief:
•Homeowners’ and renters’ rebates are given to taxpayers whose property taxes are disproportionate to their income.
•A targeting refund is also available for homeowners whose taxes increase by more than 12 percent from the prior year. No income limits apply to this refund. Property owners file for the refund using state form M1-PR, which is mailed with state income tax forms and instructions. These forms can also be obtained from post offices, libraries, banks, on the Internet at www.taxes.state.mn.us, by phone at (651) 296-3781 or by mail at Minnesota Tax Forms, Mail Station 5510, St. Paul, MN 55146-5510.
A LOOK BACK
Levy amounts set by School District 206:
1995-96 – $9.6 million
1996-97 – $10.7 million, 11.5 percent increase.
1997-98 – $9.9 million, 7.3 percent decrease.
1998-99 – $9.5 million, 3.6 percent decrease.
1999-00 – $10.7 million, 11.7 percent increase.
2000-01 – $10.6 million, .09 percent decrease.
2001-02 – $2.7 million, 74.8 percent decrease.
2002-03 – $2.9 million, 7.9 percent increase.
2003-04 – $3.2 million, 9.3 percent increase.
2004-05 – $4.7 million, 49.7 percent increase.
2005-06 – $5.8 million, 23.1 percent increase.
2006-07 – $6.6 million, 14.1 percent increase.
2007-08 – $7.2 million, 8.12 percent increase.
2008-09 – $8.1 million, 13.2 percent increase.