Student Opportunity Gaps

Four Bills on School Levy Reform Reach Senate Committee

By March 3, 2013 No Comments

The Senate Tax Committee last week took up several bills that would reform school levies.

Seasonal and Recreational Properties
SF 386 (Saxhaug) would return seasonal and recreational properties (non-residential homes) back to school district Referendum Market Value (RMV) and take them out of the statewide property tax levy.

Pelican Rapids Superintendent Deb Wanek testified in support of the bill. She articulated the difficulties in getting their referendum passed because of local homeowner frustration due to the fact that high valued lake homes don’t share in the RMV levy burden. MREA also testified in support of this bill.

The cabin owners’s association testified to being more or less neutral to the proposal. Cabin owners are concerned that they might pay more in some districts if voters approve a high amount of referenda. However, they have seen big increases in the statewide levy and will pay $42 million a year under Governor Dayton’s plan. Going back on school RMV may be a better option for most cabin owners.

The loss of more than $40 million to the sate appears to be the biggest hurdle to for this proposal to moved forward.

Education Advancement Revenue
The committee also heard SF 576, which calls for the creation of “Education Advancement Revenue” by allowing school boards to set a $300 per pupil levy on the district’s adjusted net tax capacity (ANTC).  The bill would require any referendum authority in that district to come down by that same amount. MREA testified in support of this bill.

Equalization Aid
Two more bills (SF 177 and SF 569) were reviewed.  These bills would restore state equalization aid to school district operating referenda and debt service levies.  These bills come at a significant cost for the state.  SF 177 is more aggressive and would cost $422 million in the next biennium and almost $800 million in the tails. SF 569 costs less at $304 million in the next biennium and $684 million in the tails.

Will They Pass?
All of these bills were held over for possible inclusion in the omnibus tax bill.  Given the better news in the budget forecast, some of these proposals may gain traction this year.  Senate Tax Chairman Rod Skoe is certainly an ally and advocate for reforming school levies.