The 2013 legislative session will be remembered for a few important education finance and policy reforms. All day kindergarten funding became a reality, the GRAD rule was retired from the statute books, school boards gained some ability to levy operating funds and equalization for operating levies was enhanced. Amidst these changes it was easy to miss another potential game changing education finance change. That is the creation of a new general education levy.
The new general education levy is titled “student achievement revenue” in the statute books, but there are no grant applications to fill out in order to access this new revenue stream.
The general education levy didn’t make a big splash and that was by design. The general education levy’s legislative champions didn’t necessarily want to draw a lot of attention to the fact that the state was creating a new levy that school districts are basically required to use. Technically, a school board could vote to opt-out of the new general education levy, but they will face significant penalties from the state if they do so.
The new general education levy will raise $20 million across the state. In addition to this, the safe schools levy was authorized to go up by $3.5 million across the state. In order to maintain a net zero levy increase across the state, the legislature reduced the operating capital levy by $23.6 million.
The new general ed levy is a uniform tax rate for all – 0.35% of Adjusted Net Tax Capacity (ANTC). The reduction in the operating capital levy was implemented by increasing the equalizing factor. For districts on the formula, which most districts are, the reduction in the operating capital levy is a little more than the increase with the new general ed levy. But for districts off the operating capital formula (e.g., Orono, Cook County and other districts with very high ANTC / Pupil Unit ), you don’t have the reduction in operating capital levy to offset the new gen ed levy.
Basically we have a fully equalized levy replacing part of a levy that was not fully equalized. Districts will see these changes in their preliminary levy certification documents.
For most districts these changes amount to a revenue wash. For a few districts, the change will amount to a slight levy increase that taxpayers will see on notices going out this fall. It will be interesting to see if and how the legislature will use the general education levy in the future. Metro legislators were cool to the idea and rural legislators liked reinstating the general education levy after a 12 year hiatus from school finance.