Rural school leaders testified last week on a bill that would help rural schools collect seasonal rec property tax dollars. The Senate E12 Committee on Wednesday heard the details of SF1323 from its author Sen. Tom Saxhaug (DFL-Grand Rapids) and the need for it from Pine River-Backus Superintendent Cathy Bettino, Business Manager Jolene Bengtson, and Pelican Rapids Superintendent Deb Wanek.
This bill boosts the local optional revenue equalizing factor for school districts where more than 30 percent of the district’s market value is from noncommercial seasonal recreational property. The market value tax base of a number of districts that have not accessed local optional revenue have a high percentage of seasonal recreational property.
In 2013 the Legislature created a new equalized component of general education revenue called local optional revenue. Local optional revenue equals $424 per pupil unit for every school district. If a district has operating referendum revenue, local optional revenue is offset from the approved amount of referendum revenue.
For some districts, local optional revenue is additional revenue. For other districts, local optional revenue provides space under the referendum allowance cap. For some, it provides added equalization aid (and lower property taxes).
Not all districts have chosen to access local optional revenue. Local optional revenue is equalized on the referendum market value (RMV) tax base at the same rate as referendum revenue in the second tier, using an equalizing factor of $510,000 per pupil unit. The RMV tax base excludes seasonal recreational property and agricultural lands (other than the house, garage and one acre of land).
Senate E12 Chair Chuck Wiger laid the bill over for possible inclusion in the education finance omnibus bill. The House heard their version of the bill last week and was also laid over.