by Jim Boyle
The Elk River Area School Board approved on Dec. 14 a tax levy of $60,342,939.63, an increase of 4.26% over last year’s local property tax levy.
The tax levy is a combination of voter-approved levies and other levies.
The approval came after a truth in taxation hearing led by Kim Eisenschenk, the school district’s director of business services. No one from the community came to speak at the hearing portion of the meeting.
Eisenschenk gave four reasons for the increased levy, including student enrollment adjustments based on student projections and actual students last year.
The other two reasons were long-term facility maintenance costs and legislative changes to aid versus levy formulas.
Last year’s general fund budget was $161,322,112. This year’s general fund budget is $171,210,254, which is a 6.1% increase.
The Elk River Area School District went to taxpayers in November 2019 for approval of $115 million in building bonds. The district did the bonding for that during the 2019-20 school year, which ushered in $115,234,400 for the 2019-20 school year and the construction of Prairie View Middle School started this year, in addition to a variety of expansion and remodeling work across the district. The 2020-21 budget calls for spending $60.5 million out of the building fund. The bonds that produced that revenue will be paid off over time with the district’s debt service levy.
Last year more than $23 million was spent in debt service. This year there is projected to be nearly $27 million spent in debt service.
The Elk River Area School District’s entire 2019-20 budget was $315.7 million, which included the $115.2 million in the building fund as well as the food service, community education, debt service, employment benefit debt service and an employment trust fund. One of the budgeted expenditures in 2020-21 is $60.5 million from the building fund.
Of the school district’s $171.2 million in revenue for the 2020-21 school general fund operating budget, $132.9 million will come from the state. That’s nearly 78% of the general fund budget revenue.
The Elk River Area School District receives $6,567 per student. Eisenschenk showed a 15-year history of pupil funding, which includes three years of no funding increase, three years with less than a 1% increase and five years with a 2% increase. She said the combination of flat funding and moderate increases has contributed to the school district’s budget shortfalls and reliance on local operating referendums to provide more stable and reliable funding.
Seventeen percent or $30.2 million will come from local property tax levies. The rest of the budget comes from other local and county sources, sales and other conversions, federal sources and investment income.
The school district’s 2020-21 general fund budget calls for $166,923,918 in expenditures.
The majority of dollars will be spent on wages and benefits for staff. Salaries ($96.1 million) and benefits ($35.4 million) account for 77% of the expenditures.
“We are a service organization,” Eisenschenk said.
The rest are for purchased services, supplies/materials, capital expenditures and other expenses.
The Elk River Area School District’s budget was published in the Nov. 28 public notices section of the Star News.
To see a copy of the Dec. 14 PowerPoint, visit: https://bit.ly/2KRlaBH.
The final levy was the same as the preliminary levy approved in September.
School taxes are one factor in residents’ tax bills along with city and county taxes as well as market values that were set earlier and were the topic of a county board of equalization hearing in the spring.
Changes in market values, class rates, homestead market value exclusions, agricultural land market value credits, new programs and levies authorized and mandated by the Legislature and voter-approved referendums or bonds all affect tax bills.