Local referendum voters will have to make some quick mental calculations and a few educated guesses to figure how the $358 per-pupil request will actually affect their property tax bills this year.

Thursday, November 01, 2001

Local referendum voters will have to make some quick mental calculations and a few educated guesses to figure how the $358 per-pupil request will actually affect their property tax bills this year.

With the recent tax cuts and shifts passed by the legislature in the last session, most Minnesotans are expecting to see some serious relief on their next statements. State revenue experts predict an average overall property tax cut of 22 percent.

But the proposed levy referendum, which would generate $1.7 million in additional operating revenue for Albert Lea school next year, would take a piece of that relief for education.

In other words, voters will choose between the full tax cut passed by the legislature and a slightly diminished tax cut for the sake of the school district.

&uot;It’s a unique situation. People will have the chance to pass an operating referendum while avoiding an overall increase in the school portion of their property taxes,&uot; said Superintendent Dr. David Prescott.

Finance Director Mark Stotts said it’s helpful to focus only on the school portion of property taxes. The city and county both have the ability to raise their levies without going to the voters, and both have yet to finalize their budgets.

That means the only thing residents can accurately determine before voting is how much the school portion of their property taxes will be.

Stotts said four factors are dramatically decreasing the school portion of the tax bill this year:

* The state’s takeover of the general education levy.

* The state’s takeover of the school’s existing levy referendum up to $415. For Albert Lea, that means the $341 voter-approved levy that was already in place will no longer be paid for through local property taxes.

Bond referendums, like the one passed to pay for Albert Lea’s new high school, will still be paid from local taxes.

* Agricultural property is now exempt from operating levy referendums. Only the house, garage and one acre on each farm are taxable.

* The state pays for 53 percent of successful excess levy requests.

When added together, these four factors account for a 45 percent decrease in the school’s levy from a year ago.

&uot;Bottom line: Most everyone will see a big decrease this year in their school district taxes,&uot; Stotts said. &uot;It’s pretty much across the board cuts.&uot;

Homes with taxable values of $50,000 will pay an extra $54 dollars for the referendum, but that expense will be absorbed by new homestead credits of about $200. Owners of a $100,000 home would pay $108 for the referendum, but receive a credit of more than $280. In both cases, Stotts said, school taxes would be even lower without the referendum.

Business and ag property will see dramatic reductions, Stotts said. Agricultural homesteads are eligible for sizable credits, and businesses will notice a tax-rate compression that will reduce their tax burden.

For example, a business valued at $300,000 will pay about $3,000 less in school taxes even if the referendum is approved.

&uot;I think, from what I’ve heard, that making the state more competitive in terms of taxes was the reasoning behind all of these cuts and shifting,&uot; Stotts said.

If the referendum passes, Stotts said the public can be relatively assured that the district will not have to make any major budget cuts in the near future. Though the board is talking about eventually closing an elementary school due to declining enrollment, that decision could be staved off for a few years, he said.

&uot;I think we could stay the course for the next five years. We could maintain our programs and keep our staff intact,&uot; said board member Ken Petersen. &uot;It’s time for the public to make a decision about the quality of our schools.&uot;