The Albert Lea school board approved a 3.8% increase in the district’s levy Monday, though whether taxpayers will see an increase in their school district portion of their taxes in 2020 depends on their home values.

School board member Jill Marin voted against the levy increase, and board members Kim Nelson and Dennis Dieser were absent.

Jennifer Walsh, executive director of finance and operations for Albert Lea Area Schools, said if a person’s home value did not increase this year, his or her taxes will remain steady. A home valued at $100,000 that did not see a change in value will actually see a slight decrease in school district taxes.

This is because the overall tax capacity has increased throughout Freeborn County and the district. Homes that are seeing higher market values, however, will likely see higher taxes because the values of their homes have increased.

Marin said she could not support the 3.8% levy increase and did not think the district should look at taxpayers as a source of revenue. She said she would have supported a lesser amount and said the district needs to do whatever it can to operate as fiscally responsible as it could.

School board Chairman Ken Petersen said he is concerned about what taxpayers are asked to pay as well, but he also wants to make sure to provide the best possible education for students within the school system.

“I think a 3.8% (increase) is what we need to continue to provide the students what they need,” Petersen said.

School board member Angie Hanson said she was hesitant to approve a smaller levy because of the state aid in turn that the district would not receive.

With the vote, the total levy will increase by $328,800 to over $8.98 million.

It is the same as what the board approved as a preliminary levy in September.

Local property taxes makes up a little over 10% of the general fund revenue, according to an audit report presented by Greg Larson of the Hill, Larson & Walth accounting firm. State funding provides a majority — or 83% — of the general fund revenue.

Walsh said funding is determined through a state funding formula and enrollment, which has increased steadily since 2015 by almost 200 students, according to the audit.

Walsh said since 2002, when looking at the rate of inflation and how much funding per pupil has increased, the district for the 2020-21 fiscal year is behind about $639 per pupil, or 9.7%.

If funding had kept up with inflation, there would have been another $2.5 million in revenue coming in.

She said this is a concern for districts because over 80% of costs are salaries of district staff. When adjustments need to be made to the budget, this doesn’t leave much space for other changes.

She said it becomes a challenge to continue to provide staff competitive pay and benefits.

Factors that will impact the district’s budget include contract settlements, enrollment and new accounting requirements.

Look to a future edition of the Tribune for more about the audit.