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PUBLIC HEARING�2021-22 Budget �& Proposed 2022�Property Taxes

December 2021

Resources provided by

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TODAY’S AGENDA�Factors Affecting Taxes

Big Picture
Your Property Classification and Value
School District Factors Affecting Pay ’22

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�Big Picture�

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Why have a �Truth in Taxation Meeting?

Truth in Taxation Law, passed in 1989�
Two major requirements:�

Tax Statements�Counties must send out proposed property tax statements in November based on preliminary tax levies set by all taxing jurisdictions (counties, cities, townships, school districts, etc.)�
Public Hearing�Most taxing jurisdictions must hold a public hearing prior to certifying the final levy and discuss:

Payable 2022 levy
Fiscal year 2022 budget
Public comments

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This is the school district’s annual required hearing

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Who sets the School Levy?

Components of a District Tax Levy are either:�

Set By State Formula By Legislature

General Education Formula, Operating Capital, Career & Technical, Reemployment, etc.�

Voter Approved as Authorized by the State

Operating Referendum or Building Bonds

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How is my property tax determined?

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State Aid Impact

(Data source, MN Department of Management and Budget-Price of Government, 2021)

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21-22 School Year Budget

Fund	Revenues	Expenses	Net
General	($16,892,281)	$16,661,557	($230,724)
Food Service	($ 655,600)	$ 655,600
Community Education	($ 295,509)	$ 276,486	($ 19,023)
General Debt Service	($ 1,901,498)	$ 1,865,904	($ 35,594)
Student Activities	($ 55,000)	$ 55,000
OPEB �Revocable Trust	($ 81,800)	$ 75,250	($ 6,550)
TOTAL	($19,881,688)	$19,589,797	($291,891)

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Payable 2022 Final Levy as a Component of Revenue Budget

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21-22 Expense by Object Code

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�Property Classifications and Value�

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Property classification and market value�
Sent Spring 2021; cannot change value�
Watch for 2022 statement in SPRING and where to appeal

Know Your Valuation

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Effective Tax Rates

Property Classification Rates set in statute by Legislature and Governor and result in range of Effective Tax Rates:

(Source:Tim Strom,Jared Swanson House Research)

Property Classification	2021 Estimate�
Farm	0.54%
Seasonal Rec	0.96%
Residential Homestead	1.22%
Apartment	1.55%
Public Utility	2.89%
Commercial-Industrial	3.18%

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Share of Tax Liability

Property�Classification	Market �Value Share �(2020 Assessment)	Share of �Net Taxes �(Payable in 2021)
Farms	17.7%	6.8%
Seasonal Rec Residential	3.8%	2.6%
Commercial and Industrial	14.6%	32.6%
Residential Homes	49.8%	43.4%
Other Residential	14.1%	14.5%

(Source: Tim Strom- House Legislative Analyst )

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�School Factors Affecting Pay ’22 Levies�

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Your School District Tax Levy

Possible reasons for changes to your parcel:�

Change in value or classification to your property�
Change in enrollment numbers�
Change in valuation of property in district �Equalization aid depends on district property wealth per pupil�
Local decisions and requirements�
Adjustment for prior years (estimate to actual)�
Legislative changes (Local Optional Revenue)

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�Putting it All Together�

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Levy Comparison by Levy Category�Proposed Pay 2022 Levy

The board approved Maximum in September and the amount certified tonight will be $2,235,534.84.

These are the various levy components showing last year’s levy in blue, the levy proposed tonight in red.

General RMV - Other is comprised of general operating levies including career tech, safe schools, lease levies, equity, transition and the local optional revenue. The final levy amount in these categories has decreased $77,654.47 over last year’s levy.

Possible reasons for changes in our levy include:

1. Changes in Property Values:

Changes in RMV, or Referendum Market Value. RMV excludes certain market value property classifications. In this district, the most prominent exclusions are Seasonal Rec and Residential and Agricultural over the house, garage and 1 acre.

2. Changes in Enrollment

3. Changes in Legislation

If there are ANY changes in enrollment, the legislative actions in the prior slide are all based on enrollment; therefore if there are any changes in what the district reports to MDE to actual numbers impacts the levy. That is why it is crucial to use the best available data for pupil counts and projects in ADMWE (Average Daily Membership Web Estimates) so there aren’t big adjustments or swings in the levy in future years.

Debt Service Voter Approved is the Building bonds. Compared to last year, this has decreased $17,862.28.

Debt Service Other This category is decreasing $47,037.06 from last year’s levy. Many of the levies are based on estimates and each year there are adjustments to actual for previous year’s levies. One of the adjustments that are made to the Debt Service levies is called a “Debt Excess Reduction.” Every year we’re required to levy 105% of our bond payments for the year to ensure we’re able to make those payments. We can’t spend these funds for anything other than the annual bond payments and consequently, there ends up being excess dollars in the Debt Service funds. The state has a debt excess calculation they do to keep these funds in check and they adjust by increasing or decreasing our levies. This is a state calculation and out of our control.

This biggest portion of this debt is the Facilities Maintenance Bonds for the boilers that ISD #317 combined with the Health and Safety Projects for Indoor Air Quality.

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More Information

State of Minnesota for Property Tax Relief

1-800-652-9094

County Auditor

Itasca County Courthouse

123 NE 4^th Street

Grand Rapids, MN 55744

Auditor's Office Phone: 218-327-2859� Treasurer's Office Phone: 218-327-2860�

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QUESTIONS?

Thank you for attending this hearing.