The Lake Superior School District Board approved its 2020 levy and budget information during its meeting Tuesday, Dec. 10, in Two Harbors.
The school board voted in September to set the tax levy at the maximum amount allowed by the state. The levy is set to increase by 3.91%, or a $188,000 increase.
The maximum levy is based on calculations completed by the Minnesota Department of Education, which administers the funding formulas governed by state statutes. The state formula for revenue is based on pupil units, which is a weighted enrollment measure. The state sets a maximum of $424 per pupil unit in local optional revenue for the fiscal year in all districts, regardless of location or enrollment size.
This includes a 5% increase on referendum market value, which is assessed on homesteads and businesses, and a 16% decrease on net tax capacity, which is assessed to all parcels of property in the school district and takes into consideration the classification of the property such as homestead, commercial/industrial, agriculture and seasonal recreation, along with the taxable market value.
"In some situations, the tax levy will increase but that doesn’t mean more revenue for us. It’s one of those formulas where the state will decrease their aid as we increase our levy," business manager Sara Girard said. "Vice versa, if the levy decreases, then the aid increases. So we’re really a neutral revenue; there’s no additional funding for us."
The net tax capacity is an example of the latter scenario. An increase of $65,000 in taconite funds meant a decrease in the taxable levy.
The district operates a budget of about $22.77 million in revenue and $23.20 in projected expenditures. The local property tax levy accounts for about 22% of the budget. The remaining funds come from a variety of governmental sources, including state aid funds.