Tax impact of District 834 levy slightly higher than expected

The Stillwater Area Schools levy ended up have a slightly higher tax impact than expected. Before voters approved an increase in taxes, the district estimated the owner of a $250,000 home would pay an additional $167.31. Now it has revised that number to a cost of $178.48 for the same home.

“We didn’t do it to be intentionally misleading,” District Finance Director Kristen Hoheisel said. “There are many line items that go into what we’re taxing for.”

The difference does not reflect a change in the voter-approved levy, Hoheisel explained. The changes were adjustments to the expected amounts of other levies the district collects that are not voter approved, such as the community service levy.

“Community services have gone up from $876,000-899,999, which is about $20,000, more and other line items occur year after year,” Hoheisel said. “The adjustments aren’t final until this point of the year. It ebbs and flows and creates different impacts in the various levies. With the referendum, though, we’re going to do exactly as we said we’re going to do.”

She also offered further explanation:

“There is an annual slide that takes place, which explains why there’s a different tax impact, and some of that goes into other levies, like community education. It does happen annually, but it is especially magnified in an election year.”

Hoheisel said the district is continuing to see positive trends, however. Examples she cited included: General fund revenue between 2012, 2013 and 2014 has decreased due to the drop in student population in the past, but this year the student population is going up. The community education fund is staying relatively level, and the debt service fund will continue to decrease as more bonds come due. And the board has said it is continuing toward managing the budget more effectively.

A change in market values of homes in the area also played a factor in the new final number.

“I fielded a call from a taxpayer that had a change in their market value, which did come into play,” Hoheisel said.

She explained that if one property’s value stayed the same and the neighbor’s value decreased, the property that didn’t lose value may pay a larger percentage of the burden than in the past.

Different communities are impacted differently by the school levy. Median value homes in Bayport saw the largest percentage increase in school property taxes (17.48 percent) compared to median value homes in other cities in the district. The city with the largest percentage decrease in school property tax for a median value home was in Marine on St. Croix, with a 4.36 percent decrease. The school tax on a median value home in Stillwater only went up by 0.84 percent.

One resident of Lake St. Croix Beach, David Pergrande, came to the Truth in Taxation hearing on Thursday, Dec. 5.

“I voted no, though I volunteer in the schools, and I’m probably the only Tea Party Libertarian that decided to come speak to you tonight,” Pergrande said. “I want to thank you for the pre-levy work you did confronting the many negatives and try to prepare for a no vote if it hadn’t passed. I came to talk with you about my levy, in other words, I voted no and what are you doing to reduce the cost? If you have the option to under-levy, why don’t you do this? Many of us in this recession have lost houses, dealt with unemployment and are struggling to live within our budget. We don’t get to ask for a raise and get more money, so what are you doing to say no to things, to reduce the cost of what I’m paying you?”

Superintendent Corey Lunn said the district had done some restructuring, cut $500,000 from the district office budget, went to self-funded insurance, is pursuing grants, and is seeking partnerships in the community to reduce costs.

“We’ve been very proactive in cutting these costs doing everything from what I’ve mentioned to canceling magazine subscriptions,” Lunn told Pergrande.

In order to keep the levy impact at the original estimate, the board could opt to under-levy, which means levying less than the maximum allowed. Hoheisel said the state would penalize the district for doing so. The school board chose not to do so.

“The board has had these conversations in the past,” Hoheisel said. “They had these meetings months ago, and if you under-levy they’re not collecting the revenue that you’ve projected to spend. You only levy what you spend. It’s about what do we need and what we can do without hurting ourselves in the long run, and then to the flip side of that, we need to find out what is reasonable to taxpayers to pay.”

Contact Avery Cropp at [email protected]