Lakeville Schools levy may drop in 2013

Fall levy referendum possible

The Lakeville Area School District’s levy is set to decrease in 2013, a result not reflected in taxpayers’ property tax estimates sent this fall.

Business Services Director Mark Klett told School Board members that Internal Revenue Service rules kept the district from refinancing debt prior to Oct. 1, so the county could not use the revised figures to calculate the preliminary tax notice amounts.

Since property tax notices were sent, the district has refinanced debt, resulting in a proposed 2013 levy of $31.8 million, instead of the $32.1 million reflected on residents’ tax estimates, a 0.9 percent reduction from 2012.

Under that levy, the school portion of property taxes on a $230,300 median-priced Lakeville home is projected to drop $27 (2.2 percent) from 2012, according to Ehlers, the district’s financial adviser.

Dakota County calculations show that median-level property will lose 6.5 percent of value in 2013, down from $246,500 from 2012.

Anticipated are state funding cuts, in part reflective of declining enrollment, and an added $604,000 to the levy to fund post-employment benefits, retiree health insurance benefits paid in addition to pensions.

The district is looking at ways to attract home school students and online learners next year, and this year the district employed refinancing as a levy buffer for taxpayers.

School Board Member Bob Erickson said the refinancing will save the district about $1 million per year through 2021.

“This isn’t a one-time $1 million reduction,” Erickson said. “We’re going to see a reduction in our debt service each and every year for eight additional years.”

Despite the decrease, Jamieson Keister, a 20-year resident, said his property taxes have risen steadily and are now 12 percent of his take-home retirement pay.

“Forty percent of that is relevant to the school district,” he said.

He called for the elimination of programs not directly related to K-12 education and suggested that levies to finance those things be allowed to run out.

“As these numbers go down, you will attract people into this district, and increase your tax base,” he said.

A higher tax base would spread the cost of the levy to more properties, reducing the overall burden.

In a later interview, Board Member Kathy Lewis said Keister frequently appears before the board with tax concerns, and makes points she considers while making decisions.

She added that the district has few options for funding because of state regulations.

Klett said the state sets formulas that determine revenue, sets tax policy for schools and authorizes the district’s maximum levy.

The state has also in recent years balanced its budget by cost-shifts to local governments and retained a portion of the per-pupil payments to school districts, often forcing school districts to borrow.
“The only option open to us is taxation,” Lewis said. “We can raise advertising dollars and fees, but even in those we are limited in what we can do.”

In an interview, Superintendent Lisa Snyder said the district is considering asking voters to pass an operating levy referendum next fall.