Tax levy to drop in District 196

Lower levy will lessen impact if referendum passes, officials say

A tax increase potentially created by District 196’s levy referendum proposal may be smaller than initially projected due to a 7.6 percent drop in the board-approved property tax levy.

On Sept. 23, the Rosemount-Apple Valley-Eagan School Board approved a $68.2 million preliminary payable 2014 property tax, which is $5.6 million less than the payable 2013 tax levy.

The decrease is a result of additional equalization aid the district will receive from the state as part of the Omnibus Education Bill passed earlier this year. The state provides equalization funds to school districts that have few commercial properties to ease the tax burden placed on homeowners.

The lower board-approved levy will reduce the potential tax increase caused by a successful levy referendum, said Jeff Solomon, finance director for District 196.

The proposed referendum, which will appear on the Nov. 5 ballot, would provide the district with a new 10-year levy of $1,486 per pupil — approximately $30 million per year. Voters will be asked to revoke the district’s existing $20 million levy, which is set to expire in 2015.

District officials say the referendum is necessary to avoid major budget cuts over the next two years.

If the levy passes, the district’s portion of property taxes on a $225,000 home — the average value in District 196 — would increase by $184 in 2014. But the lower board-approved levy would lower taxes on the same home by $128, which would leave the homeowner with a net increase of $56.

If the levy fails in November, most homeowners in District 196 would have the school portion of their property taxes fall in 2014 despite a projected rise in property values, Solomon said.

The average-valued home in District 196 is expected to increase by $9,000 next year from $216,000 in 2013.

Without the referendum, an increase in overall property wealth would cause property taxes to fall.

Property taxes account for 19.42 percent of District 196’s revenue.

The board has lowered the district’s tax levy every year for the past four years. As a result, the district’s board-approved tax levy has fallen by 5 percent from $75.85 million in 2011 to $68.18 million in 2013.

Debt refinancing and other money-saving actions by the board enabled it to make prior decreases, Solomon said.

The School Board is expected to vote on the final levy following a truth and taxation hearing at its Dec. 9 meeting. The final levy can be lower but not higher than the preliminary amount.