Column: Plenty of factors when considering District 518 tax levy
WORTHINGTON — The new year has come and it is the time of year when many people start looking at not only their personal income taxes, but — with the referendum — their property taxes.
In November each year, the county mails out proposed property tax statements to all owners of property in Nobles County. These tax statements are often not correct since each of the taxing entities address the actual levies during their December meetings, and often these are lowered from the original proposed taxes. This can often create confusion for many people, since the taxing system in Minnesota is often very complicated.
District 518 has always levied the proposed maximum (with the school board’s option to under-levy) in October — like all school districts — since a number of the calculations continue to change until Dec. 1. This allows for each of the districts to ensure the correct final number is approved during the December school board meeting. Over the last 10 years, District 518 has under-levied approximately $3.3 million, and in last year’s levy the $1 million under levy has created a high percentage levy increase when in reality it should have been just under 6 percent. This is why the school board has decided to under-levy $500,000 this year. Along with the continued growth in the tax base, this year’s levy would have been minimal had there not been an under levy last year.
So what goes into the calculation of taxes? First, you need to review your tax valuation of the property, the actual tax rates set by the state, property sales and — of course — what the district actually levies. Over the past 10 years, District 518 has refinanced current debt for a total savings of $4.244 million and will pay off future debt this month of $2.425 million — and again under-levied $3.3 million to address taxpayer impact. Over the past 10 years, the average levy increase has been 2.18 percent, even though you may have seen an up and down of school taxes based on the under levies.
The remaining current bond debt will end in 2024 with the 2000 bonds (Prairie Elementary and the high school) and the remaining HVAC upgrades in 2010. The other debt would be under lease levy for the ALC/Gymnastics facility (lease levy).
Along with all the other change, the legislature passed a 40 percent reduction that is an Ag Bond Credit that is permanent law that provides a credit to ag and timberland. This started in 2018 and provides over $40 million in tax relief statewide. Likewise, in District 518 the tax base continues to grow approximately 6 percent each year, which typically will help to lower increased tax impact for other property owners.
The last thing I would like to mention is that as District 518 continues to grow, so does the district levy, since this is based on a per-pupil funding formula defined by the state. As we continue to gain more students, the levy will increase slightly to align with this growth of students.
Each of the elements plays a role in defining the final levy for the school district. As I look back in past years, this levy is comparable to 2009. In addition, I believe you can even look back to 1999 and see a similar comparison.
District 518 would like to thank you for the continued support, and remember to attend one of the many Trojan events.
John Landgaard is the superintendent of District 518 schools.