By Todd Lechtenberg

Executive Director of Finance and Operations Lechtenberg

Each November, as landowners, farmers and businesses prepare for the new year, they receive tax bill proposals. This often raises questions about the increase in the tax bill, particularly with regard to the share of school levies. Here we will focus on understanding how the school fee is determined and the factors that cause changes from year to year.

How do school deductions

are determined

School levies in Minnesota are regulated by state law. The Minnesota Legislature sets limits on the amount and type of levies a district can impose. The Minnesota Department of Education calculates the maximum levy each district can request each year. Local school boards then decide how much of that limit to levy, balancing the needs of their schools with the capacity of the community. In Austin Public Schools, property taxes generate about 10 percent of the district’s annual revenue.

Approved by voters

direct debits vs. other direct debits

There are two main types of deductions from your tax return:

Voter-approved levies: These include the establishment or organization of referendums approved by voters during public elections. For example, in November 2022, Austin Public Schools passed an operational referendum, adding $470 per student. Additionally, debt repayments are made on real estate referendums that financed previous projects, often repaid over 20 to 30 years. Voter-approved levies currently make up about 32 percent of the Austin district levy.

Other samples: These are set by school boards within parameters determined by the Minnesota Legislature. They cover specific needs, such as operating capital, long-term facilities, school safety, construction leases, community education and post-employment benefits.

The tax truth process

Minnesota’s Truth-in-Taxation process ensures transparency and allows taxpayers to voice concerns about their taxes. Here’s how it works:

Preliminary opinions: In November, property owners receive a “Notice of Proposed Property Taxes” from the county, listing estimated taxes based on levies proposed by local governments, including school districts.

Public hearings: School boards, such as Austin Public Schools, are required to hold truth in tax hearings where taxpayers can provide feedback and ask questions. Austin’s hearing is scheduled for Dec. 12 at 6 p.m.

Final decision: After the hearing, the school board finalizes the levy, providing taxpayers with voice and transparency before taxes are set.

Why are the levies changing?

Levies change from year to year due to five main factors:

State Legislation: Changes in state funding impact local levy requirements; a reduction in state aid may lead to an increase in local levies.

Voter-approved levies: New or renewed levies approved by voters add funds, while expired levies reduce the tax burden.

Property value changes: Rising property values ​​increase income without changing rates, potentially reducing levy rates.

Debt for projects: The debt contracted for school projects affects thecompetes until it is repaid.

Student registration: Changes in enrollment levels impact funding needs because more students typically require more resources.

Through this process, school levies meet essential district needs while balancing community contributions. If you have any questions regarding the upcoming Truth-in-Taxation meeting, please contact Todd Lechtenberg at 507-460-1913 or [email protected].