Filed Under (Uncategorized) by Jeff Fastnacht on 06-03-2013

One of the major topics being discussed in the legislature this year is how to reduce local property tax.  Following the defeat of the property taxation vote in the fall of 2012 it is no wonder why the legislature has their ears up on this issue.  I would like to take a few lines to share what is being discussed, at this time, and their implications on your school district.

The first is property tax reduction, which is a key component of the Governor’s education bill.  As has been done previously the legislature is seeking a mechanism to deliver local property tax relief.  For those that remember in 2008-2009 the Ellendale School District levied 179.45 mills for the general fund (max at that time was 185).  After that buy down program mills dropped to 104.95 in 2009-2010 (new maximum was 110).  Since that time mills have held steady or dropped as was the case this present year as the general fund levy settled out at 94.68 mills.  So over the course of these 4 years the mill levy has dropped nearly 47%.  The legislature in HB1319 is now proposing to buy down general fund taxes to a new maximum of 92 mills.  I realize that is not a significant buy down since Ellendale is very near that level right now but they are trying.  There are provisions to drop that level even lower but at this time that is a discussion in the Senate.

Personally, I do support the concept of buying down local property tax.  I am not a huge fan of always using the education formula to do it.   A is my view due to a  long list of reason focusing on some legislatures desire to weed out many small schools.  None the less, I believe our state is doing well financially and that if the money is not being used for the common good then it should be in the hands of the people who earn it, all of us.

The other bills worth a few comments are HB 1290 and HB 1465.  Both of these bills aim to reduce the growth of political subdivisions.  Each sets a restriction on growth of dollars requested by taxation.  Both of the bills dabble around a 3% limit.  In each bill limits are set and growth is not available without a will of the people by a 55 or 60% approval.  My concern is who is watching the hen house, the legislature or us.  I am not a fan of rules from the federal government.  In fact, I think the lower on the totem pole those take place I think the better. So should it not be us that tells our School Board, City Council, and County Commission if taxes are rising too fast and what is important or not.  In particular the Governor’s new education funding bill deducts monies from their payment to the school based on how much is collected locally in property tax.  Thus if property tax valuations would rise, as they have, 10-15% the state would deduct that much more from their payment to the school.  The district would then be forced to cut programs since it would only be able to make up 3-5% of those funds due to the growth limitations.  Again, I understand the intent, I understand the desire to not have other agencies gobble up any tax relief being provided, I get it.  I just worry that local control is being taken away.  I believe it is us that should decide if we need to fix a road, build a park, hire a cop, or  hire a teacher, and then it is our responsibility to pay for it.

There is a good article on the tax limitation bills at