The school board held its “truth in taxation” hearing at last night’s marathon school board meeting, and the district’s finance director explained the details of this year’s levy. Her explanation made it clearer to me why the district didn’t levy the maximum amount last year, asking for $15.2 million instead of the maximum $16 million.
One reason was that the district capped the amount of the capital levy (used to pay for facilities, technology, and textbooks) at the $750,000 amount approved by voters in the 2011 referendum. This cap is in effect for the 2013 Payable levy as well, again bringing the total levy in under the maximum amount allowed by the state.
Another reason for the lower levy in the current year was that, in 2011, the legislature replaced the homestead property tax credit with a homestead exclusion, a move which saved the state money in tax credits, but effectively raised property taxes for most people. The school district chose to levy less than the maximum allowable amount last year in order to mitigate the impact of this change at the state level. (MPR produced a little video, using Lego, that is helpful for understanding the change from a homestead credit to a homestead exclusion.)
This year, the school district is no longer to use its levy to mitigate the impact of the homestead property tax change. In last year’s legislature, the DFL wanted to restore the homestead credit, so we may see action on that front in the coming legislature.