Bill would extend Minn. school district power to tax for repairs, avoid voter approval

/ 18 January 2015 / Shawna
Kia Farhang, Star Tribune, January 18, 2015
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FOREST LAKE, Minn. — Opening a hatch in the gym floor at Forest Lake Elementary, Brandon Perry looked down at the web of heating pipes below. Any issue with the school’s more than 60-year-old heating system, and Perry or another custodian has to climb down and wriggle through the maze to search out the problem.

“I actually haven’t seen all of it,” Perry said.

Forest Lake would like a new above-ground boiler in that building, but it doesn’t have the cash.

A longstanding school funding law allows 25 Minnesota school districts to raise residents’ property taxes for maintenance funds without direct voter approval. The rest of the districts, including Forest Lake, don’t have that luxury. That’s led to a big gap in funding among districts for things like carpet replacement, security upgrades and heating and cooling modernization.

State Sen. Kevin Dahle wants to change that arrangement, extending the taxation power to districts statewide. He and other bill proponents call it a matter of fairness. Most of the 25 districts on the list are in the metro area. Some didn’t meet the list’s criteria but were added simply because legislators got them on.

The disparity can lead some schools stuck with poor facilities that can distract students, proponents say, and siphon funding away from things like teachers and textbooks.

“It’s not fair. A building ages the same across the state,” said state Sen. Karin Housley, a Republican who represents Forest Lake and co-authored the Dahle bill.

The bill from Dahle, a Northfield Democrat, would require Minnesota to chip in funding for districts with lower property tax bases to help equalize their take. A state facilities working group estimated last year that requirement would cost Minnesota about $300 million in its first three years.

That’s too much state spending for Rep. Steve Drazkowski, a Republican from Mazeppa. The chairman of the House Property Tax and Local Government Finance Division said lawmakers shouldn’t take taxation decisions out of voters’ hands.

Dahle and others say voters would still have a say because they elect school board members. Drazkowski dismissed that. He suggested another way to make things fair: stripping the 25 districts of the ability to tax without a ballot question.

Dahle said it’s hard to revoke authorities already granted. And outstate districts need the power, he said.

Stillwater Area Public Schools is one of the envied 25 districts. It’s used levy funding to pay for new carpeting and clocks, among other things, said Dennis Bloom, director of operations for the district.

Kristen Hoheisel, the district’s finance director, calls the levy money — between $3 million and $3.5 million annually over the past few years — crucial. It allows Stillwater schools to pay for maintenance up front and avoid a heftier check later, she said.

The Forest Lake school district needs more than $100 million for its maintenance backlog, including heating, ventilation and air conditioning upgrades and more secure entrances. Residents haven’t voted to raise their property taxes and help fund those repairs in nearly a decade.

Technically, some districts not on the list of 25 exemptions can already bypass voters for maintenance funding up to a point, raising $64 per student through property tax hikes on district residents, said Tom Melcher, director of the state education department’s school finance division. But districts that don’t have to get voter approval spend more than twice as much per student on long-term maintenance than those that do.

Dahle’s bill, set for its first hearing Thursday, would take effect in fiscal year 2017 with some caps on how much districts could raise through maintenance levies. Those caps would phase out over three years.

More than 50 districts back Dahle’s legislation. Larry Martini, business services director for Forest Lake Area Schools, said it makes sense.

“If our kids are cold or uncomfortable or they’re distracted by leaky roofs in the building, that disrupts learning and they don’t do as well,” Martini said.