The ISD 2142 school board will likely angle for both an operating referendum and a capital project levy during the upcoming November elections.
The board will smooth out details prior to their August 11 meeting, which is the last date they may certify an operating referendum and capital project levy in order to place it on this year’s ballot, said district finance director Kim Johnson.
“We need to do both of these to help us start getting out of SOD. It’s not going to do everything for us, but I’m not comfortable putting more out on our taxpayers to try to fix our problem 100%,” Johnson said. “We’ve got to still do a lot of work internally.”
Johnson preliminarily proposed an operating referendum valued at $2 million, which would grant the district $1,030 per pupil.
Johnson suggested adding a capital project levy of $1.5 million at the maximum length of 10 years, amounting to an increase of around $18 per year for a taxpayer with a $100,000 home.
Between the two levies, the associated cost increase for taxpayers would add to about $63 per year for a property valued at $100,000.
By adding the capital project levy on top of the operating referendum, the district could apply funds toward technology hardware, athletic uniforms, band equipment, transportation vehicles and more — all of which would not fall under an operating levy, which can only cover day-to-day costs.
Transportation equipment expenses are especially critical for a district as large as 2142, with its 1,800 students traveling millions of miles to and from school on an annual basis across the district’s 4,200 square miles.
“There is no district in the state of Minnesota that looks anything like 2142,” Johnson said. “If people want to keep these schools in their communities, we need the operating referendum and the capital projects levy approved.”
According to a graph prepared by public financial advisory firm Ehlers, ISD 2142’s existing debt service levy will drop steeply after 2029, meaning the first year or two after the ballot measure’s passage would likely pose the highest load for taxpayers.
“The first year is probably going to be the toughest,” Johnson said.
Should voters approve the operating referendum, ISD 2142 will see a major boost from state funding through the Seasonal Recreation Property Tax Base Replacement Aid (STBRA) program.
STBRA passed the Minnesota legislature in May. The program allows districts where greater than 15% of total property value is designated as seasonal recreational to receive state funds compensating them for the lack of operating referendum revenue raised on those properties, up to a maximum of 50% of the district’s voter-approved operating referendum value.
ISD 2142 contains some of the highest seasonal recreational property valuations in the state, Johnson said — meaning large potential STBRA benefits.
Out of a $2 million operating levy, the program would allow the state to cover around $908,000 in district expenses, with the remaining $1 million paid by residents.
“Previously all of that was covered by our taxpayers,” Johnson said. “So that is absolutely huge for us.”
Local voters need to approve an operating levy before a school district can access state aid, however. No voter-approved levy means the district would miss out on the nearly $1 million in state funding, plus the other $1 million from taxpayers.
“(We had) all our legislators supporting us and the idea of it. Now we have to do our part to access it,” said board member Chris Koivisto of Northeast Range. “Otherwise, all that lobbying and all that work was for naught.”
Koivisto advocated for a per-pupil operating referendum value closer to $1,300, higher than Johnson’s proposal.
“I’ve been here long enough to know we’ve been doing a lot internally for quite some time,” Koivisto said.
“Putting (a referendum) out and then making cuts and limping along is not what I want to go through this effort for,” Koivisto said.
Superintendent Brian Masterson suggested the board request a menu of options from Ehlers that includes a variety of operating referendum and capital projects levy scenarios and their resulting budget outlooks.
Johnson said ISD 2142 is one of just 25% of school districts statewide that does not have a voter-approved operating referendum, and it never has had one throughout her 20 years with the district.
The potential operating levy and capital project levy represent one of the district’s biggest financial opportunities since voters approved a $78 million school construction bond referendum in 2009.
“This is a big deal,” Johnson said.
