Thanks to legislation passed this year, the Ely School District stands to collect just over $325,000 in additional revenue - with no impact on local property taxes.
But first voters have to say “yes.”
That’s the bottom line after the Minnesota Legislature, at the behest of State Sen. Grant Hauschild (D-Hermantown) and State Rep. Roger Skraba (R-Ely) -approved a measure designed to help districts with vast amounts of seasonal recreational property.
But tapping into that revenue requires a convoluted process that, for Ely, would require a voter-approved referendum in November.
School board members took the first steps toward a Nov. 3 vote this week, gathering input from school financiers and looking at how the district could best capture the additional money.
Outgoing board member Tony Colarich sought a simplified explanation for an appeal to Ely voters, and district finance manager Jordan Huntbatch provided it.
“The main piece of information we need to push out and tell our community and our taxpayers is there will be no change in taxes,” said Huntbatch. “There will be a zero dollar tax impact but the school will receive $325,000 more in revenue.”
Superintendent Anne Oelke agreed and said the push toward a fall vote is the culmination of years of waiting for action on the seasonal recreational issues.
“We’ve been talking about it for several years now,” said Oelke. “And it finally did pass. We’ve been waiting for this for a long time and this is the next step. It passed and gave us a huge advantage to use that aid, to increase our operating per pupil revenue at no additional tax impact.”
The state passed legislation to aid districts such as Ely, which struggle to collect additional revenue from taxpayers because so much property is designated as seasonal recreational. Those properties don’t figure into operating levies passed in local school districts.
Representatives from Ehlers, Inc., a school financial advising firm, indicated that no property owners will be hit with tax hikes as a result of the legislation and instead “state funding will essentially replace what you would receive from seasonal recreational taxes.”
In order to capture the new revenue, the district must raise its current operating levy from $347.99 per pupil to $1,775, and then reduce its current local optional revenue levy.
The net result would be no increase in local taxes and new revenue to the tune of $325,698.
If the referendum were to fail, the district would retain its current operating and local optional levies, but would not be able to capture any new revenue.
Board members agreed Monday that communication would be key over the course of the next several months.
The neutral impact on property taxes is the key driver, according to Oelke.
“That’s the story we have to sell to everybody and have opportunities for people with community meetings and stuff to see the information,” said Oelke. “We’re going to push out visuals that people can look at and relate to.”
Board chairperson Rochelle Sjoberg said the push toward a referendum in November is also coming from the district’s finance committee, which has wrestled with budget reductions for several years as the result of declining enrollment and rising costs.
“It can help the district financially,” said Sjoberg. “For the board to really process this, there is no financial impact on the taxpayers and we appreciate the amount of work done by several of our legislators moving this forward.”
