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Resource: Understanding Property Tax Levies

The Minneapolis Public Schools District has recently updated its website with a variety of resources to help residents understand school finance.

With the Minneapolis Public Schools District facing a $25 million shorfall in the next school year, the finance department presented a preliminary budget proposal March 15.

Among the changes called for in the proposal was the cutting of 50 staff members at the central office, the addition or 12 English as a Second Language teachers, reduction of full-day kindergarden at some schools and the shifting of funds between different accounts.

What do you think of the budget proposal? Take the district's survey.

The following information was provided on the school district's website, and details how property tax levies are used:

(The information in its entirety has also been attached as a PDF to this article.)

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Understanding Property Tax Levies (Updated 3-21-13)

Property taxes include taxes to support the school district, the city and the county. Property tax levies are one source of funding for Minneapolis Public Schools.

There are two kinds of levies:

1. A referendum, or voter-approved levy

2. A levy set by the Board of Education within limits established by the state School levies are based on a number of factors that include property values, the number of students enrolled in the school district, the state’s match for the levy and the total amount of state aid.

Levies are used for debt service – that is, expenses related to state-authorized capital borrowing. Levies are also used to finance ongoing operational expenses. School levies make up only a portion of the total MPS budget. In school year 2013-2014, about 19.3 percent of the general fund revenue came from levies. Increases in levies do not translate to an increase in the overall budget.

The school district receives levy payments in May and October each year. Payments made in May and October of 2013 will be used for the 2013-2014 school year.

Education Levy and Overall Property Taxes

Over the past decade, the state of Minnesota has significantly shifted the obligation of funding public education from state aid to property taxes. This led to a total statewide property tax increase of nearly $3 billion between 2002 and 2011.

The school district levies for a fixed amount of money. This amount is spread across the real estate in the city. The tax on a particular property changes if the value of the individual property changes or if the mix of commercial and residential property values changes.

The school district’s levy authority can change from year to year based on:

  • The number of school age children in Minneapolis
  • An inflation formula built into the referendum
  • Formula adjustments calculated by the Minnesota Department of Education.

We know that Minneapolis taxpayers have seen their property taxes rise over the past several years. We must always balance the financial needs of the school district with an understanding of the burden on taxpayers. The school district has levied less than our full authority for the past two years.

Pay 2011 Pay 2012 Pay 2013 Total 163,857,533.32 165,727,460.70 172,356,558.00

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More resources:

  • Where Does Minneapolis Get its Public School Funds?
  • Resource: What is a District's 'General Fund' Balance?
  • Resource: Minneapolis Schools Budget Challenges and Risks

Other related articles:

  • Why Is the School District Drastically Cutting Local School Budgets?
  • What Could Your School Lose?
  • Parents Ring Alarm Bells Over "Catastrophic" Schools Cuts

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