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Farmington school district to raise taxes in 2017

Hold onto your wallets property owners. Not only did Farmington's city council vote earlier this month to raise taxes almost five percent, the Farmington School District voted Monday to raise its proposed tax levy 5.46 percent.

In 2016, the Farmington school district levied $23.8 million in property taxes. The proposed tax levy for 2017 is currently $25.1 million, an increase of $1.3 million.

The board approved the maximum levy at Monday's meeting. Districts typically vote to preliminarily approve the maximum levy, in case the Minnesota Department of Education changes the levy amount before the end of the year.

The specific figure won't be set until December and may end up being less, said board member Laura Beem.

At the same meeting, the school board approved giving district directors a two percent raise for the next two school years. They also refinanced some bonds, which should save the district $784,000 in future debt service payments over the next four years.

Who's to blame for the tax levy increase? The district says it's the state's fault.

"We don't really set our rates," Superintendent Jay Haugen said. "The state tells us what they're going to be."

To illustrate, financial director Jane Houska pulled out a 38-page document typed in small print that covered the pages from top to bottom. She explained that this is the formula that the state uses to determine how much revenue the district gets every year, and that it is a amount that is always changing due to enrollment, staff hires, special education needs, and other variables.

"Our expenditures are not tied to our revenues," Haugen explained. "We hear from the state what we're going to get and have to adjust our budget accordingly."

He said this is how schools differ from cities, who set their own budgets and then raise taxes, if necessary, to cover the expenditures.

Relying on the state to set the district's revenue puts the district at the mercy of whatever funding the state is able to dole out in a given year. If it's not enough, the school district can go to the voters for more, as Farmington did in 2015, to be able to pay for building maintenance that had been put off for years.

The state, in an effort to give the districts a more consistent stream of funding, made changes in 2013 that gave districts the power to convert up to $724 per pupil of existing tax levies from voters' approval to school board members' control.

In districts with no voter-approved property tax, like Farmington, school board members can levy up to $300 per pupil without a vote by residents.

These tax conversions typically don't cost property owners more money, but when levies come up for renewal, voters now have a say over only part of the tax amount that they used to control.