By Anna Jauhola
About 20 people attended a public meeting on Thursday, Oct. 1 to hear more about the Lancaster School District’s decision to present the voters with a new levy on the November ballot.
The school board voted in August to place the following question on the ballot:
“The board of Independent School District No. 356 (Lancaster) has proposed a capital project levy authorization in the amount of 9.459 percent times the net tax capacity of the school district. The money raised by the capital project levy authorization will be used to cover costs related to the purchase, replacement, support and maintenance of technology and curricular materials, building maintenance and the purchase and replacement of transportation vehicles and related equipment. The proposed capital project levy authorization will raise approximately $150,000 for taxes payable in 2021, the first year it is to be levied, and would be authorized for 10 years. The amount of the capital project levy proposed in this question may be offset by the reduction of the referendum revenue authorization that is scheduled to expire. The estimated total cost of the projects to be funded over that time period is approximately $1,500,000. Shall the capital project levy authorization proposed by the board of Independent School District No. 356 be approved?”
Should the voters cast their ballots in favor of the capital project levy, it will replace an expiring operating revenue levy that was approved in 2010. The operating levy brought in approximately $159,000 annually, which went primarily to paying salaries, said Superintendent Shannon Hunstad. While that levy will go away regardless, the school has two other operating revenue levies still in effect through 2025 and 2027.
A capital project levy is meant to even out the taxpayer burden, but the district is restricted to using those funds for specific purposes rather than general operations, Hunstad said.
“Our goal is to spread this across all property types,” Hunstad said. “Ag land and seasonal property is exempt from the operating referendum. It’s not exempt from the capital project levy. So that’s the impact it’s going to have on farmers.”
Currently, with the operational levies, homeowners are paying an average of $1,485 in annual taxes on a $100,000 home. Agricultural landowners pay 76 cents per acre on property valued at $2,000.
Should the ballot measure pass, homeowners’ taxes will drop by $284 on a $100,000 home and commercial property taxes will also drop by $211 on a location valued at $100,000.
Agricultural homesteads, agricultural non-homesteads and seasonal recreational residential are not taxed under operational revenue levies. However, under a capital project levy, ag homesteads and non-homesteads plus land and buildings are taxed per acre. For example, an ag homestead valued at $2,000 will be taxed 95 cents per acre and an ag non-homestead valued the same will be taxed $1.89 per acre. A seasonal recreational cabin valued at $70,000 will be taxed $66 per year.
“People who have millions of dollars in ag land will be majorly affected,” Hunstad said, noting that for many years the homeowners have been highly affected by the operating levies.
He also said the board discussed at length how farmers and ag land owners would be affected and decided the capital levy would provide some relief to the highly taxed homeowners for a while.
Only a couple of people from the public spoke up at the meeting. Randy Nordin said he pays four and a half times more property tax on his home in Lancaster than he does on his farm land.
Lee Pemberton said the capital project levy will double his ag land taxes.
“I don’t see that as being even,” Pemberton said.
Hunstad countered by reminding him agricultural land owners do not pay any taxes under the current operating levies, which puts a huge burden on the homeowners within the district. Pemberton asked whether the district receives any tax dollars from the state for the huge amount of state-owned land in the district.
Hunstad said that land is the lowest classified state land in Minnesota and the district does not receive much revenue from it.
Pemberton also asked if agricultural land were to be reassessed and the value were determined to be higher, would the school district then collect more money than the proposed $150,000 per year. Hunstad said the capital project levy collects taxes based on the net tax capacity, which means if land is valued higher, the district would collect the corresponding amount per acre.
The district held two more public meetings prior to press time on Monday, Oct. 5 and Wednesday, Oct. 7. The vote is now in the hands of the voters, and they are more than welcome to contact Hunstad with questions as they decide their votes.
Ballots have already been mailed to constituents in the Lancaster School District, which must be mailed in by Nov. 3.
By Anna Jauhola