Can you afford the Pelican Rapids School District’s Operating Tax Levy?
By Faye Enkger
There has been some confusion regarding the tax levies (referendums) presented
by the school district in the past couple of years.
First, there are basically three main classifications of taxpayers:
Seasonal Residential Recreational, Homestead, or Agriculture-Homestead.
A Seasonal Residential taxpayer does not pay for Operational Tax Levies but they
do pay an additional state general tax on top of the normal taxes. This was a
“trade off” under the Ventura Administration for not paying Operating Tax
Levies. Seasonal Residents have no
voting privileges. Ag-Homestead has
restricted qualifications and a percentage of land has to be farmed.
Only Homestead (residents) and Ag-Homestead taxpayer’s are allowed to”
vote” for local tax levies. These taxpayers pay for Operating Tax Levies.
All classifications of taxpayers pay for bond referendums which includes
new schools or building construction. The vote the PR school district attempted
last November 2008, and is planning to put on the ballot again this November
2009, is an Operating Tax Levy.
The State finances public education through a foundation aid formula which is
linked to enrollment. Revenue resources equals 82% state, 7% local property tax
levies, 6% federal, 4 % county, and 1% sales.
In 2006 taxpayers were asked to vote on
a bond referendum for a new school for approximately $33 million. This tax levy
was defeated, and the school board released the Superintendant for undisclosed
reasons. Deb Wanek was hired as the new Superintendant.
Roger Worner Associates, Inc. was hired to prepare an Organizational
Analysis Study for the school district for the evaluation of the declining
enrollment, the uncharacteristically large volume of student out-migration,
declining revenue, absence of an Operating Tax Levy, facility inadequacies,
failure of the school district to achieve Adequate Yearly Progress (AYP) as
mandated, and a reduced commitment on the part of parents/patrons to enroll
their children in the district.
The average educational cost per pupil in PR was $7500 with 993 students K-12
in PR in 2007-2008. PR was
found above average in cost per pupil. In findings, the Worner report classifies
the district as a “substantially greater property”- wealth per student more than
average with a ten year teacher loss of 0.0% and no bond indebtedness. It is a
well managed low-spending school district, and the report profiles the district
as a Declining Student Enrollment Educational Organization. The Worner report
concluded in 2007-2008 the school district gained 24 non-resident students from
other districts, but lost 180 resident students, including 35 students to be
home schooled. The net loss to the district was $800,000 to $900,000 in per
pupil state aid. The report states that over a 15 year span 1996-2012 actual and
projected enrollment will decrease by 543 students, or 38.6 %.
The report also concludes it is improbable the school district’s
enrollment decline will be alleviated through general population. The PR
Comprehensive Housing Study states PR has an older than average population and
for the population to increase it will require in-migration from domestic or
international locations, continuing the trend that has existed since 1990, with
87 more households needed by 2015.
In November 2008 the voters were presented with an Operating Tax Levy for $ 1.2
million. This request was for $1100 additional funding per pupil due to
deteriorating financial conditions as a result of declining student enrollment
and inadequate government funding.
The Worner report states that the school district’s General Fund revenue
increased 7.1 % and the General Fund expenditures increased 7.9%, noting the
largest gain in expenditures was for Special Education instruction (108.0%) and
support services (117.1%).
The November 2008 Operating Tax Levy was defeated:
2076 NO votes to 1932 YES votes.
About 3/4 of Pelican Rapids supported the levy while in Dunn Township it
was 438 NO votes to 141 YES votes and Scambler Township had 184 NO votes to 137
YES votes. Under this Operational Tax
Levy, Homestead-Ag would only be taxed on one acre of land.
If you own land that does not qualify for Agriculture Homestead, all of
your land would be taxed at the same rate as the Homestead classification per
Otter Tail County. This Operational
Tax Levy or as it is referred by Pelican Rapids as a “Learning Levy”, would have
been in place for ten years.
Since the November 2008 Operating Tax Levy failed, Superintendant Wanek stated
there are only three options for the district:
1. Cut $1.2 million, 2. No cuts and force the school into SOD (Statutory
Operating Debt), or 3. Make cuts, spend down their fund balance and prepare to
go into SOD until another Operating Levy can be voted on.
Levies can be on the ballot once a year, but if the district is in SOD
they can be voted on twice a year. If cuts are not made, in 2010 the district
will finished with a deficit of $100,000and officially be in SOD.
As reported by the Pelican Press, the
school district has cut $1.5 million over the past six years. The current fund
balance stands just over $1 million with $607,371 set aside for retired
teacher’s severance. As reported by
the Press after spending the remaining reserve in 2010, the deficit will
increase to $1.6 million by 2011 and $3.7 million by 2012 unless the school
makes cuts and/or changes.
Ottertail County reports the total 2009 gross levy for the school district is
$997,195.59. Of this amount, Dunn Township contributes 34.23 % and Scambler
Township contributes 11.68% for a combined total of 45.91%.
Superintendant Wanek states other possibilities are being considered to cover
the funding shortfalls: grants,
foundations, donations, and state options that may be available. Recommendations
from the Worner report include: institute a substantive reduction of at least
$500,000 to the General Fund, prepare for and conduct a significant Operating
Tax Levy, prepare for and conduct a future school bond referendum to construct a
new PR High School, engage in services for financial advice, make a Joint Powers
Agreement with the City of PR for funding the Communities Summer Recreation
Programs and consolidate all Community Education Services under one
Administrator, undertake a survey
of interest for a fee-based school-aged child care program, commission a task
force of realtors and developers to develop a plan or options for the sale or
disposal of a (future) vacated PR High School, engage a 3rd party to
guide leadership in the development of an Strategic Plan, and further halt, and
if possible, reclaim resident students who may have already out-migrated to
other schools. As reported in the
Pelican Press 3-11-2009, Wanek states she will recommend spending down the
reserves and cut $600,000 from the budget this spring.
In other news: The Pelican Press reports that
the school board is frustrated that the district(s) can only tax half of
the property values and considers this a “disadvantage” due to lake areas in
their districts .
In a personal email, Rep. Bud Nornes states there has already been discussion
with the district on this issue with further comment that the Tax Committee will
seriously look at repealing the law that exempted seasonal property. However,
Rep. Nornes stated, “any bill with tax increases will make it very difficult to
get the Governor to sign and more likely will be vetoed” at this time. As
reported in the Associated Press and Fargo Forum, Pelican Rapids is not the only
school district in need of cut backs. Many other school districts, large and
small, are currently facing budget cuts in their districts. As reported in the
Fargo Forum (3-12-2009) “Cabin owners are the only group of property owners who
have not received a property tax break since 2001, and notes that the average
income for cabin owners is $ 63,000.00 a year”.
As reported by the Press, Superintendant Wanek has stated that the school is
committed to maintaining its “quality” by “doing whatever it takes, even deficit
spending”, and has repeatedly reassured the district that the school will not
close. The district states that
they are “confident” that the Operational Tax Levy will pass this coming
November 2009. Superintendant Wanek
has also stated publicly that after an Operating Tax Levy is in place, the next
step will be a new school.
Please stay informed, attend meetings, and vote in November.
Faye Engkjer:
Spitz@cableone.net
All content comes directly from The Pelican Press Paper (no website), school
mailings, meetings, and the official website of the School District
http://pelicanrapids.mn.schoolwebpages.com/education/district/district.php?sectiondetailid=1
(Worner Report), the Fargo Forum, and
Otter Tail County (OTC).
To read the full Worner report, click below.
http://pelicanrapids.mn.schoolwebpages.com/education/components/docmgr/default.php?sectiondetailid=3215&fileitem=85&catfilter=ALL