Grand Forks residents criticize School Board for proposed 28 percent property tax hikeGrand Forks resident James Swedberg said he found it hard to hear that he was going to get property tax relief from the state only to have the School Board take it away.
By: Jennifer Johnson, Grand Forks Herald
Grand Forks resident James Swedberg said he found it hard to hear that he was going to get property tax relief from the state only to have the School Board take it away.
Swedberg was one of at least 40 residents who packed the Mark Sanford Education Center on Monday for a public hearing over the School Board’s proposal to increase the property tax levy by 28.6 percent, despite a recent state tax buydown.
“I don’t know if you know what an ordinary homeowner goes through,” Swedberg said.
One by one, residents rose to speak before the School Board, many openly angry over what they said was a lack of financial transparency and a slap in the face to legislators by proposing the increase.
State legislators approved a 50-mill state-funded reduction of the district’s mill levy for this year. The district’s tax increase would increase the levy from what the state reduced it to, but keep it lower than last year’s levy. The result would be a net tax reduction, school officials said last week.
A mill, which is equal to a 10th of a cent, is used to determine property taxes.
Some 662 property owners recently received a letter telling them a public hearing would be held Monday to discuss the proposed increase.
The owner of a $165,195 home, the average value in the district, would see a $208.91 savings in 2014 compared to 2013, according to the letter.
The district proposed the tax hike after estimating they had a nearly $6 million budget deficit.
Several people Monday suggested the district stop construction of the $15 million new elementary school on the city’s far south end. Grand Forks City Council member Doug Christensen said they should wait for another three or four years to “let the growth you think will occur actually occur” and use north-end schools.
“Spend more time studying alternatives to not raise the mills,” he said.
For several months, school officials have said reduced federal funding for military families, lack of state aid coverage for new students and additional staff hires have contributed to the deficit. But several residents questioned whether school officials were giving accurate information and disputed the reasoning they offered, especially since the formula for calculating finances changed in 2009.
“All I see from that is that (Superintendent Larry) Nybladh and this board has known since 2009 that there was a financial problem,” said Dana Sande, also a City Council member. “And you waited four years and have done nothing about it.”
Resident Doug Carpenter said if it’s true the district has gained about 230 students and hired 14 staff, he estimates that amounts to around $900,000 in additional expenses.
“But this budget year, you’re going to collect over $8,000 for each one of those students,” he said. “It’s $1.7 million dollars which not only covers staff hired last year, but gives you almost $1 million toward projected increases this year. Where’s the problem? Something else must be going on.”
District officials said they expected to gain about 300 students next year who will not be covered by additional state aid.
Some residents noted recent additions to district schools, which included a 700-plus seat performance hall that was part of an $8.7 million addition to Red River High School. Although district officials say the funding came from the building fund, not the general fund, taxpayers look at it in terms of total tax, said Carpenter.
“To say (it’s just one fund) is misleading, if not deceptive,” he said.
The general fund is the main operational fund for the district. Each fund is intended to be used for specific activities, and the district follows the guidelines in the North Dakota School District Accounting and Reporting Manual, said Business Manager Vicky Schwartz in an email to the Herald earlier Monday.
The general fund is designated as the general operating fund for the district and accounts for all financial resources except those required to be accounted for in another fund, according to the manual.
The district’s building fund, for instance, can only be used for projects such as the new elementary school. The most common way this is funded is through the sale of bonds and special building and special assessment levies, according to the manual.
Levy cap in 2015?
Grand Forks is one of three districts in North Dakota that has unlimited mill levy authority, which means it is not required to reduce its levy as other districts are, but that’s up for renewal in 2015. A general election vote will be held to determine any levy cap.
Several people were upset by the school officials saying the district was reducing taxes. Sande said he would have been fine with the increase if he was told the funding would help provide a better education for students.
He said the district has money, such as in the building fund, that could be tapped without raising taxes.
“You are not lowering anyone’s taxes and you’re doing it with my money,” he said.
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