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Brainerd School Board: Board sets preliminary levy at maximum amount

The Brainerd School Board Wednesday set the district's 2018 preliminary levy at the maximum amount allowed by state statute. The preliminary tax levy is proposed to be $19,504,672, an increase of $538,321, or 2.8 percent, over the 2017 tax levy. ...

Brainerd School District Director of Business Services Steve Lund Wednesday presents information on the preliminary tax levy at a special all-day school board meeting in front of board members and staff.Jennifer Stockinger/Brainerd Dispatch
Brainerd School District Director of Business Services Steve Lund Wednesday presents information on the preliminary tax levy at a special all-day school board meeting in front of board members and staff. Jennifer Stockinger/Brainerd Dispatch

The Brainerd School Board Wednesday set the district's 2018 preliminary levy at the maximum amount allowed by state statute.

The preliminary tax levy is proposed to be $19,504,672, an increase of $538,321, or 2.8 percent, over the 2017 tax levy.

Steve Lund, director of business services for the school district, presented information on the preliminary tax levy at a special all-day school board meeting in front of board members and staff. Lund said board members can decrease the preliminary levy they set, but they cannot increase it when they vote on the final levy in December. The school tax levy is based on calculations completed by the Minnesota Department of Education, which administers the funding formulas governed by state statutes. The state formula for revenue is based on per pupil unit.

The district's property tax levy for 2018 is determined by an increase in the school enrollment for 2018-19, projected at 6,608 average daily membership and resident pupil unit count, compared to 6,571 in 2017-18.

A school district levy is different than a city or county levy. A city or county sets a budget and then determines a levy; the school district operates just the opposite. The school district sets a levy, then builds a budget. The preliminary levy is based on revenue for the 2018-19 school year.

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The district operates a combined fund budget of $96.6 million and generates about $19.6 million in proposed local property tax levy. The tax levy only accounts for about 20 percent of the district's combined fund annual budget, Lund stated in his tax levy presentation.

Lund said the proposed 2018 local property tax levy increase of 2.8 percent only represents about .5 percent of the overall combined funds budget of the school district.

Of the preliminary $19,504,672 tax levy, $10,131,950 is the general fund levy, $570,150 is the community education tax levy and $8,802,571 is the debt service tax levy fund.

Lund said there was a reduction in the debt service fund, which continues to keep a reserve balance. Lund said the debt service is about $200,000 higher than normal. This is proceeds from a 2013 Lowell Elementary School indoor air quality project, which has not yet occurred. In April, the board approved to transfer the funds to a different fund and to be included in the debt excess calculation in lowering the levy amount, Lund stated.

"Since 2004, taxable market value for the school district has increased by a total of 39 percent, whereas the state has seen a total increase of 46 percent for the same time period, resulting in an average annual increase that is about 0.5 percent less than the state average," Lund stated in his presentation. "Beyond this, the property tax laws then exclude certain classification of property for certain levies. The largest of these exclusions are properties that a classified as agricultural and seasonal recreational."

The market value for the school district in 2016 was $5,064,962,160, compared to $630,670,000,000 for districts statewide. Ten years earlier, the market value in the Brainerd School District was $4,691,785,416.

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