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Homeowners see reduction in school taxes


Fri, May 2nd, 2014
Posted in Peterson Commentary

Homeowners of the Rushford-Peterson School District should find a pleasant surprise when they open their 2014 Property Tax Statements. They will see a reduction in school taxes due to equalization enacted by the legislature last year. A homeowner with a property valued at $150,000 is expected to see taxes go down by about $45.

Minnesota has a 40-year history of equalizing property taxes for educating children. Equalization means that for a certain level of dollars to educate a child, taxpayers pay the same percentage of home value statewide up to a certain home value—the equalization factor. In other words, regardless of zip code, children get the same opportunity to learn, and taxpayers pay the same percentage of home value in property taxes.

Chuck Ehler, Superintendent of R-P Schools shares his perspective on this good news, “We are pleased to see our legislators address the inequities in school funding that have evolved our the last few years. It is always exciting to see our legislators respond in a positive manner to requests being made by school administrators and school board members.”

The equalization factor had not changed in the state in over a decade, while voter approved operating referendum dollar amounts had more than doubled. The result was increasing taxpayer inequity. “Poorer valued communities were paying a higher percentage of home value to provide the same dollars per child to educate the children of the community, than wealthier communities,” said Fred Nolan, executive director of MREA, a statewide educational association representing nearly 180 Greater Minnesota school districts.

The 2013 legislature addressed this by equalizing the first $300 of operating referendum revenue per child at $880,000 of Referendum Market Value (RMV) per pupil. That is a 72 percent increase over the previous highest level of equalization factor.

Senator Rod Skoe led the Senate Tax Committee to devote $60 million of state revenue to this effort to equalize the tax effort of homeowners across Minnesota. Much of that tax equalization was spread across rural Minnesota.

“This marked the single largest advance in education funding equity in Minnesota in a decade,” Fred Nolan, MREA Executive Director said. “This will narrow the fifth to 95th gap to its smallest since 2003.”

While most of the funding for educating children comes right from state income and sales taxes, the Rushford-Peterson School Board is most appreciative of our voter support for voter approved referendum that is critical to providing our quality education. As a result of the actions of the 2013 legislature, our total district property taxes dropped $68,313 and was replaced with state aid. That is the reason you should see a reduction in your school property taxes.

The system is not perfect. If you had an increase in home or land value, you will probably see a tax increase. Property taxes are a percent of the value of property, not a percentage of income.

MREA is the only advocate exclusively for Greater Minnesota schools. Under the leadership of school board members, administrators, teachers and community members, MREA focuses on what puts the education, growth, and development of learners first to bring about our best possible future. Learn more at MnREA.org.

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