to answer questions about the school referendum authorization which will
appear on the Ballot in November.
Disclosure: I've supported every pro-public school choice that's ever
appeared on any ballot. I actually was about 50% sure I still had a lawn
sign on this referendum from 1994 or there-abouts.
While I can usually hear most of what's said at Stone Arch, someone had
changed the room and I hardly got half of it. I get 100% on the internet,
so I sent my questions to Jenny Arneson and Rebecca Gagnon (Board Member at
Large) to get it right. Both ladies took the time to send me their
answers, which I'll meld below.
Briefest recap I can muster: This a renewal of an existing referendum.
Your property taxes will NOT go up with the referendum because you are
already paying this. (Renters: it affects your rent bill exactly the same
way.) It's needed because the state payment per pupil has not kept up with
either inflation or the rising costs of providing kids with the services
they need to be prepared for their futures. Case in point: kids need to
know how to use computers, which they can't learn from a book and which
didn't exist when I went to school. The referendum money is used for
teacher and support staff positions. It comprises 13% of the MPS 2016/17
budget.
My questions:
1) Why has the leg. not simply increased the revenue per pupil to cover
this 13% gap in funding? Would it be reasonable to just remove education
funding from property taxes and make it a permanent line item?
Arneson: There are risks with that proposal: if property tax revenue went
away without another mandated fund source, schools would be very
vulnerable. She is unwilling to take that risk.
Gagnon: Polls show public support for the legislature to allow board
renewal of existing referendums; so far, the leg. is not moving to enact this.
Voter support would help the School Board get a stable and sustainable
fund stream, to support 13% of the budget.
ME: actually, they are talking about different facets of this question.
Looks like something that needs more public airing.
2) Please restate how much money MPS lost when Pawlenty borrowed from the
school fund to balance the state budget. If that was repaid with a
reasonable rate of interest (or even adjusted for inflation), what would
MPS reap and what would that cover? How did MPD cover the deficit? What
got cut?
Arneson: Pawlenty delayed payment from the front end of one FY to the start
of the next. Minneapolis had enough in its reserve to cover the gap (not
all districts had that). This meant that the first "investment" from the
new governor and legislature was actually payback, not new investment
money. What had a larger impact is that payment from state and federal
governments have not kept up with inflation. If they had, MPS would
begetting $20 million more each year since the last referendum (8 years
ago).
Governor Ventura tried to uncouple education funding from homestead
property tax by basing it on business property tax and state dollars
collected from income and sales taxes. The problem that arose is that these
are much more volatile and fell during the recession. The legislature
shifted education funding back to homestead property tax. Recovery is not
yet complete.
There are also unfunded special education costs, which run to $50 Million a
year for English Language Learners programs and other special education.
Additionally MPS pays for 90% of special education costs for charter school
students; last year the bill was $23 million. The theory is that MPS will
be reimbursed by the state. The fact is that MPS does not get full
reimbursement.
Gagnon: [About Pawlenty's shift]: the shift is just paying us tomorrow for
services we must provide and pay for today. That requires MPS (and other
districts) to borrow operating funds, which costs interest (which is NOT
repaid by the state) and/or to use reserves. Using reserves negatively
impacts the MPS bond rating and limits long-term capital planning. There
was a decrease of about $1300/pupil because inflation was not figured in.
3) There was a chart which I didn't understand at all, and this may well be
where my inability to hear Jenny got me stuck. The chart shows that
passing the referendum will not raise the school support line of your
property tax, because, as both MPS Board members assured me, the
Minneapolis tax base has grown because of growth in population and
business. This will, by itself, lower Individual property taxes. During
periods of economic expansion, there are more properties and more
expensive properties to tax. Consequently the individual's bill goes down
because more people are paying in, or are paying at a higher rate than
before because their property values have gone up.
So: If your property value stays the same, it is projected that your $100K
valued house, which now pays $126 to support the current referendum, will
be taxed at $116 if the referendum gets renewed. A median value SFD house
at $205K will see that line of their tax bill go down by $20. If you have
substantially raised the value of you house, a different rate will apply
because you now own a house of greater value.
Other items that appear on your property tax bill may go up or down, but
the school portion should behave as I've tried to explain. Sorry: I liked
math in college and aced trig. This chart is difficult for me, and I don't
really think it's me.
Both MPS Board members assured me that the Minneapolis tax base has grown
because of growth in population and business. Individual property taxes go
down during periods of economic expansion because there are more
properties and more expensive properties to tax.
FFI: contact your MPS School Board representative.