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School Board Approves Final Property-Tax Levy

Taxes come in lower than expected.

After a presentation by Finance Director Aaron Bushberger, the District 833 School Board unanimously approved its 2012 property-tax levy in swift fashion Dec. 15.

The levy, which has been discussed at length by the board over the past months, is a 0.5 percent reduction over last year’s levy. 

The proposed amount that was mailed out to taxpayers at the end of last month was $53,580,298, but the final amount came in about $155,000 lower due to the fact the Minnesota Department of Education had a slightly lower property tax calculation than the district.

Since it’s lower and to our advantage, we’re going to be going with that number,” Bushberger said.

Before the approval of the levy, board member Ron Kath lauded Bushbeger for the work he and other finance department staff have put into crafting the 2012 budget.

“Thank you Aaron for your hard work in bringing us forward,” he said. “I know it takes three or four months (to finalize the budget) and let the voters know that we came in less than what we thought a month or so ago—that’s really good news.”

Tax Implications

Though this year’s proposed property-tax levy is a decrease from last year’s, taxpayers in District 833 might not see an overall decrease in their taxes because of the state Legislature’s decision to repeal the Market Value Homestead Credit program and replace it with a Market Value Homestead Exclusion.

The homestead credit provided property-tax relief on homeowners’ primary residences, while the state reimbursed that amount to cities to make up the difference in their levies, according to the League of Minnesota Cities.

Under the exclusion program, homes and businesses will be taxed based on their respective market values.

Homes valued at $76,000 or less are eligible for the maximum exclusion, which means 40 percent of the value of those homes will be exempt from taxation under the new program. Homes over $413,000 are not eligible for the exclusion.

The exclusion percentage lessens the closer a home value gets to $413,000.

By eliminating the credit, the state was able to save roughly $260 million each year, according to the Minnesota state tax website. It was one cost-saving measure the state used to close the $5 billion two-year state budget deficit.

As a result of the exclusion, the tax base for school districts, cities and counties shrinks, which, in many cases, is leading to higher property taxes in the commercial/industrial sector in more rural communities, and many homeowners will see a rise in overall property taxes.

“Impact will vary widely across the state, but the overall impact of the shift is it increases property taxes for almost all those involved,” Bushberger said.

In District 833, the exclusion is reducing the tax base by 4.73 percent, according Bushberger, which is nearly identical to the state average for school districts.

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