District says restructuring payments could offset tax burden
Voters in the Osseo School District narrowly rejected a technology levy in November, but the school board may add a tech levy next year without a vote of taxpayers.
The district says, however, that taxpayers wouldn’t shoulder an increase in what they pay under a plan to offset the levy by shifting revenue streams from another area.
At a school board work session Jan. 19, staff recommended the board seek authority from the Minnesota Department of Education to collect $1.5 million in the form of an integration levy from taxpayers for technology beginning in 2014 in order to increase equality across the district.
Specifically, it would help the district make progress toward more evenly distributing technology resources across all campuses and meeting its own minimum standards in all buildings.
“These dollars would potentially help us to address some of the equity there,” Chief Technology Officer Tim Wilson said.
The levy would be much less than the $5 million requested on the ballot last fall, and staff doesn’t expect it to cover all the technology needs.
“It will help a little,” Assistant Supt. Kim Riesgraf said.
The district is eligible to institute the tech levy because it receives integration revenue based on the percentage of students of color in the district.
In order to add the levy, the district must update the integration plan it submits to the Minnesota Department of Education and receive approval. The updated version must include a plan for “equal access to technology for integration.” The board must submit the plan before the end of March. If the state approves, the district technology levy will be included in calculations when the board considers its 2014 preliminary levy in September.
Benusa doesn’t expect the levy to make a big difference on tax bills if the school district “restructures” how it pays for routine facility and equipment maintenance and replacement.
What does that mean? The simple answer is the district will pay for more of the maintenance with debt than it does now. The district uses a combination of bonds and “pay-as-you-go” levies, which are levies that collect only the money needed for specific projects. If the district lowers its pay-as-you-go levies by $1.5 million and instead issues bonds for that amount, it should allow the overall expenditure to remain approximately flat.
Riesgraf said the district currently has much less debt than similar districts. But the plan doesn’t necessarily mean current debt payments will go up, either. Interest rates are low, and the district frequently refinances to take advantage of the rates. Less interest paid would mean more dollars in the district’s coffers.
But it’s more complicated than that.
Riesgraf said the district considers other factors. For example, interest rates and project costs are low now. As the economy improves, those rates and costs are expected to increase. By completing a project now, the district could save money in the long- run, even if it has to issue bonds for the money. And that’s just one of many factors in the big picture.
“We’re always looking to balance revenue options to make sure we can minimize tax impact … to make it as flat as possible over time,” Riesgraf said.
At the Jan. 29 work session, school board members seemed concerned about technology inequities in the district, and they unanimously supported moving forward with getting the department of education’s approval for the levy.