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Politics & Government

District 199 Board Approves 3.9 Percent Levy Increases

The homestead credit shift accounts for a large portion of the levy increase for next school year.

The Inver Grove Heights Community Schools School Board unanimously approved the Levy Limit and Certification at the Dec. 19 meeting.

The total levy is set to increase by 3.4 percent from $11.6 million to $12 million for fiscal year 2013 for the district. "The levy is our tax dollars used to support our expenditures," said Business Manager Bruce Rimstad.

One of the levy increases is a $226,412 growth in the Health and Safety fund for "state-approved capital projects related to facility health and safety needs," according to Rimstad’s Truth in Taxation presentation. HVAC work done at Hilltop Elementary and Simley High schools will increase the line item. In previous years there was a nearly $47,000 decrease in the Health and Safety category which will help offset the increase.

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Rimstad said one of the biggest reasons for the change from 2011 to 2012 is the state legislatures’ repeal of the homestead credit shift. Under the new law, the tax capacity on residential homes valued at $413,000 or less is reduced – which reduces the total tax base for political subdivision affecting all property taxes. The shift creates an increase in property taxes.

There are three common reasons taxes will increase in 2012: the state is saving about $260 million by no longer reducing local taxes through the tax credit so the entire levy is paid by taxpayers; a reduction in taxable value increases tax rates because the total value is reduced by the exclusion a higher property tax is required to raise the same total levy; and the exclusion gives less benefits in low-rate take areas than the credit.

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"For a $200,000 home, the levy went up automatically by $24 without anything the district did," Rimstad said. "People received an automatic tax increase from something the state legislature did – not something district."

Other significant factors in change include changes in individual property value, changes in total value property within the district and increases or decreases in levies caused by state funding formulas and other governmental actions.

Overall, the community service fund levy increased by 17.1 percent from $429,094 to $502,333. Community Education funds provide after-school education programs, adult and student activities and Early Childhood Family Education programs. The increase is driven largely by a projected preschool-population growth and the expanding number of school-age child care qualifications.

Within the General Fund is the Equity levy – where funding is based on a state formula in relation to the district enrollment – and next year that levy will decrease by $115,883. Additionally, because the district will have fewer contracted lease purchase obligations for instructional space the Instructional Lease levy will decrease by $70,016.

Prior to the levy certification a Truth in Taxation hearing revealed the proposed budget for the next school year.

The total budget is $47.4 million. Most of the revenue, $38.5 million, goes into the General Fund. The bulk of the General Fund comes from the state general education to the tune of $24.6 million. Local property taxes account for 18 percent, or $6.9 million.

On the $38.2 million General Fund expenditures side, most, about 60 percent, is used for salaries and wages and an additional 18 percent is used for employee benefits. When divided into programs the General Fund is dedicated to "regular instruction" accounts for 41 percent, "exceptional instruction" is 19 percent and "site, building and equipment" is third with 13 percent.

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