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Bemidji School Board OKs levy limit

Taxpayers of the Bemidji School District could see a slight decrease in their taxes for fiscal year 2011.

At a school board meeting Monday night, the board approved a Pay 2011 levy limit at $8,997,036.78. If this limit is approved again in December, the levy will mark a .11 percent (roughly $9,500) decrease from last year's levy limit.

Each year, prior to the end of September, the Bemidji School District must certify a preliminary levy limitation for the following year.

According to Chris Leinen, the school district's director of business services, three factors play into this slight decrease.

First, last year the district levied $276,918 for leases on building space at the County Collaborative Building, the Riverside School and the Alternative Education Center. This year that levy will decrease by $35,130 due to the consolidation of programs at the new Downtown Education Center.

Second, the area of health and safety has historically been under-levied by the district. The levy limit is $816,982.62 and the suggested levy is $231,000. In a report, Leinen cites this allows the district to maintain a cushion against potential losses in state funding.

Lastly, this is the last year of a three-year levy for a Local Collaborative Time Study, resulting in a levy of $24,287.

"People should actually see a decrease in their taxes," Leinen said. "However, there's a slight difference in what classification a person's property is in and that could affect this."

The final levy may not be higher than the preliminary levy limitation approved by the board Monday, except for a voter-approved bond or operating levies of natural disasters occurring after certification is finalized.

The Department of Education and the Department of Revenue collect data throughout the year from various taxing entities. They use this data to calculate each school district's tax levy authority.

Once the levy authority is calculated by the Department of Education, the school board must decide whether to certify their levy at the maximum amount or less.

Bemidji currently has a voter-approved operating levy of $501 per pupil. The maximum amount allowable under the state-imposed cap is $1,332.24 per pupil and the state average is $936 per pupil.

"Most schools simply write the maximum amount on the line," Leinen said at the meeting. "We have historically under-levied in keeping a promise related to our referendum. That will be carried through this year as well."

After estimates of tax statements have been mailed to property owners and truth in taxation hearings have been held, the final levy is certified in December.

Tax levy authority may only vest in a school board through voter approval or legislative action. A school board does not have any taxing authority unless it comes from the state legislature or the voters of the Bemidji School District.

Bemidji's market value, which is the tax base that most of the taxes are spread across, grew by 3.2 percent over the past year, compared to statewide growth of 0.2 percent.

Part of that reason, Leinen said, is because agricultural land seems to be holding up stronger under the pressures of the current market than are commercial or homestead-type properties.

In addition, the district sales ratio, which is the relationship between the average sale price and its taxable valuation, has increased from 90.6 percent to 96.6 percent and the state increased to 91.4 percent to 94.9 percent.

"That means there are not a lot of discrepancies between the sale price and market value that it's taxed at," Leinen said. "This is indicative of a soft housing market, where housing prices aren't running away from the assessors' ability to keep up with those valuations."