Property tax relief through school districts would be given through bills heard Thursday by a Minnesota Senate panel.
The Senate K-12 Education Budget Division considered a handful of property tax bills, including ones authored by the panel's chairman, Sen. LeRoy Stumpf, DFL-Plummer, and Sen. Rod Skoe, DFL-Clearbrook.
"Last year, the Senate built its education funding bill around a zero property tax increase," said Stumpf. "However, because the governor insisted on $139 million in property tax increases as part of the final 2005 education budget bill, we in the Senate feel it is vitally important to provide tax relief to homeowners, many of whom have experienced double-digit increases."
Currently, in Minnesota, K-12 education is funded through two sources: state aid and local levies. Stumpf's bill equalizes the two sources and allows school districts to get more state aid. Skoe's bill would do the same, but at a higher level in a formula that determines referendum equalization levy revenue versus market value.
Both bills were discussed Thursday by the panel and laid over.
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"The state has not changed its equalization formula in 14 years," Skoe said. "As property values have increased, the amount of state aid for school districts has decreased. The cost is being passed onto property tax payers.
"When talking about this bill I tell everyone about the Waubun School District," Skoe added. "Three years ago they passed a new school building levy. The district was supposed to get 30 percent of the money from the state. Because of increasing land values, that has been decreased to zero. It's not fair that what the voters had presented to them and approved has changed into something else."
While given authority to levy more dollars for schools, rural districts have had difficulty asking strapped taxpayers to put out more.
"Rural communities have been hit hard with double-digit property tax increases in recent years as districts have had to ask voters to approve levy referenda to avoid drastic cuts in school programs," Skoe said. "This bill will lower the amount school districts have to ask property taxpayers to fund."
Under either bill, school districts would begin to see more state aid in fiscal year 2008.
"In 2002, the Legislature agreed that the state should pay a larger share of school costs and passed property tax reform legislation that cut local property taxes significantly," Stumpf said.
"Unfortunately, because of education funding cuts at the state level and zero formula increases for three straight years, school districts have had to rely on property taxes to pay for basic school costs. It's time to reverse that trend," he said.
Stumpf said statewide property taxes are nearing levels they were at prior to the state "buy-out" in 2002.
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"If we don't do something now, by 2009, Minnesotans will be paying more in property taxes than they were before the state took over payments in 2003," he said. "Our bill will provide at least $150 million in relief, help schools provide quality educational programs and give homeowners a break."
In another matter, Skoe said his bill to change the language of a transportation funding constitutional amendment question was also heard this week.
The Senate Transportation Budget Division heard the bill Tuesday and recommended it to pass to the Senate Rules and Administration Committee.
This fall voters will be asked if they want to change the state's Constitution to dedicate 100 percent of the Motor Vehicle Sales Tax to transportation purposes. The wording currently states that "no less than 40 percent" should be dedicated to transit and "no more to 60 percent" should be dedicated to transportation for highways.
"Some rural members are concerned that if the language is not changed, 100 percent of this money will be spent on transit costs for the Twin Cities," Skoe said. "I have a bill to clarify the amendment so we can ensure that there is money for rural highways."
Skoe's bill provides expressly that 60 percent go for roads and bridges and 40 percent for transit.
