Are owners of agricultural land being asked to shoulder an unfair portion of the taxes to pay for school building projects?
In some cases, yes — and that's why so many school capital referendums are defeated in Greater Minnesota. Not because they're not needed but because it's difficult to get support from farmers when they know they'd have to pay the bulk of the cost.
State Rep. Paul Anderson of Starbuck shared insights about the topic earlier this month. Testimony was presented in the House Property Tax Division about the success rate of bond issues when put before the voters. The discussion included a comparison of the number of capital construction referendums that were approved in the seven-county metro area versus Greater Minnesota.
A spokesperson for the Minnesota School Boards Association testified that in the past three years, a total of 65 capital referendums were put on the ballot in outstate Minnesota. Of that total, only 14 were passed by the voters and 51 failed.
That's a success ratio of 21 percent. Contrast that number to the 89 percent of capital referendums passed in the metro area, Anderson said in his column.
A big reason for the low number of bond issues passing in rural areas, Anderson pointed out, has to do with how the construction of new school buildings is paid. All agricultural land is part of the levy for capital referendums and, in many districts, ag land makes up a large majority of the tax base.
So, in many cases, the cost of new construction falls more heavily on the farmers who own that land.
The tax levy is figured differently for the other kind of school referendum — an operating referendum. That's when additional funds are raised for the daily operation of a school. In this case, only the house, garage, and one acre are figured into the levy.
Anderson noted there was a provision in last year's vetoed tax bill that would have helped the owners of ag land pay the cost of capital referendums. It would have provided a 40 percent credit paid by the state to the owners of agricultural land for all current and future capital referendums.
Anderson said there is strong support for this provision, and odds are high that it will be included in this year's tax bill.
The provision makes sense and deserves support from the Legislature and governor.
Farmers are in a tough spot right now, weighed down by low commodity prices, high land values and crushing health care costs. Property taxes have increased by 114 percent for Minnesota farmers in the past decade.
Farmers shouldn't be penalized because they happen to own large amounts of land within certain school districts. The credit would help even the tax burden. It's the fair thing to do.