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The Park Rapids School Board on Dec. 19 approved a payable 2023 property tax levy and budget for fiscal year 2022-23.
According to Business Manager Kent Fritze’s truth-in-taxation presentation, the 2023 levy totals $7,903,021, an increase of about $1.16 million or 17.13% from 2022.
This includes a general fund levy of about $2.7 million, a community service fund levy of $197,000 and a debt service levy of about $5 million, or 63.4% of all levies.
Fritze explained that the big increase in the debt service levy (approximately $860,000 on the year) is due to the district issuing bonds in the new year to build new facilities.
Another $85,000 increase, he said, comes from lease payments to place students in the Up North Learning Center, a Setting 4 special education facility in Walker.
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Fritze said the new bonds are why the district’s 17% levy increase exceeded those of neighboring districts, ranging from 2.55% in Menahga to about 4% in Nevis.
Despite the increase in the levy, he said, the district chose to spread its school building bond issue over two years in the hope of keeping property owners’ taxes approximately level.
Acknowledging that residential properties went up in value – almost doubling in some cases – Frtize said that because the actual tax went down on properties whose value stayed the same, “our taxes this year didn’t increase that much, and that was part of a plan that we designed at the beginning” of the bonding process, to avoid hitting taxpayers with a big increase.
Because the tax levy is divided between taxpayers based on their property value, Fritze explained, when some properties go up in value more than others, their owners end up paying a bigger share of the levy.
Revenues and expenses
In his revised 2022-23 budget, Fritze projected revenues totaling about $50.5 million and expenses totaling $34.5 million, a net gain of $15.9 million. Broken down by fund category, this included a $750,000 net expenditure in the general fund and net gains of $2,500 in food service, $58,000 in community service, $16 million in the construction fund and $663,000 for debt service.
Regarding the Minnesota Department of Education’s (MDE) funding formula, Fritze charted the district’s five-year enrollment trend, increasing from 1,601 in 2017 to 1,670 in 2019, then dropping to 1,608 in 2021 before reaching 1,683 in 2022.
Meantime, he noted, MDE’s basic general education funding allowances increased by at least 2% each fiscal year from 2015-16 to the present, with a 2.5% bump in 2021-22.
Fritze projected general fund revenues totaling $22.2 million in 2022-23, of which 78.6% is to come from the state, 16.4% from local revenues, 4.9% from federal grants and a small amount from the sale of equipment.
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Compared to other school districts, Fritze said, the Park Rapids school district receives $11,072 in total revenue per student, compared to a state average of $12,707 – ranking 243rd out of 327 school districts in Minnesota. While the Park Rapids district receives more general education funding than the statewide average, he said, lags in local levies, special ed and facilities funding.
On the expense side of the budget, Fritze projected a general fund program total of about $23 million, of which $10.8 million goes toward elementary and secondary instruction, $5.2 million to special education, $2 million to sites and buildings, $1.6 million to pupil support, $1.1 million to administration, $930,000 to instructional support, $630,000 to district support, $360,000 to vocational instruction and $270,000 to fiscal and other fixed costs.
“Sliced another way,” he said, 82% of the general fund budget will be spent on salaries and benefits, 10% on purchased services such as substitutes, 5.6% on supplies and materials, 1.5% on capital expenditures and 0.5% on fiscal costs.
In two motions by board member Stephanie Carlson, the school board unanimously approved the payable 2023 property tax levy and revised budget for fiscal 2022-23 as presented, with the budget for all funds totaling $50,452,350 in revenues and $34,515,935 in expenditures.
