Lakeville School's Property Tax Levy Going Up

Few people made it to the Lakeville Area Public School District's annual Truth in Taxation hearing last week, but the ones who did expressed concern over a $1.34 million, or 4.2 percent increase to the district's tax levy.

While the proposed 2011 budget and levy isn't official—the school board will formally adopt the budget on —it's not likely to be modified and will increase residential and business property taxes next year.

The new levy will result in a $27 annual increase for a home valued at $250,000, and a $179 annual increase for a business valued at $1 million.

Lakeville resident Dan Nelson said the community simply has had enough of tax increases. He pointed to the failure of two levy questions on the November ballot as evidence people can't afford to give any more.

"This year, the voters have spoken clearly. Their message is that we can no longer afford what the district intends to spend," Nelson said. "In spite of the fact that two of the three levy questions failed, school levies are still highest line item on next year's property tax statement. We simply cannot continue to spend as we have."

Randy Pronschinske, a Lakeville resident who also ran unsuccessfully for a seat on the school board this past fall, said many residents who read their tax statements will be surprised.

"I'm pretty sure if you asked 90 percent of the community, they would have said if they voted yes on question one, their taxes were not going to go up this year," he said.

Pronschinske was alluding to the one question that was passed by voters in November—a re-authorization of a $3 million levy originally passed in 2002. But he said most voters approved that question because they were told taxes wouldn't be going up as a result of it.

Mark Klett, the district's director of business services said the bulk of the increase in taxes for 2011 are for debt service increases for the general obligation bonds the district has.

The debt service levy actually increased $1.42 million, but a reduction in general fund levy dollars reduced the overall tax hike to $1.34 million, Klett said.

Klett also said the debt service is increasing each year because the building bonds the district is paying on have higher principal payments coming at the end of the bond's payment schedule. This is typically done, Klett said, because as a community grows, the new homeowners and businesses in the community help pay for the increases to the debt service. But with the recession, growth has stalled and the same tax base is now paying down larger chunks of debt.

Pronschinske said he's very curious to know if the debt service levy is going to be jumping by more than a million dollars every year in the future.

"What's it going to do the year after (this)? I'd like to know that next time I have to vote on a levy," he said. "If it's going to continue to go up a million or two million dollars a year, that's something I'm really concerned about as I look at the levies."

While the district's levy is going up, the school board will still have to make steep cuts to its budget. The over the next two years as a result of increases in personnel costs, declining enrollment, and most significantly, issues with state funding.

State lawmakers will also be looking to eliminate a $6.2 billion deficit when the Legislature convenes in January. Lawmakers said that a reduction in K-12 funding, which represents about 40 percent of the state budget, is certain to be part of any budget solution.

"We will be downsizing, there is no question," Superintendent Gary Amoroso said.

But that isn't likely to change that taxes are going up in spite of the district making cuts.

"We need to change things," Nelson said.