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Districts need short-term power to raise taxes without voters' approval, Minnesota Rep. Greiling says

Legislator: Districts need short-term power to levy without voters' OK

By Megan Boldt

School administrators are staring down a triple-barreled threat.

State aid for schools is frozen. Minnesota is borrowing more than $2 billion in funding promised to schools to help balance the books, forcing districts to dip into their reserves and take out loans. And lawmakers still need to fill in an additional $1 billion shortfall.

So does that mean school districts should have more authority to raise property taxes without voter approval? Some education leaders believe so. The notion has been batted around for years but never gained traction.

"In any other year, I would be horrified by the idea," said Rep. Mindy Greiling, DFL-Roseville. "But I will consider this as a short-term solution. Education funding should be from the state. But schools need a lifeline right now."

Greiling, who chairs the House K-12 Education Finance Division, introduced a bill last week that would allow school districts to levy up to $200 per pupil from local taxpayers without voter approval.

The bill is one of three that gives districts more taxing authority. They are scheduled to go in front of Greiling's committee this week.

One bill would allow school boards to renew an expiring levy. The third would let districts increase taxes to help pay for proposed increased contributions to help stabilize the state pension fund for teachers and administrators.

But some are leery of expanding levying authority, arguing that local taxpayers already are shouldering a heavy burden.

"I'm very hesitant to do that. When property taxes have gone up $3.6 billion since 2003, we don't need to be raising more property taxes," said Rep. Paul Marquart, DFL-Dilworth, chairman of the House Property and Local Sales Tax Division.

About three-quarters of school funding — close to $7 billion annually — comes from the state.

The rest comes from property taxes. School districts across the state levied about $2.3 billion for taxes payable in 2010.

About two-thirds of that is voter-approved for operating expenses and building construction and renovations. The other third, mostly for special programs and projects, does not require voter approval.

Under current law, if school districts want to increase their operating revenue, they either have to get more money from the state or ask voters to approve a tax increase. Cities and counties, on the other hand, can raise taxes without going to voters — although since 2008 state law has capped annual property tax increases.

Scott Croonquist, executive director of the Association of Metropolitan School Districts, said giving districts more levying power makes sense. He said it's odd that school boards don't have the same taxing authority as city councils and county boards, considering that they're all elected bodies.

School board members would listen to constituents before making a decision to increase taxes, Croonquist said, and if they didn't, they might not get re-elected.

"We realize that this probably isn't the first choice for state legislators or school board members," Croonquist said. "But when you look at how bleak the state budget situation is, it's really the only option we have."

School leaders are worried state funding could be cut this year, for the first time ever, and that $1.8 billion in aid postponed in July might not be paid back for years, if ever.

School districts also found out in January that the state will delay an additional $423 million in payments. State law requires that the payments be made by May 30. But educators fear state finance officials will use the delay tactic again — possibly as soon as September — to raid their reserve funds.

Stillwater Superintendent Keith Ryskoski said that given the state's budget woes, giving school boards more taxing authority makes sense. And board members won't decide to increase taxes without first having a robust public debate, he said.

Even in better times, the Stillwater school district has had a hard time getting voter approval for taxes. In 2007, a levy renewal was approved, but two requests for additional funding were denied.

"It's a challenging time economically. (The proposed legislation) would give local communities a chance to say they're willing to spend more because they value saving certain programs," Ryskoski said. "But with that said, I never would want to see this become a substitute for the state's role in funding education."

Rep. Pat Garofalo, R-Farmington, who sits on the House education committee, questions whether the state should give school districts more levying power without pushing for other reforms at the same time.

"We're a state that has historically valued local control," he said. "But on the other hand, I'm also frustrated at the inability of some school boards to stand up to their teachers unions and agreeing to contracts they can't afford."

Garofalo would like to reduce unfunded mandates and reform laws that govern collective bargaining and teacher tenure.

"We certainly want to take care of education, but ... if we're going to give them more tools to raise revenue, we need to also give them tools to cut their expenditures," he said.

Marquart, the Dilworth Democrat, said Minnesota needs to put more state money, not local money, into schools.

"The more we rely on property taxes, the more we're going to have a great disparity in school districts in the state," Marquart said.

Greiling agrees; she views giving schools levying authority as a short-term fix, one that would go away when a new framework for funding schools is adopted.

The plan, dubbed the new Minnesota Miracle and championed by Greiling, would move responsibility for school funding to the state and away from local property taxpayers. It would cost an additional $2.4 billion a year.

"Education should be funded by the state, plain and simple," Greiling said.