Hi, folks:
(Disclaimer first: I work for the Senate DFL, so I
have my predispositions. The House and Senate have
significantly different tax and K-12 bills on the
table. While I'm sure the Senate bill has its faults
by some measures, my letter will look at the House
bill, since it seems to be the House proposals that
are driving the discussion. I'll do my best to be
fair.)
For Minneapolis education funding, the House bills
pose several problems. On the K-12 side, Carol Becker
is right to say the formulas will be changed for the
worse. The state gives additional money for
low-income students as part of the general formula
(compensatory ed.), and the House wants to reallocate
this money more on a per-pupil basis rather than by
need. With such a high number of poor students,
Minneapolis will certainly lose funding. Also, the
House bill counts locally-raised referendum money as
part of its spending total, even though these dollars
may not be approved by St. Paul and may never actually
materialize. This makes the House totals look better
than they really are.
On the tax side, Minneapolis will take a double hit.
First, commercial/industrial property (C/I) would no
longer count when calculating referendum levy rates:
homeowners will have to pay lots more to generate the
same amount of levy money as before. This shift will
make it more difficult to pass effective education
referenda, limiting Minneapolis' ability to overcome
state-level funding cuts.
Second, C/I and residential rate cuts under the House
plan will put more of the regular education costs on
homeowners, at a regressive rate. By lowering C/I
rates by ten percent and putting a $400,000 and a
$100,000 home on the same tax rate, the House plan
will make the balloon bulge for less-valuable
residential property. It's true that C/I property
taxes turn into regressive consumer expenses, but this
proposal will even further weaken any attempts at
progressivity in our property tax system. The state
buydown of K-12 property taxes will not do much to
offset these issues. The average buydown will
increase slightly (from 78 to 85 percent of local K-12
costs).
If more of the public knew the details regarding the
House's version of compromise, it would be easier to
understand why the Senate hesitates to accept the
House offer. The bottom line is that running schools
costs money, and the House plan doesn't add up to good
news for Minneapolis.
Dana Bacon
Page neighborhood
--- Carol Becker <[EMAIL PROTECTED]> wrote:
> As I understand it, if the state said (we are
> talking just the big levy here under this scenario)
> the School Board would not be able to levy property
> taxes and instead the state would give the School
> Board money based on this formula, the School
> Board would get less money than if they were just
> levying it directly.
*snip*
> The State taking over funding also takes local
> control away.
*snip*
> the effects of the state taking over at least the
> lion's share of funding for K-12 schools could
> result in formula changes that would be serious
> funding reductions for Minneapolis schools.
>
> Carol Becker
> Longfellow
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