It's that time of year when property owners brace for news of levy increases from their county, city and school district.
Tax levies, which each of these entities must pass before January, tend to increase year by year and balance against property values and the size of the tax base to determine how much each property owner must pay. But for its 2022 tax levy, the Hutchinson School Board has approved a decrease of 2.24%, making good on a projection made a few months ago by Rebecca Boll, director of business and finance for Hutchinson Public Schools.
“We’re expecting not to have any surprises,” she said when the preliminary levy was approved back in September. "There could be a little savings."
After previous levies of $9.12 million in 2020 and $9.3 million in 2021, the School Board approved Boll's advised $9.01 million levy for 2022.
How will the change impact taxpayers? To provide an example, Boll assumed a property value increase of 7.5% from the past year on a house valued at $175,000, which is fairly close to the median value of $183,000. The owner of such a property within the Hutchinson School District will pay $78 less on the school portion of their property taxes — a change of about 9.3%. Decreases across the spectrum of property values and types range from 9.2% to 16%.
Boll provided a list of major factors that contributed to the levy decrease:
- The district has 30 fewer students than anticipated, which cuts its state-allowed levy authority. This removed $41,939.
- Unemployment insurance costs are expected to fall from COVID-19 levels, which decreases levy authority. This removed $30,389.
- Lower enrollment also impacted long-term facilities maintenance levy authority. The pay-as-you-go levy for asbestos abatement projects is anticipated to be at a lower level. This removed $137,579.
- Another $86,888 was removed due to prior year adjustments for fewer field and facility rentals during Minnesota State High School League shutdowns, and shorter seasons. A critical worker child care facility lease was also removed.
Each year for the past few years, the School Board has had to face the possibility of reducing teacher positions, largely due to lower enrollment. The trend of lower enrollment is being played out across the state and brings with it funding cuts.
Boll said the school is still studying how enrollment will factor in next school year, and if cuts will be considered. But, she said, the levy does not drive such changes. The school is unable to increase its levy to safeguard against such cuts, as state formulas and local voters mandate limits as to how much schools can levy.
"If we operated like a city, we would certainly take a look at that ... but our formulas don't work the same way," Boll said.
In 2011 voters approved a $128 per-pupil levy increase. In 2013, voters approved another $680 and $180 per-pupil levy increase. Those levies will remain through the fiscal 2023 and 2025 years. It will be up to the School Board to decide if it will ask voters to approve those levies again, or make any change.
