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Something to think about...by Superintendent Westerberg

Property owners recently received their tax statements containing the proposed levy for the upcoming year. Much like last year, there’s some good news and some bad news. The good news is the value of property in the Big Lake School District has increased again this year. The value of property in the district increased 11%, which follows a 10% increase from the year before. Two things are happening; the value of existing homes and property has significantly increased and there has been a significant increase in new construction, especially housing. The good news is this increased housing results in more residents and more property tax base to spread the cost of government services like education.

When looking at my own property tax statement, the value of my home increased 4.6% from the previous year, while the school portion of my property taxes went up 4.2%. This means if the value of my home had not gone up in the last year, the school portion of my property taxes would also not have increased.

The State of Minnesota provides additional funding to school districts in property poor areas. Property poor districts are those having little commercial or industrial property; therefore, property taxes are paid primarily by homeowners. This additional funding by the state is intended to keep the gap between the property rich and property poor districts from getting wider. This additional funding is called equalization. A down side to the 21% increased value to property in the Big Lake District over the last two years is we are no longer considered a property poor district. Therefore, the state provides decreased equalization money. The lost revenue from the state is then made up by the local property tax payers.

At the Truth in Taxation hearing being held in the Community Room at Independence Elementary starting at 6:00 p.m. on Thursday, December 19, the public will learn the total property tax increase for the district is 7.5%. However, 6% of this increase is due to the loss of equalization aid mentioned in the previous paragraph. The actual increase of revenue to the district is the remaining 1.5%, which is below the rate of inflation. What appears to be a large tax increase for the school district, in reality, is a revenue increase less than the cost of inflation. In short, the good news is the value of property in the Big Lake District continues to increase significantly and more residents mean the tax base is bigger. The bad news is the state provides a decreased amount of additional state aid because the district is no longer considered property poor. Therefore, the local property tax payers pick up the difference.