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Remme presents need for tax levy referendum

Only one attendee for information session

October 30, 2012
By Kremena Spengler - Staff Writer ( , The Journal

NEW ULM - One person attended a public informational meeting on an upcoming school operating levy referendum Monday night.

Also present were Superintendent Harold Remme and most members of the School Board.

District 88 is seeking approval of a ten-year levy of $575 per pupil, which is projected to provide $1.28 million per year for the district.

Article Photos

Source: District 88

Remme outlined some figures and reasons behind the referendum.

He started out by stating the challenge: providing adequate funding to meet the needs of preparing students for post-secondary education and employment.

Currently, the district has two levies in place: $450 per pupil per year renewed in 2010 for 10 years and $300 per pupil, in place until 2017. The combined value of the levies, with an inflation escalator, is $775 per pupil. The median state levy is $1,035 per pupil.

Remme said additional revenue is needed after several consecutive years of budget cuts, because of very limited increases in state funding in recent years, a shift in the delivery of state funding support, and a modest current and future enrollment decline.

How schools are funded

Remme went on to explain that state basic support per pupil now stands at $5,224, up from $5,074 in 2007-08. This is a 2.95 percent increase over the period in question, or roughly 0.5 percent per year. The increase just happened in the last two years - the funding formula was actually frozen from 2008-09 until 2010-11.

Remme said that, beside basic funds, school also receive other support - for example, funding for gifted- and-talented, extended-time, basic-skills, operating-capital, career, safety and other programs.

Remme explained that for many years, schools received 90 percent of the state funding during the year in place, and 10 percent during the following year. As state government deficits skyrocketed, however, the split became 70/30, and then 60/40. The state funding shift impacts local cash flow, and the result is cash flow borrowing, recapped Remme. Forty percent of state support translates into $5.3 million a year for District 88, he added.

As a result, the district borrowed the following to meet cash-flow needs: $3.9 million in 2009, $2.5 million in 2010, $4 million in 2011, and $3.8 million in 2012.

The general-fund (operating) balance changed from $3.8 million in 2008 to $4 million in 2009 (up that year thanks to one-time federal stimulus funds), then to $3.2 million in 2010 and $2.6 million in 2011. Each of these figures includes both restricted and unrestricted funds. Restricted funds can only be used for specific purposes; unrestricted funds can be used for daily operation.

Comparison with others

Remme then discussed New Ulm's referendum history and compared the current local levy of $775 per pupil to that of some other area schools: for example, $600 in Springfield, $685 in Mankato, $870 at GFW, $1,100 in Nicollet, etc., etc. He listed other area schools seeking levies this year: Fairmont, Faribault, Sleepy Eye, Madelia, etc.

Remme looked at the percentage of local taxes that go to education in different districts: 39 percent in St. Clair, 33 percent in Fairmont, 30 percent in Lake Crystal and Marshall, 29 percent in Madelia, 28 percent in St. Peter, etc. New Ulm's share of taxes going to education is fairly low, at 23 percent, he noted.

Budget reductions

and impact

Remme listed recent budget adjustments (see table). The district has cut, on average, $860,000 from its budget each year over the last nine years; or a total of about $7 million worth of programs.

The reductions have resulted into class section size increases, elimination of course offerings, delays in textbook purchases, restructuring custodial and clerical staffing patterns, reduced bus routes, a three-day furlough of non-union employees, increased activity fees, a fair-share fee costing structure, a main campus parking fee, delayed equipment purchases and an early retirement incentive.

Class sizes have reached 25-26 children in kindergarten (recommended size is 17-20); 28-29 in third grade (recommended 22-24) and 29-30 in sixth grade (recommended 23-26). Some 100 sections at the high school have more than 30 students and at least one as many as 37 students.

Remme then familiarized the public with the size of activity fees and gave examples of the potential financial impact on a household of the new levy (for example, $143 per year for a $120,000 house) (see tables, the district offers tax calculators on its web site,

If the requested levy is approved, the newly-elected school board will decide how to use the money, said Remme. Possibilities include class size reduction, returning more elective choices to the high school, concentrating on opportunities in science, engineering and math, and integrating technology in all classroom settings.

One question

The lone member of the public asked why the levy would be for 10 years.

Remme and board members took turns to explain that many schools tend to choose the maximum allowed time, so they do not have to do referendums year after year. One of the local levies expires in 2017, they added. Even if enrollment declines, the decline is not likely to be dramatic enough to make significant cuts. Fixed costs (utilities, transportation) would not decline.

The levy funding is per student, so the levy would decline with enrollment decline, added board members.

If alternative funding becomes available, the school board has the option of reducing the levy, they also added.



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