FAQ

While the levy increase may be difficult to understand, it reflects a growing district with increased needs, and the state's shift to move financial burden's more local and less from the state. While this tax increase helps fund ongoing operations and maintenance, it does not address the specific needs outlined in the proposed referendum. The referendum focuses on critical facility improvements, such as expansions and renovations to accommodate growing enrollment, adding a childcare center, and upgrading infrastructure. These projects require additional funding beyond the current levy.

Overview of Minnesota School Finance

• State Aid vs. Local Levies:
  Minnesota's school finance system uses a formula to determine the balance between state aid and local taxpayer contributions. The amount of state aid decreases as the district's local property wealth (per pupil) increases, shifting more funding responsibility to local taxpayers.

Key Factors Contributing to the Levy Increase

1. Increased Property Valuations (16-22% Growth from Pay 23 taxes to Pay 24 taxes with Pay 25 being to 5 and 4.5% respectively):
   • Market Values, Referendum Market Value, and Net Tax Capacity all increased.
   • Higher property valuations mean the district is considered wealthier per pupil.
   • Result: The state reduces aid, expecting the community to contribute more through property taxes.
2. Enrollment Growth:
   • Increased student enrollment leads to more total revenue needs.
   • However, higher enrollment also triggers reduced state aid due to equalization formulas.
   • Result: Local taxpayers shoulder a larger share of the funding burden.
3. End of QZAB Bond and LTFM Debt Service:
   • The Qualified Zone Academy Bond (QZAB) program and debt service from Long-Term Facilities Maintenance (LTFM) funding ended.
   • The conclusion of these programs means adjustments in state aid equalization, further reducing state contributions.
   • The District used previously paid tax dollars (105% over levy) to offset payable 2024 debt service taxes, the District did not have these corresponding dollars available to reduce Pay 2025 taxes. Had they been available like previous years, the District would have only been looking at the spread levy increasing 13% versus 21%.
   • Result: The district’s ability to fund itself locally increases, requiring higher levies.

• Perception vs. Reality:
  • The overall increase isn’t due to mismanagement but structural changes in funding.
  • It should give our District constituents talking points to emphasize to our local legislator’s the State Aid funding formulas need to be analyzed and adjusted to keep up with inflation and economic factors  
  • Property value increases and enrollment growth are positive indicators but complicate tax explanations.

Specifics to account for the 21% increase to the Spread Levy

• This year’s tax base growth is projected to be 5.8% for the RMV portion of your levy and 4.52% for the NTC portion of your levy. This means to me that your local assessors concentrated on raising property valuations for more than just seasonal rec and agricultural land.
•  Your debt categories went up around $90,000. This is a direct result of the District using all of their debt excess to reduce their debt levies last year. On your average $187K Homestead Residential Property, this has an impact of approximately $14.
•  $70,000 stems from improved pupil units combined with loss of aid due to the previous year's 16-22% tax base growth (we always lag a year behind on State Aid formula ramifications). This $70K will eat up another $41 of impact on the average local homeowner.
•  The other NTC general increase of $72K adds another $11 of impact.

The Ortonville School District currently receives approximately $190,000 annually in Long-Term Facility Maintenance (LTFM) revenue. This state funding is intended for ongoing maintenance needs, but it is insufficient to cover major updates or replacements, such as HVAC systems, bathrooms, or auditorium improvements, which together are estimated to cost between $6 and $7 million. The referendum aims to supplement this state aid, allowing the district to address these larger projects while using the LTFM funds for smaller, ongoing needs like roofing, plumbing, and electrical systems​.

Anyone who resides within the Ortonville School District boundaries is eligible to vote in the February 11, 2025, special election. To cast a ballot, voters must:

• Be at least 18 years old on or before the election day.
• Be a U.S. citizen.
• Have resided in the district for at least 20 days prior to the election.
• Be registered to vote (voters can register at the polling place(Armory)  if they bring proper identification).

Residents from surrounding areas not within the school district boundaries, even if they are in the same city or county, are not eligible to vote in this referendum.

To minimize disruption, a phased approach to construction will be implemented with new additions likely constructed first and completed prior to the renovation of existing spaces. This phased approach aims to reduce the impact on daily operations and ensure that as much of the existing space remains functional as possible throughout the project.

While some schedules, spaces, and activities may be temporarily adjusted, careful planning will prioritize minimizing these impacts. Efforts will be made to maintain normal school operations, and any changes affecting students, staff, or community activities will be communicated well in advance.

The vision for the new auditorium is to create a dedicated space specifically designed for the arts, separate from athletic facilities. This modernized auditorium will primarily support the school's fine arts programs, including drama, music, and other performances. However, it will also serve as a valuable resource for the entire Ortonville community.

In addition to fine arts, the auditorium will be available to host a variety of public events, meetings, and concerts. This versatile space will provide a professional venue for community gatherings, cultural events, and local organizations, enhancing opportunities for engagement and enrichment beyond the school environment.

By investing in this dedicated facility, we are not only supporting our students' artistic growth but also creating a hub that benefits the entire community, fostering a stronger connection between the school and local residents.

While the Ortonville School District building once accommodated more students than now, the need for additions and renovations reflects the changing role of schools and the expanded services they provide. Modern education goes beyond traditional classroom learning, requiring spaces and facilities to support a wide range of programs and services that weren't present in past generations.

Key reasons for the expansion:

• Specialized Services: Schools now offer services like basic medical care, mental health support, counseling, and other basic services once accessible only out of schools or out of the community. This requires dedicated spaces. Our expanded Trojan Clinic is an example of this modern approach.
• Early Childhood Programs: Programs like our Preschool, Tiny Trojans Childcare, and other early learning initiatives were not part of the traditional school setup decades ago but are essential today.
• Inclusive Education: Additional resources are needed for special education services, intervention programs, and individualized instruction.
• Community and Extracurricular Spaces: Modern schools serve as community hubs with spaces for arts, athletics, and public events, promoting broader engagement.
• Flexible Learning Environments: Contemporary teaching methods require adaptable spaces for collaborative learning, technology integration, and project-based activities.

This project ensures that our facilities meet the diverse needs of today’s students and community, reflecting the evolving role of schools in providing comprehensive educational and support services.

The upcoming referendum for the Ortonville School District is separate from the existing operating referendum and will not impact or replace it. Here’s how they relate:

• Existing Operating Referendum: This funds the day-to-day operations of the school district, including teacher salaries, classroom supplies, and general maintenance. It has its own timeline and will end according to its original schedule, which is at then end of Fiscal Year 2028.
   
• Proposed Referendum: This new referendum is specifically for facility improvements and additions, addressing long-term needs like expanded  early childhood and CTE classroom spaces, a dedicated auditorium, and essential infrastructure asset replacements.  It will fund construction and renovation projects, not operational expenses.
   

Do they overlap?

Yes, the existing operating referendum will continue until its scheduled end, which is before or overlapping with the early phases of the new facilities project. However, because these referenda serve different purposes, they do not directly impact each other. Approval of the new referendum does not extend or increase the operating referendum but ensures funding for capital improvements that support the district’s growth and modernization.

Together, these measures aim to provide a well-rounded educational environment, addressing both short-term operational needs and long-term infrastructure goals.

The estimated property tax increase for the February 11, 2025 voter approved bond referendum would be placed on taxes payable in 2026.

The Ag2School Tax Relief Credit significantly reduces the property tax burden on agricultural landowners for school bond levies. For the Ortonville School District referendum, the credit ensures that agricultural properties only account for 18.64% of eligible bond payments, compared to 62.12% without the Ag2School Credit. This substantial reduction is made possible because the State of Minnesota covers 43.48% of the principal and interest payments on school bonds through the program, currently at the 70% credit level.

The tax credit is automatically applied to agricultural landowners' property tax bills; no application is needed. Importantly, non-agricultural property owners will not experience an increase in taxes due to this credit, as the state fully funds the relief.

For more detailed property tax information, including additional credits for homesteads or senior citizens, visit the Minnesota Department of Revenue’s resources on Homestead Credit Refund and Property Tax Deferral for Senior Citizens.

Please review the linked document that illustrates the points listed above.

Ag2School credit overview

While the Ag2School Tax Relief Credit is currently part of Minnesota state law, changes to the program would depend on future legislative actions by the Minnesota State Legislature. The credit has widespread bipartisan support, making the risk of its removal very low. The credit's strong support and automatic application provide confidence in its continued availability.