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Debt Service Equalization February Legislative Sesssion
Debt Service Equalization February Legislative Sesssion
Equalization
Draft prepared for Dover-Eyota School District
by Becky Gerdes for the February Legislative
Session
Goal
• To equalize homeowner tax effort for school districts by
linking Debt Service Equalization to a fixed percentage of
state average Adjusted Net Tax Capacity (ANTC)
Unequal Distribution
• There are property poor districts which means…
• There is not a good mix of commercial, business and property tax
that is residential.
• When you get more residential than the business side, it can
create an unequal distribution.
• Unequal distribution results in charging more money to get the
same outcome for a student.
Concern
• State funding for E-12 public schools has not kept pace
with rising costs, additional mandates and annual
inflation.
• Districts rely on school levies just to maintain current
programming or reduce budget cuts.
• The cost to the local taxpayer for the school levies is
based on the individual property wealth of the school
district.
Funding inequities among school
districts
Triadic Relationship
Federal
State Local
State reliance on local property tax
to fund a portion of E-12 education
Variation in Tax Base Among School
Districts
Variation in Tax Base Among School
Districts
Purpose of Equalization: Legal
Context
Minnesota Constitution, Article 13, Section 1
Resources on Debt Service
Equalization
•Definition of “Debt Service Equalization program” from
the 2017 MN State Statutes =
https://www.revisor.mn.gov/statutes/?id=123B.53
Sample maps below, but they are older
(2014).
http://www.mreavoice.org/mrea-map-raises-question-on-calcu
lating-school-district-wealth/
http://www.mreavoice.org/mrea-releases-map-on-household-
income-by-minnesota-school-districts/
http://mreavoice.org/wp-content/uploads/2015/03/MREA-Se
asonal-Rec-Equalization-on-LOR.pdf
https://www.minnpost.com/education/2017/02/legislature-g
oing-be-debating-education-funding-again-how-exactly-doe
s-minnesota-p