School Board Holds Tax Levy Flat
No Increase In Tax Levy Three of Last Five Years
At its October 2011 Regular Meeting, the Minnetonka School Board voted to set the preliminary 2012 tax levy at an amount not to exceed $34.1 million dollars, which is equal to the 2011 tax levy. The Board has voted to hold the tax levy flat three of the last five years. The 2012 levy is 2.2 percent lower than the amount levied 16 years ago in 1996. (View Levy History)
Strategic financial management is credited with holding down taxes during difficult economic times. "We know that residents of our District are impacted by the struggling economy," noted Paul Bourgeois, Executive Director for Finance and Operations. "We want to keep the levy as low as we can for as long as we can, while still meeting the needs of our students."
Minnetonka has relied on enrollment growth and prudent financial management instead of increasing taxes to fund inflationary increases in education. For example, open enrollment is used to fill classrooms, keep schools open, and generate revenue—adding $11 million to the District’s budget this year. New resident students moving into the District or transferring into the public schools from private schools added another $2 million this year. As a result, Minnetonka is the only school district in the metro area that has not cut teachers, reduced services or dipped into its fund balance in the last five years.
The District also continuously monitors its outstanding bond issues to look for opportunities to take advantage of lower interest rates and create savings for taxpayers. In September, the Board took action to decrease the District debt service levy by $572,000 by refinancing a 2004 debt issue. The District’s outstanding bond rating (Moody’s Aaa) prompted the bonds to sell out within an hour at an interest rate of 1.83 percent. In total, the District has completed 10 bond restructuring transactions over the last three years that lower current and future levies by a total of $4.17 million.
Tax Levy Remains Lower Than 15 Years Ago
Looking back over time, the tax levy payable in 2012 is 2.2 percent lower than it was in 1996 and 14 percent lower than it was in 2001, just before the state eliminated the statewide General Education Levy and the Legislature assumed responsibility for $415 of locally-approved school referendum dollars.
During the last ten years, District voters have approved two operating and two capital referenda (in 2002 and 2007), and yet the total tax levy still remains lower than 10 and 15 years ago. During the same period, student enrollment and student achievement have climbed to all-time highs. District investments in high quality staff, updating facilities and leading edge technology have positioned the District to be a district of choice in the metro area. Families are increasingly choosing the Minnetonka School District as the community in which to raise their family.
Aware of the state’s looming financial crisis, Minnesota school districts are bracing for potential cuts to education funding and will advocate a zero percent increase in funding as a best-case scenario. At the same time, costs continue to increase.
Fiscal Stewardship
Minnetonka prides itself on responsible and prudent fiscal stewardship. Aggressive financial management on the part of the Board and Administration has saved taxpayers money and ensured that the 81.2% of the District’s annual operating budget is directed to the classroom to support students and instruction.
· The District’s Aaa Moody’s Bond Rating (the highest possible rating) is a testament to responsible financial management and strong fiscal oversight.
· A self-insured health insurance plan for employees is saving the District $6 million annually in insurance premiums.
· Competitive bidding for transportation services decreased costs 7.1% below 2007-08 rates for 2010-11 with a guarantee to not exceed 2007-08 rates through 2012-2013.
· Minnetonka continues to focus on innovative programs and high quality staff to attract families into the District because enrollment growth protects the District from budget cuts during difficult financial times.
Residents can view a presentation on the levy from the October Board Meeting at:
http://minnetonka-k12.granicus.com/MediaPlayer.php?view_id=2&clip_id=1371