Property taxes and the Governor’s proposal


This week marks the deadline for bill introduction in the 2016 Session. As of the end of last week, 299 bills were introduced; last year 348 bills were filed by this time.
As the session unfolds, legislators are learning more about the governor’s education funding proposal. The plan is funded with a half-cent increase in the state sales tax to improve teacher pay and provide about $40 million in property tax relief.

The relief would come by reducing the general education levy across all classes of property, in proportion to what each class currently pays. Last year, property taxpayers contributed $328,338,264 to schools through the general education levy. Broken out by property class:
– Agricultural $1.568 per $1,000 of valuation $ 57,516,422 total
– Owner-occupied $4.075 per $1,000 of valuation $113,966,994 total
– Commercial $8.727 per $1,000 of valuation $156,854,847 total

The $40 million in property tax relief would fund a 12% reduction in the general education levy. The new levies would be as follows:
– Agricultural $1.380 per $1,000 of valuation $ 50,616,654 total
– Owner-occupied $3.586 per $1,000 of valuation $100,290,955 total
– Commercial $7.680 per $1,000 of valuation $138,032,265 total

In addition, the proposal would abolish the pension levy. Right now, school districts may assess up to 0.3 mills for a pension levy. The governor’s proposal would incorporate this levy into the general education levy. The levy raises $19.2 million statewide.

There are ongoing discussions about how to ensure accountability of any new revenues provided to schools. Among items being discussed is the need to reinstate reserve fund caps, on a tiered system based on enrollment. The caps would take effect in the 2018-19 school year, giving districts time to manage toward the caps. Once in effect, a district that has too much in reserves would have its state aid reduced dollar-for-dollar. However, the governor is proposing an oversight board to consider requests to waive the caps in special circumstances.

If you have questions, please feel free to contact me by emailing

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