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Helmut Schmidt, Published January 19 2014

Campaign for tax leeway gets rolling in Fargo

FARGO – It is two months before the Fargo School District’s March 11 mill levy vote, and school board members have started an educational campaign.

The board hopes voters will agree to let the district keep its 139-mill general fund levy, plus allow up to 11 mills to be added if needed over time.

If voters decide not to approve the mill levy plan by a Dec. 31, 2015, deadline, Fargo schools could lose more than $50 million in tax revenues in the decade that follows, district officials say.

Meanwhile, a citizens advocacy group, “Vote Yes for Fargo Schools,” has created a website and plans to start speaking with community and business groups to urge voters to pass the measure.

“Fargo has always been very strongly supportive of education,” said Cole Carley, former head of the F-M Convention and Visitors Bureau. Carley is currently leading the group. Former Fargo Mayor Bruce Furness is acting as the group’s treasurer, Carley said.

“These are our kids. This should be our decision,” to determine how much money will be spent on local schools, rather than have lawmakers from elsewhere dictate that, Carley said.

The Fargo School District’s full general fund levy authority is 170.46 mills, but school boards over the past decade have trimmed what is used to 139 mills.

Still, that 139-mill levy is above the state’s 70-mill general fund levy cap. (That’s 60 mills, plus 10 more allowed with a school board vote.)

State law requires the district to go to voters to get any mill levy authority above the state cap approved before the end of 2015. The approval must be renewed every 10 years.

Not getting that mill levy authority approved could have drastic consequences.

Fargo schools Business Manager Broc Lietz said the district would lose $876,277 in revenue from lost increases in property values for the 2016-17 school year alone.

From then on, lost revenues would mount quickly, even at a modest 2 percent per year rise in property values.

In the 10th year, lost revenues would be $9.6 million, and the accumulated loss over the decade would top $51.5 million, Lietz said.

“Some tough decisions would have to be made, especially as you get out in the later years,” Lietz said.

Revenue taken in by the school district would remain frozen until the 139 mills equals 70 mills of property value sometime in the future. At a 2 percent increase in value annually, that would take 36 years, Lietz said.

Higher rates of growth could speed that process, but even with an aggressive 5 percent annual rise in property values, it would take 15 years for the mill levels to equalize, Lietz said.

In short order, such losses in revenue would affect school district programs and operations, said Robin Nelson, the board’s communications committee chairwoman.

“Let’s say from now on, you’ll never get another raise, but your heat bill and child care will go up. What do you need to do? The obvious answer is something must be cut back,” Nelson said.

At the same time, school board members can’t advocate a position in presentations.

“We need to be so careful with what we say. We can’t advocate. We can educate,” Nelson said.

Carley said approving the mill levy won’t be a tax hike. Rather, it will simply allow the current system to continue.

“This is a mill levy authority that was granted to Fargo schools by Fargo voters,” Carley said. “But because of state law, we have to go back to citizens to reapprove it.”

The mill levy question will be the only one on the March ballot.

Readers can reach Forum reporter Helmut Schmidt at (701) 241-5583