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Helmut Schmidt, Published March 04 2014

Fargo voters go to polls Tuesday to decide on mill levy cap

FARGO – Per-student spending at Fargo’s public schools grew twice as fast between the 2003-04 and 2010-11 school years as it did nationally, a trend mirrored by the rest of North Dakota, state and federal records show.

Fargo’s per-pupil spending rose from $6,891 to $10,762, a 56.2 percent increase. North Dakota’s per-pupil average rose from $7,727 to $11,420 in that time, a 47.8 percent increase, state Department of Public Instruction records show.

National spending per student rose from $8,287 to $10,560, a 27.4 percent increase. Minnesota and South Dakota saw 28.1 percent and 26.7 percent increases in per-pupil funding, respectively, according to Census Bureau reports through 2010-11, the most recent year of federal statistics available.

Since then, the Fargo School District’s per-pupil spending dipped to $10,698 in 2012-13, ranking it squarely in the middle of the state’s districts, but second only to Grand Forks among the state’s five biggest school districts.

Why is that important?

Because Fargo School District voters go to the polls Tuesday to decide whether to allow the district to continue taxing above a state-mandated mill levy cap.

The school district can now levy up to 170.46 mills, but it is asking voters to allow a levy of up to 150 mills for 10 years.

The School Board hopes voters agree to continue the current levy of 139 general fund mills, plus allow the option to levy up to 11 mills more if needed.

Fargo’s 139 general fund mills are nearly double the state-mandated cap of 70 mills. A law passed by the 2009 Legislature requires school districts to get those “excess mill levies” approved by voters by Dec. 31, 2015.

A mill is a property tax rate expressed as one-hundredth of 1 percent. In Fargo, a taxpayer with a $200,000 home would pay $9 for each mill levied.

If voters say no, the district’s property tax revenues will be frozen.

State Sen. Tim Flakoll, R-Fargo, said the Legislature drove much of the increase in per-student funding in the past decade, pouring large sums of money into improving teacher salaries and boosting school programs. He said the state created a more equitable funding system for public schools, then spent more than $1 billion to provide local property tax relief for school districts.

That influx of money made North Dakota one of just 14 states to increase per-student funding between 2008 and now, the Center on Budget and Policy Priorities reported.

North Dakota increased per-student spending 27.2 percent in that time, eclipsing second-place Iowa’s 11.2 percent rise.

The vast majority of states saw per-pupil spending drop in inflation-adjusted dollars, with Oklahoma seeing those dollars drop 22.8 percent since 2008, the Center on Budget and Policy Priorities reported.

Flakoll said Fargo’s upcoming mill levy vote is “the right thing to do” and gives voters a say on taxes.

It also levels the playing field between districts that had unlimited mill levy authority, and those that had always gone to voters for funds.

“The school districts can make their case … for whatever amount they pick as good and necessary. And ultimately, the voters can decide if that’s the education they wish to fund,” Flakoll said. “This gives the people their say. We’ll find out from there if that’s what they want.”

A turn-around

In 2003-04, the Fargo School District ranked 81st in the state with an average per-pupil cost of $6,891, the state Department of Public Instruction reports.

The top of the rankings is dominated by smaller school districts, most of them with anywhere from a few score to a few hundred students. Smaller districts don’t have the student numbers to take advantage of the economies of scale larger districts enjoy in hiring staff, buying supplies or paying for buildings.

Three years later, Fargo ranked 48th among the state’s 154 high school districts and the highest among the state’s five biggest school districts with a per-pupil cost of $8,643.

At that time, Grand Forks ranked 88th with a $7,488 cost-per-student. The state average cost was $7,843, almost $800 less than Fargo’s, DPI data show.

In the years since, the Legislature provided 125 mills of property tax relief to each school district, which was significantly cut local tax burdens. Fargo school boards have also trimmed almost 31.5 mills from the budget.

That helped turned around Fargo’s ranking.

Fargo’s per-student cost in 2012-13 was $10,689, ranking it 74th among the state’s 149 high school districts – right in the middle of the pack and $200 above the state average of $10,517, DPI reports.

It also meant that the Grand Forks School District became the priciest of the state’s biggest school districts, spending $10,971 per student to rank 66th.

In the years before that, Fargo had consistently spent the most per student of the state’s five biggest school districts.

“From our perspective, it’s all about trying to find as much efficiency as we can, and leveraging federal funds” to pay for programs and keep local taxes down, said Fargo schools Business Manager Broc Lietz.

The West Fargo School District remained the cheapest among the big school districts, ranking 135th in 2012-13 with a per-student cost of $8,714.

Apples to oranges?

While in-state cost comparisons work well, making true comparisons between states on the cost to educate students is difficult.

That’s because how each state slices, dices and collates data for per-pupil costs can vary greatly, even among close neighbors like Minnesota, North Dakota and South Dakota, officials for each of those states said.

Still, some gross comparisons can be made.

The cost for Fargo to educate its students appears similar to large outstate Minnesota districts for the 2011-12 school year, according to data from Minnesota’s Department of Education.

While Fargo spent $10,989 per student, Mankato spent $9,332, Duluth spent $11,234 and Moorhead spent $9,669. The Minnesota average was $10,336.

South Dakota schools, on the other hand, appear to operate on leaner budgets.

Sioux Falls schools spent $7,106 per student in 2012-13, while Rapid City spent $7,188, the South Dakota Department of Education reports. The state average was $7,739 per student.

Early voting options

What: Early voting for the Fargo School District’s March 11 mill levy special election

When: 10 a.m. to 7 p.m. today through Friday

Where: Doublewood Inn, 3333 13th Ave. S.

Ballot language: An amendment to section 57-15-14, passed by the 2009 North Dakota Legislative Assembly requires school districts to get approval from their voters by Dec. 31, 2015 to continue any prior voter authorized general fund tax levies which are greater than the current statutory general fund levy limitation. The current Fargo Public School District’s general fund levy authority is 170.46 mills. The current statutory general fund levy limitation is seventy mills on the dollar of the taxable valuation of the school district. Shall Fargo Public School District No. 1 have a general fund mill levy authority of up to one hundred fifty mills effective Dec. 31, 2015 for the following ten years?

Absentee ballots: They can be requested in person at the Cass County Courthouse or through the county’s website. Ballots must be postmarked or returned on or before Monday.

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