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Helmut Schmidt, Published March 08 2014

Q&A: Fargo's Tuesday mill levy vote

FARGO – Here are some of the basics on the mill levy election being held in the Fargo School District on Tuesday:

Why is this vote being held?

Since 2009, state lawmakers have provided enough money to buy down 125 mills of local school property taxes statewide.

In return, lawmakers require that districts with general fund mill levies above a state-mandated cap should be required to go to their voters by Dec. 31, 2015, to get any levies above that cap (dubbed excess mill levies) reapproved by their voters.

The current “hard” cap sits at 70 mills (60 mills, plus 10 more that are allowed by a school board vote).

Fargo levies 139 general fund mills.

If school districts with excess mill levies get them approved by voters, they can continue taxing normally for 10 years. Then they must go back to voters.

If they aren’t approved, then the dollar amount brought in by the levy that exists at the end of 2015 is frozen at that level.

The district can seek approval again before the end of 2015 if the matter is voted down on Tuesday.

Why is it being held now as a special election?

Board members debated holding the vote with the June city or fall general elections but decided that because of the complexity of the issue, it would be better to have it on a separate ballot. They argued it would allow voters to concentrate on the topic.

What is the 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 70 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 150 mills effective Dec. 31, 2015 for the following 10 years?

What is the cost of the election?

An estimate given to the school board in January put the cost at about $22,000.

Will a “yes” vote mean a tax increase?

District officials say the election is about the authority to tax. School board members say they want to hold to the current 139 general fund mills. So, in that respect, it is not a tax increase.

The school board is also asking the public as part of this vote for the authority to levy up to 11 more mills if needed. If the school board opted to use any of those mills, then, yes, the tax rate could increase.

What would the effect of a “no” vote be on the school district’s budget?

The dollar amount taken in by 139 mills would be frozen at the 2015 level. District estimates put that at $39.8 million.

Using a 2.2 percent rise in property valuations per year, the loss of revenue in 2016 would be about $876,277. Ten years later in 2025, the annual loss of revenue would grow to nearly $9.7 million, for a total over 10 years of $51.5 million.

Revenues would stay frozen until they reached the future equivalent of 70 mills. With a 3 percent growth in property valuations, that would take about 24 years, the district estimates.

What is a mill? What is the property tax effect on my pocketbook?

A mill is a property tax rate expressed at one-tenth of 1 percent. So 139 mills is equal to a tax rate of 13.9 percent on taxable value. A home assessed at $200,000 has a taxable value of $9,000, so the tax bill on 139 mills would be about $1,251.

According to the school district’s 2013-14 operational budget, the district’s taxable valuation is $274,348,769. That means every mill will provide the district with $274,348. Multiplying that by 139 mills, means the general fund levy will bring in about $38,134,372 in revenue.

The value of a mill has averaged a 2.2 percent annual increase over time.

Where do I vote?

Tuesday’s election is a districtwide election, which means residents of the Fargo School District can vote at any of the polling sites.

Those sites include: Atonement Lutheran Church, the Fargodome, South High School, and Lincoln, Clara Barton, Kennedy, Madison, McKinley and Roosevelt elementary schools.

The polls will be open 7 a.m. to 8 p.m.

How were the polling sites chosen?

Schools were selected to be among the polling places to ensure neighborhood access to voters to cast their ballots. Each school was chosen for its location and its ability to have a secure area to host the polling site. All voters will access the area through one secure spot.

Who can vote?

Residents of the Fargo School District can vote in the election. It should be noted, however, that the school district does not encompass all of the city. Some Fargoans live in the West Fargo School District.

Also, the Secretary of State’s Office makes it clear that only residents of a school district can vote in that district. Simply owning property in a school district does not qualify a person as a voter in that district.

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