News

New state law causes higher taxes

By Scott Wagar

10/07/2014

Editor’s Note: This article deals with the Bottineau School District’s property tax levy public forum which was held on Oct. 2. The financial numbers presented in this for the 2014-15 school year are all estimated projections for the school district.   

The Bottineau School District held its public property tax hearing on Oct. 2 and stated two primary reasons as to why the property tax levy will increase by 19.67 percent.

According to Jason Kersten, superintendent of the Bottineau School District, the increase in the mill levy is due to the value of mill increasing, the district receiving less oil and gas money and high maintenance costs that need to be taken care of in the district.

MAINTENANCE

“In determining the 2014-15 school budget, the district will be requesting a total of 392,460 more dollars than the previous year,” Kersten said. “This is a 21.1 percent increase in dollars from the previous year. The increase is in the building and miscellaneous fund.”

Kersten listed the items for the increase in the building fund, which included:

● New doors at Central School (at an estimated cost of $59,825)

● Security system at Central School

● Fire escapes at Central School

● Roof over Middle School (at an estimated cost of $800,000)

● Three science labs for junior and senior high schools

● New bleachers for gymnasium (at an estimated cost of $181,000)

● New windows for the junior and senior high schools

● Projected projects is to include remodeled bathrooms and an additional modular at Central School

OIL AND GAS

Kersten also added that the decrease in oil and gas revenue comes from a state law which calls for a deduction of state funding in oil and gas when a district receives a specific amount of money from this fund.

“From our state aid payment, the state deducts 75 to 100 percent of what is called Other Local Revenue (OLR) in our budget. The major deduction is 75 percent of our oil and gas money received from the county,” Kersten said.

“The total deduction for the 2014-15 school year from OLR is $1,003,350. Of this amount, $911,251 is deducted from oil and gas revenue,” he continued.

“As mentioned, the district has 75 percent of their oil and gas revenue deducted from our state aid payment. Because of a change in Gross Production Tax (GPT) formula in the last legislative session, the district will see a large decrease in oil and gas revenue.

“In 2013-14, the school districts in Bottineau County received 35 percent of the 25 percent of the GPT the county received. This amounted to $1,357,334,” Kersten stated.

“During the 2013-14 school year, the counties’ oil production hit $5,000,000. This now changes the formula significantly. In 2014-15, the school district in Bottineau County will split 5 percent instead of 35 percent of the GPT. We are estimating our oil and gas revenue at $185,800, this is significantly less than last year’s $1,357,334. The district will also be deducted 75 percent of last year’s oil and gas revenue in this year’s state funding.”

MILL VALUE
     
Kersten pointed out that in the 2013-14 school year there was a total mill levy of 66.39 mills, but due to the increase in the value of mill from last year the district’s levy went up to 72.74 mills to cover the upcoming maintenance costs in the district.

“House Bill 1194 includes all levies a district has in its budget must have zero increase. The Bottineau Public School’s zero increase is at 60.69 mills,” Kersten said. “The proposed budget has total mills of 72.74. This 11.95 mills more than zero increase number of 60.69 mills. This make the percentage of increase exceeding zero increase number of mills at 19.67 percent. The proposed budget has an increase of 6.35 mills (72.74) compared to last year (66.39).

“If our proposed budget total mills would have come to 60.69 or less, the district would not have been required to have this meeting.”

The taxable valuation for the 2013-14 school year was $28,020,933. This year’s taxable valuation is $30,970,172 (minus the present valuation of new land growth at 365,900), increasing the mill levy to 19.67 percent.     

PAYOUT

When it comes to the cost of the percentage increase, Kersten said that a home worth (without any increase to the assessed value) would increase $28.57 from the last school year to this school year. He showed that in 2013 a home that was valued at $100,000 cost the property owner $295.76, while this school year the cost would be $327.33 for a house of the same value.