WILLMAR -- Taxpayers in the Willmar School District will likely see a small decrease in next year's levy, thanks to a surplus of funds collected for debt retirement.
The Willmar School Board certified a preliminary levy of $5,602,230 at its meeting Monday. It reflects a $47,475 or 0.84 percent decrease from the 2007 levy. Board members must certify the maximum amount they can levy to the state by Oct. 1. They must adopt a final levy by Dec. 10.
The coming year's decrease is due largely to a surplus of funds that has been building in the debt service account, according to Pam Harrington, the district's new finance director. She told board members that the state requires districts to levy at 105 percent of the annual debt service to compensate for uncollected taxes. In Willmar's case, the delinquent tax rate has been low and the fund has grown.
As a result, the district's levy for the coming year's debt service is being reduced overall by $321,698.69 to take advantage of the excess funds.
The decrease appears likely to be a one-year reprieve, however. The finance director noted that other trends point to a slow, but steady rise in the share of costs for local taxpayers.
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For Willmar, state legislative action has tended to increase the amount of local property taxes that must be raised in comparison to state aids received. The state formula places more of the burden on property taxes in district's where market values are rising and construction is occurring, and that's the case in Willmar.
The state has also revised its formula to reduce the ratio of state aid received by the district by virtue of its being a rural district, she said.
While the debt service levy will drop, the levies needed for other funds are rising. The state formula changes mean that the Willmar district must raise it excess or voter-approved referendum levy by $89,698.48 to $1,354,388.74, a seven percent increase.
The district will also be increasing the general fund levy by a proposed $190,687.59 to $1,693,856.96, a 12.69 percent rise.
The community education levy is proposed to decline by $6,164.24 to $302,046.82, a 2.0 percent drop. This represents an exception to the trend, where the ratio of state aid is actually increasing, according to the finance officer.
The biggest change comes in the debt service, where the levy will decrease by 12.50 from $2,573,635.70 to $2,251,937.01.
The actual debt service surplus is $413,199, but a tax settlement favoring the Alliance Pipeline is forcing the school district to abate a portion of its taxes as a means of refunding the company.
Board members have scheduled a truth-in-taxation meeting on the budget for 5 p.m. on Nov. 29 at the Willmar Education and Arts Center. They have the option of canceling the meeting since the levy will be decreasing. They will decide at their next meeting whether or not to hold it.
