Cloquet School Board passes 5.56 levy increase

Residents in the Cloquet school district can expect an increase in their tax levy from the school district of 5.56 percent for taxes payable in 2019.

During Monday's Truth and Taxation hearing, Cloquet school board members unanimously approved a total tax levy of $6,958,706 for the 2019 levy, up from $6,591,903 in 2018.

Business manager Candace Nelis said the state of Minnesota establishes the basic school district tax rates so it really isn't up to the individual school district. She also noted that tax increases don't always equate to more money for schools, because the amount the district receives in state aid may also fluctuate.

Additionally, she explained, although the district adopted its levy payable in 2018, that money will go toward a budget they haven't even discussed yet.

"This levy we're setting now is really for our 2019-20 school year," Nelis explained to the board.

Nelis broke down the different sources of revenue and expenses for the district in a presentation to the school board and the few audience members (which included school board member-elect Hawk Huard) who attended.

The local property tax levy covers approximately 16 percent of the district's $42.3 million total budgeted revenues. State sources - including general education aid, state special education, early childhood- and school readiness funds and long-term facilities maintenance money - cover 71 percent, or $30.14 million of the budget. Other local sources outside of the levy add up to more than $4 million and include payments from other school districts for extracurriculars or special education, tuition or fees charged by the district, grants or donations received and food sales. Federal sources make up 5 percent of revenues, and include almost $2 million in special education funding and funding for Native American programs.

Employee salaries and wages are expected to make up nearly 43 percent ($20.79 million) of the school district's 2018-19 expenditures, followed by employee benefits at 15 percent ($7.36 million). Capital expenditures make up 13 percent ($6.3 million) of the expected expenses.

Debt service - on nonvoter levies for things like district retiree funds and voter-approved levies like the one that paid for the new middle school and other school renovations - make up 11 percent (5.35 million). Purchased services such as special education services or tuition for kids attending other school districts make up 12.7 percent ($6.1 million) of the expenses, while supplies and materials make up 4.6 percent ($2.24 million).

The total expenditures for 2018-19 is $48.386 million, which exceeds the $42.3 million in expected revenues by more than $6 million.

Nelis said the majority of the difference in revenues and expenses is due to expenses for updated roofs at several schools and the upcoming auditorium renovation at Cloquet High School. Those expenses will be paid for by long-term facilities maintenance bonds, and money left over from the bond sale for the new middle school.

Nelis explained that Cloquet residents have seen fairly substantial increases to their overall tax bills in the last two years due to increased valuations of most properties after the Carlton County Assessor's office came through in 2016.

Cloquet School Board members unanimously approved the final tax levy with minimal discussion Monday, which Nelis said she has to submit to the county by later this month so the county can calculate final taxes for April.

No one from the audience addressed the board during the Truth and Taxation hearing Monday, but retired teacher Clarence Badger did address the board during its regular meeting regarding a huge jump in the costs of supplemental insurance that Badger and his wife Patty purchase through the school district.

Although the pair of retired teachers both get Medicare and Medicaid, which covers about 80 percent of medical costs, they need supplemental insurance to help cover the rest. Badger pointed out that the costs for supplemental insurance next year are increasing more than 18 percent, while their school district pensions will go up only 1 percent.

District business manager Candace Nelis said the district renegotiates employee health insurance every two years, but it doesn't negotiate the supplemental insurance offered to retirees.

Badger, who retired 22 years ago after 28 years as a business/vocational teacher in Cloquet, said he has asked before that at least one member of the district insurance committee be a retired staff member.

Badger requested that the board also look into allowing retirees who switch to different insurance policies outside the school district to come back at a future date. He said the current policy of not allowing people to get back onto the district's supplementary insurance discourages people from looking elsewhere.

"I think it was a $60 increase per month each, that's another $120 in costs a month," Badger said. "After retirement, we stayed with the school district, it's good coverage, which we appreciate ... But between property taxes going up, insurance going up and our salaries only going up a little bit here and there, it's a challenge."