Either way, Carlton taxpayers would pay

Whether the Carlton school district consolidates with Barnum or Wrenshall, taxpayers in Carlton face higher taxes, say a pair of financial reports acquired by the newspaper.

Last week’s revelation that Carlton and Barnum officials were considering consolidation between school districts included reference to a pair of financial impact reports conducted for Carlton by a Roseville, Minnesota financial advisor of public institutions.

The Pine Knot received what were similar 13-page reports generated this year from Ehlers Public Finance Advisors, dated Oct. 3 (analyzing consolidation with Barnum) and March 1 (analyzing consolidation with Wrenshall).

The newspaper reviewed the reports in an effort to compare what superintendents and school board members have been able to see about the impacts between what are now two consolidation proposals featuring Carlton at the center.

Both pieces of analyses focused “on revenues that have a levy component,” the reports said, and didn’t include per pupil state aid for any consolidation, because it would be the same as the sum of revenue currently collected by each district individually.

With that understanding, there were a few differences between Carlton consolidating with one district or another.

“The attendance area of the current Wrenshall district is 16 percent larger than the Carlton school district … (serving) relatively similar numbers of students.”

Conversely, the Barnum report noted that its attendance area was 80 percent larger than Carlton’s, serving approximately double the number of students. Officials last week estimated Carlton-Wrenshall would top 600 K-12 students compared to Carlton-Barnum eclipsing 1,000 students across the same levels — provided all students remained within those districts.

In both cases, the student population density lessens, causing consolidated districts to lose some revenue that’s based in funding received for early childhood family education and “transportation sparsity,” totaling a $147,939 reduction for Barnum-Carlton and a $61,607 reduction for Carlton-Wrenshall, the Ehlers reports said.

Those are mostly negligible sums — the sorts unlikely to tilt an objective opinion of consolidation one way or another.

In fact, either Carlton move appears feasible in one regard, as most non-student aid-based revenues are retained.

“For most funding formulas, there will not be significant changes in the amount of revenue generated by the consolidated school district, versus the combined revenue of the existing districts,” the analyses in both reports said.

In either consolidation scenario, Carlton taxpayers would see increases, while the counterparts in the partnering district would face lower taxes — assuming all taxpayers pay on the combined debts between districts.

According to Ehlers, Carlton’s tax rate for levies spread on net tax capacity would reach 4.166 percent in a consolidated district with Wrenshall, compared to 3.133 percent alone (based on 2024 payable taxes). Wrenshall’s would be reduced to 4.166 percent, from 5.336.

With Barnum, Carlton’s tax rate for levies spread on net tax capacity would be 5.452 percent, an increase from its 3.575 percent alone (based on taxes payable in 2025). Barnum’s would be reduced to 5.452 percent, from 8.262 percent.

(The Ehlers’ reports, done several months apart, included taxes payable in 2024 for the Wrenshall analysis, and taxes payable in 2025 for Barnum.)

The reason for Carlton’s tax increases, the reports surmise, is that Carlton brings the larger tax base into both scenarios.

According to U.S. Census totals, the city has twice as many housing units (436) as Barnum (261) or Wrenshall (178), in addition to roughly double the population (948) compared to Barnum (620) and Wrenshall (428). It’s also a larger commercial center than either Barnum or Wrenshall.

Consolidation with Barnum, based on taxes payable in 2025, would find the share of a home valued at $250,000 going from $330 to $502, increasing $171 annually, versus the Barnum counterpart falling from $726 to $502, or a $224 decrease, according to Ehlers.

With Wrenshall, based on taxes payable in 2024, Carlton taxes on a $250,000 home would go from $392 to $532, up $140, and the similar Wrenshall taxpayer would drop from $739 to $532, down $207 annually.

The tax increases would lessen on Carlton taxpayers if officials decide that, under consolidation, taxpayers would be responsible for pre-existing debt only on the district they were in previously. Both Wrenshall and Barnum, with more recent facility improvements, carry heavier debtloads than Carlton. Conversely, those facility improvements are part of what makes both districts seemingly attractive candidates for consolidation.

For instance, on a $250,000 home, with debt separated based on pre-existing districts, a Carlton taxpayer would pay $419 with Wrenshall, based on 2024 payable taxes, and $449 with Barnum, based on 2025 payable taxes.

A taxpayer on a $250,000 home in a Carlton-only district would pay $392 in 2024 and $330 in 2025, according to Ehlers’ analyses.

In any scenario — carrying all consolidated debt or not, choosing Barnum or Wrenshall — consolidation would cost Carlton taxpayers for absorbing rural districts with lower tax bases.

“The overall levy shift is due primarily to the larger tax base in the current Carlton district,” the analyses in both reports said. With Wrenshall, Carlton’s net tax capacity and referendum market value is 60 percent larger, and with Barnum those figures are double, or 100 percent, larger, the Ehlers reports said, so in both cases “much of the levy of the new district is shifting to the larger Carlton tax base.”