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The Albert Lea School Board on Monday approved a 6.42% increase in the overall property tax levy payable in 2024.

The increase equates to about $606,000, for a total levy amount of $10.04 million. 

Jennifer Walsh, executive director of finance, operations and safety for the district, said a $100,000 home that stayed the same in value would see a $13 increase in the school portion of their property taxes — from $366 to $379. While this is more than what was paid in 2023, it is less than what was paid in 2022, when a $100,000 home paid $417 a year in school taxes.                                                                                                       

She recognized that most homes are still seeing increases in their values, which in turn affects their taxes. She said a home that was valued at $100,000 in 2017 has increased in value on average to $170,000 for the current levy — that is a 70% increase over the seven years. In that same time, the school district tax has increased 71%, tracking almost identically to the increase in home values. 

School board member Angie Hoffman was the sole vote against the levy increase, motioning at first to table the vote to the next meeting to see if Walsh could reduce the levy to no higher than a 5% increase. Hoffman said 5% was still over the rate of inflation, and stated that taxpayers are stretched thin.  

After Hoffman’s motion to table was voted down, the board voted to approve the levy as presented by Walsh, with Hoffman the lone vote against. 

Walsh said if the board were to have approved a levy at less that what had been proposed it would have been what she called a “double whammy,” as there would also be less funding coming from the state. She said for every reduction that is made, it in some way impacts students. 

“To me, it’s a balance between the taxpayers and the school district,” Walsh said, stating she thinks the district has been fiscally responsible and maintained a healthy fund balance. She said the funds are driven by formulas of what the district is entitled to receive.

When a district underlevies, it can also often get into a cycle of continuing to underlevy in future years before it is forced to make larger increases. 

Walsh said almost 82% of the general fund revenue for the district comes from state aid. Federal aid for the upcoming year is down significantly to only about 4% compared to recent years as COVID-relief dollars have been spent. The levy makes up about 11% of the total revenue. 

Regarding expenditures, Walsh said salaries and benefits make up the largest piece, at 79.11%, followed by purchased services at 13.25%, supplies and materials at 3.89%, capital expenditures at 3.32% and other expenses. 

Factors that impacted the revised budget included enrollment numbers, as 31 fewer kindergarten students are expected now versus when the board approved the preliminary levy in June, and overall 67 fewer students are projected. 

Walsh said this will equate to less funding that the district will receive from the state. 

She said kindergarten projections are difficult to predict, and cited declining birth rates and parents deciding to hold their children back a year as a few reasons for the lower enrollment. Presently, there are fewer kindergarteners coming into the district than 12th graders who are graduating. 

In the general fund, Walsh said there will be an almost $688,000 increase, which includes a 2.57% increase in the operating referendum due to inflation, and a higher levy portion because of increased tax capacity and decreased enrollment. Total revenue between the levy and aid is decreasing by about $272,000. 

She said the general fund portion of the levy is split between two parts. First is the referendum market value, which adds up the value of all residential and business properties and then divides the taxes in a pro-rated manner against them at the same percentage. Agricultural land and seasonal recreational cabins are excluded from this portion. 

She noted that though the increase in property values has slowed, they’re still seeing an increase in values. 

The remainder is split over net tax capacity, which looks at the various types of properties and distributes taxes based on the type of property. The district’s estimated tax capacity for the pay 2024 levy is about $27.99 million, compared to about $25.95 million previously, or an increase of 7.88%.

The Community Service Fund decreased by about $75,000 because the state took on a large portion of community education and early child family education funding. 

The Debt Service portion of the levy stayed relatively the same with an about $6,200 decrease from the prior levy. 

Board Chairman Neal Skaar said the board has approved keeping a 12% fund balance, and to deviate from that by spending more than the district takes in or taking in less than the district spends could jeopardize that balance. 

He also said he thought it could compromise what the district offers to its students. 

“I think we would be committing a disservice to those people we’re here to represent,” Skaar said. 

In other action, the board recognized Andrew Gustafson, a math teacher at the Area Learning Center, as district Employee of the Month in September and Carrie Kirsch, a job coach in the transitions program, as Employee of the Month in October.