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What is an Operating Levy and History

In 2001, the State of Minnesota Omnibus funding bill fundamentally changed the way schools were funded. This was an attempt to make school funding more uniform (due to court rulings and the Minnesota constitution) for students throughout the state.  Back in 2001, rich school districts (like Edina) were spending many time more on per student education than poor districts (like Nett Lake Indian Reservation). Another imputus to change the way school funding  was done was because of Gov. Jesse Ventura and the  public outcry to reduce property taxes.  So in 2002 the local property tax general fund levy was totally removed; and “excess [operating]” levies were largely removed and capped. In other words, the funding source for schools was shifted from local property taxes to the State budget. The State budget is funded mainly by income and sales tax.  Local property tax can only augment the state funding, and operating levies are capped by state law and at most, can only contribute to a small portion of the school's revenues.

So when proponents of the levy claim that local residents have to pay more for school, that is wrong.  State money to schools has not decreased and even if it had, us local residents have no more to contribute to the tax levies than the rest of the state's residents, particularly in this economic stagnation.

Here’s a chart on where Duluth schools get their money:



Here's a chart on where the state of Minnesota gets their money:


And here's a chart on how the State of Minnesota spends its money:



Note that K-12 spending has increase in real dollars and increased t0 40% of the budget from last biennium's 37%.

Higher education has been reduced by 2%.

Overall, the State of Minnesota budget has increased by $3 billion from the last biennium or by about 9%.

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Dr. Radut Consulting