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No more school referendums?

Operating referendum battles affecting the Frazee-Vergas, Lake Park-Audubon and countless other school districts statewide would be a thing of the past or reduced if some state legislators have their way.

As part of a proposed "New Minnesota Miracle," State Rep. Mindy Greiling, DFL-Roseville, who chairs the House K-12 Education Finance Division, is stumping around the state selling a plan to radically reform elementary and secondary school financing.

The bill aims to help school districts finance their operations without having to resort to operating levy referendums. If fully implemented, the state would provide $7,500 per pupil to school districts instead of the current amount of $5,175.

The name of the bill comes from the original Minnesota Miracle passed in 1971 that first paved the way for state funding of schools. Before that, all schools were paid for through local property taxes, with rural districts suffering back then as they are today.

By raising that amount, most school districts wouldn't have to resort to using levy referendums and hurt property owners in the pocket book to support basic needs, Greiling said.

"We just feel strongly that schools were meant in the constitution to be state funded and not local with property taxes," she said. "And worse yet when some can pass it (levy referendums) and some can't, that's not fair to the kids."

District 9B Representative Paul Marquart, DFL-Dilworth, whose district covers the city of Detroit Lakes, said that the bill is geared towards helping rural school districts.

"Our rural school districts don't have adequate funding," he said.

And with the plan, rural districts get the help they need without increasing property taxes.

"The property tax reduction is a real key," Marquart said.

"We don't have the wealth like they do in the Twin Cities," he added.

The original purpose of the operating levy referendums has been distorted, Greiling said.

She said they were designed to pay for extras that aren't essential to education, but nice to have if the voters agreed.

"It used to be that the districts that wanted extra world languages or mega sports offerings would go for referendums," Greiling said. "But now it's just to keep updated technology, pay the teacher or have reasonably-sized classrooms."

Currently, 306 of 340 school districts in the state are operating with an excess operating levy.

For districts with a levy, an offset of $500 per pupil would be provided to reduce the property tax burden. Districts without a levy in place would also get that offset so that a temptation isn't there to levy.

Another component that helps address rural issues is changing the formula for enrollment to a three-year average instead of the current one-year figure.

One big hurdle for the bill is that it will cost $1.7 billion over six years, in a time when the state faces a budget deficit next year of $500 million to $1.5 billion, without inflation figured into it.

Taxes would have to be raised to pay for it, although the levy buyout alone would take $600 million from property taxes, shifting that to the state, Greiling noted.

Not everything in the "New Minnesota Miracle" is designed to help rural schools. More funding would be provided to help areas around the state to pay for school district salaries where the cost of living is higher.

Despite Detroit Lakes housing costing more on average than the rest of Becker County, it isn't designed to help out the Detroit Lakes School District in that regard, Marquart said.

"That would tend to benefit the metro area a bit more," he said.

Special education would receive full funding as well, which would help out Detroit Lakes, as it is a regional center for special education students.

That funding in and of itself hurts districts financially.

"If we would fund special education as much we promise, which is 68 percent of the salaries, most districts wouldn't need to go for levy referendums," Greiling said.

For building maintenance needs, districts can approve an alternative facilities levy without having to go to the voters for direct approval.

Greiling said that only the larger districts qualify for that form of funding now, but the small districts may need help maintaining existing buildings the most.

"We never added in the small districts and some of those have the oldest buildings of all," she said

Part of the move to change that was to ensure that rural areas have adequate facilities.

"You don't have the square footage in the school districts in the area to qualify for the alternative facilities levy that we get," Greiling said. "I never thought that was fair.

Approval of the "New Minnesota Miracle" is far from being certain as funding for the proposal has yet to be determined.

"That's the $64,000 (question)," Greiling said.

However, she did say that the bill is scalable and she doesn't expect everything to be funded at once.

"I like to compare it to an Eiffel Tower," Greiling said of how the plan can be implemented in phases.

She said that funding comes in bits and pieces, so once the foundation is taking care of, the top can be built later.

"It could be a small Eiffel Tower or large Eiffel Tower, or anywhere in between," Greiling said.