REGIONAL—Voters across the North Country will have school ballot questions before them on Nov. 3, with the details dependent on the district in which they reside.
In the St. Louis County School District, or ISD 2142, voters will be met with three separate ballot questions regarding school funding: the ISD 2142 operating referendum, the ISD 2142 capital projects levy and a statewide constitutional amendment increasing distributions from the Permanent School Fund.
The ballot questions come as ISD 2142 faces a significant budget shortfall, caused by a combination of enrollment declines, which have reduced state funding for the district, and rising operating costs.
The operating
referendum
The operating referendum is the most complex and financially impactful of the three questions that voters will decide on Nov. 3. If passed, the measure would raise approximately $5.85 million annually for the district, with roughly 45 percent coming from state aid and 55 percent coming from local taxpayers.
Referred to as the “Approval of New School District Referendum Revenue Authorization” on the ballot, the referendum would authorize the district to raise $3,160 per pupil for 10 years. The proposal would allow the district to access state matching funds through Minnesota’s Seasonal Recreation Property Tax Base Replacement Aid, or STBRA.
The referendum money could be used for general operations, including paying teachers and staff, educational programming, transportation and other day-to-day expenses.
The proposal would increase property taxes for district residents. The district has an existing board-approved operating levy, known as a Local Optional Revenue, or LOR levy, that would be eliminated if the referendum passes. The district plans to reduce its use of that existing levy, which generates no matching state dollars, and replace it with the new voter-approved referendum revenue, allowing it to access the matching state aid available through STBRA.
For a property valued at $250,000, the operating referendum would result in an estimated $184 annual tax increase.
If the referendum does not pass, the district would not be able to access the STBRA funding tied to the referendum. It also would not receive the additional local revenue generated by the referendum.
Even if approved, the new referendum revenue would not immediately address the district’s projected $6 million deficit in the 2026-27 budget since the additional state funding would not become available until 2028.
The capital projects levy
The capital projects levy, referred to as the “Capital Project Levy Authorization” on a sample ballot, would raise $1.5 million in taxes each year for 10 years to provide money for longer-term or capital-related expenses rather than ordinary day-to-day operating costs. The ballot specifies that the estimated total cost of the projects funded over the 10-year period would be approximately $15 million.
The money could be used for equipment, technology and other qualifying capital expenses, including hardware, software, curriculum materials and student transportation vehicles.
Unlike the operating referendum, the capital projects levy would not be tied to the STBRA program or state matching funds.
For a property valued at $250,000, the capital levy would result in an estimated $61 annual tax increase.
Combined, the two ISD 2142 questions would represent an estimated $245 annual tax increase for a property valued at $250,000.
The Permanent School Fund amendment
The constitutional amendment on Minnesota’s ballot this November would increase funding distributed to school districts from the Permanent School Fund, and all voters in the state will have their say on the measure.
The Permanent School Fund is made up of proceeds from lands granted to Minnesota for the benefit of schools, along with proceeds and investments associated with those lands. The Minnesota Constitution requires the fund to be managed as a perpetual financial resource for school districts.
The proposed amendment would change the constitutional language governing how money from the fund is distributed. If approved, state law would set annual distributions at 4.5 percent of the fund’s average net asset value over the preceding three fiscal years. Under current law, distributions are based on the fund’s investment income and are capped at 2.5 percent of the fund’s value.
Unlike the two ISD 2142 questions, the Permanent School Fund amendment would not create a local property tax. The ballot language states that the fund supports school districts “without raising individual income or property taxes.”
The change would apply statewide and would increase funding available to all Minnesota school districts, but only marginally. The distribution changes would take effect July 1, 2027, for aid payable in fiscal year 2028.
For ISD 2142, the district estimates the amendment would provide an additional $61,281 next year. Under Minnesota’s election rules, leaving the constitutional amendment blank has the same effect as voting “No.”
Ely has its own
referendum
The Ely referendum functions similarly to the ISD 2142 operating levy, because it would allow the district to access state aid through the Seasonal Recreation Property Tax Base Replacement Aid program.
Ely is seeking to increase its operating referendum authority while eliminating its existing Local Optional Revenue levy. The proposal would generate approximately $325,698 in additional annual operating revenue, with about 40 percent coming through state aid.
According to the district, the change would have little or no property-tax impact. Instead, the district would increase its operating referendum authority from $347.99 to $1,775 per pupil while reducing its $724-per-pupil Local Optional Revenue levy to zero.
Like the 2142 referendum, the state aid associated with the Ely proposal would only be available if voters approve the operating referendum.