Duluth School Board hikes taxes nearly 12 percent to cover lack of property salesDuluth property taxpayers will see an 11.9 percent increase in the Duluth school district’s share of taxes in 2013 to help pay off Red Plan debt.
By: Jana Hollingsworth, Duluth News Tribune
Duluth property taxpayers will see an 11.9 percent increase in the Duluth school district’s share of taxes in 2013 to help pay off Red Plan debt.
The Duluth School Board voted 6-1 Tuesday after its Truth in Taxation hearing on the increase, with member Art Johnston voting against it. Several community members spoke out against the increase, citing how it affects homes and businesses.
John Stromgren said the new increase will have him paying more than $300 a month more for his home and business.
“Residents have less money to spend on necessities,” he said, and businesses that don’t pass increases on to customers end up closing. “Will you do the right thing and vote down this tax increase?”
Paul King called the board to task for what he characterized as an inability to manage money, noting that small-business owners like him are raising prices or looking elsewhere because of tax increases.
“It’s like you’ve bought a home; you’re a married couple that bought a home that’s way more expensive than you can possibly pay for and now you’ve found that out,” King said. “Yes, we have fabulous schools now, but we’re broke because of it.”
Tim and Katie Carter said the property taxes on their West Duluth home have increased at a “phenomenal” rate and they incurred $40,000 in flood damage this summer. Tuesday’s school tax hike piles on to what now amounts to doubled rates in a year for the couple, taking into account all other property taxes, Tim Carter said.
“We can’t stand for it,” he said.
The increase will bring the district $28.9 million, which is about $3 million more than last year. The owner of a $150,000 home will pay about $45 more a year. Of that increase, $1.9 million will be used to help pay off construction debt. The district has been relying on its fund reserve to help make a scheduled $4.9 million transfer in the absence of money from sales of schools such as Central High School, which had been part of the original plan. But that fund now sits at $3.6 million, down from $14.7 million in 2010.
“It’s heartbreaking to hear, and we do understand,” said board member Mary Cameron. “I still believe we needed to move forward with the long-range facilities plan. There were unforeseen problems with selling our buildings. … I believe we needed to close buildings and we needed new facilities and environments to learn.”
Member Art Johnston said Red Plan consulting firm and manager Johnson Controls should have to answer for its claim that the plan would remain “tax neutral.” He said he’d rather extend payment on the 20-year bonds to 30 years than raise taxes. District business services director Bill Hanson said the district has researched that, and it wouldn’t be cost-effective.
“They aren’t eligible for re-funding yet. You’d issue new ones while repaying old ones,” Hanson said, noting it would end up costing taxpayers even more.
Member Mike Miernicki spoke of the many schools that have closed through the years and the savings that will eventually be realized because of it. But it’s early in the process, he said.
“I’m optimistic and I think we’ll have some positive changes,” he said.
r Also Tuesday, the board voted 6-1 to approve a $3 million transfer from the general fund to pay off Red Plan debt. Another $1.9 million will be added from the increase in taxes approved.
r The board approved unanimously the addition of three courses to both high schools: introductory physics, German V and robotics.