Bill aims to help seasonal, recreational property-heavy school districts manage low tax bases

There are 92 school districts in mostly rural Minnesota that have been unable pass an operating tax levy and are being forced to cut services, programs, teachers and sports to continue to operate.

“We’ve got a problem when a quarter of our school districts are falling behind with operating referendum,” Rep. Dave Lislegard (DFL-Aurora) told the House Education Finance Committee Tuesday.

He sponsors HF4986 that would give these school districts $8.4 million in tax base replacement aid to help with those operating costs. Approved on a voice vote, the bill was sent the House Taxes Committee.

Many districts in central and northern Minnesota have more seasonal and recreational property that doesn’t contribute to the local school operating levy, Lislegard said.

“This bill creates a seasonal recreational tax-based replacement aid aimed at reducing local tax efforts required for voter approval,” he said. “The bill does not give school boards additional levy authority. (It) would reduce the tax effort by as much as 50% in districts where the cabin market value represents a substantial portion of the total market value.”

[MORE: Estimate of fiscal year 2026 seasonal recreation property tax base replacement aid]

Jeff Burgess, superintendent of the Mesabi East School District, said the tax base in his district is very low and an operating levy would cost those taxpayers substantially more than other districts in the state.

“About 30% of our current property is state or federal land, which means I have a large chunk of the tax base which is already out,” he said. “So for me to pass a $500 operating referendum, it costs one-and-a-half to two times, sometimes two-and-a-half times, as much as other districts.”

Rep. Peggy Bennett (R-Albert Lea) said mandates placed on school districts during the 2023 legislative session are costing them too much money.

“It breaks my heart having to cut mental health services, having to cut teachers,” she said. “… This is needed but it’s needed because we put 65 new mandates on schools last year … I can understand why they’re looking for any flexible dollars that they can.”