RE Tax Primer: Levy approval would raise property taxes

With the operational levy going on the spring ballot and the option to run permissive levies in play it’s reasonable that some community members are wondering how their taxes could be impacted.

The operational levy would be for the elementary district. 

The proposed levy would be for $195,000 and would run for one year. 

According to Miles City Unified Superintendent Keith Campbell at last week’s school board meeting, if they run the elementary operational levy at 16.88 mills it would increase taxes for a home worth $100,000 by $22.79 per year, while the taxes for a $200,000 home would increase by $45.58.

According to the Montana Office of Public Instruction (OPI), a mill is one-thousandth (.001) of a dollar. 

According to OPI, school districts can determine how much a mill will raise by taking the total taxable value in a district and multiplying it by .001. The result equals what one mill will raise for the district. 

An example given by OPI is if the taxable value of property in the elementary district is $46 million, that is multiplied by .001 which equals $46,000. This means that $46,000 would be raised by levying one mill. If the district needs to raise $2.5 million it would divide that by $46,000, showing that 54.34 mills would be needed. 

The money from an operational levy would go to budgeted funds like salaries, supplies, maintenance and more. 

The district hasn’t run an operational levy since 2013. 

Also during the last board meeting a resolution to allow school districts to run permissive levies was adopted.

A permissive levy is a non-voted tax levy.

This levy deals with revenue for tuition, the building reserve, transportation and bus depreciation. This would be for the 2018 fiscal year, which begins July 1. 

Usually the board doesn’t deal with permissive levies until August but due to Senate Bill (SB) 307 they had to vote on it in March, said Campbell.

According to Campbell, SB 307 is one of the last main bills left that could potentially help with school infrastructure. The bill would allow districts to permissively levy money into their building reserve budgets. 

SB 307 would also require the district to be more transparent with their permissive levies. This would require the district to tell the community every March what they expect to levy in those permissive funds. To do this a notice would be posted in the paper along with a notice on the district website. 

Currently, the district has permissive levies in place, said Campbell. 

“The school district each year runs permissive levies in transportation, bus depreciation and tuition,” Campbell wrote in an email. “At this time the board has no intention of increasing any of our permissive levies for next year.”

According to Campbell, the transportation levy is used to fund the district’s bus routes and individual transportation contracts. 

The bus depreciation levy is used to help the district replace buses. The buses that the district purchase are depreciated out, said Campbell. 

According to Campbell, the permissive levy for tuition is to help cover some of the costs of special services. These services cost more than the contribution of the state and federal government. 

According to Campbell, permissive levies do raise taxes to generate revenue

“This is really a non-issue at the time because the district isn’t asking for any addition permissive levies,” said Campbell.

If SB 307 doesn’t pass then everything will stay the same.