Understanding School Taxes

As we continue important conversations about school funding and the upcoming referendum, it’s important to clarify how school taxes work—and how they differ from those of other local municipalities such as cities and counties.

How School Taxes Work
Schools have different requirements than cities and counties when it comes to taxes. Each year, the State of Minnesota calculates an annual levy for every school district based on state funding formulas. Unlike city or county taxes, this levy is not a local choice but rather a state-directed allocation. Unfortunately, Cambridge-Isanti Schools receive less state funding than the average district in Minnesota.

If our community recognizes the need to increase funding beyond what the state provides, the only way to do so is through a referendum. 

A referendum requires the community to vote (take action) on a specific school funding question. In Minnesota, schools must hold a referendum any time they seek voter approval for additional operating funds (an operating levy) or for borrowing money to improve or construct facilities (a bond). Unlike cities or counties, schools cannot raise these funds on their own; they must first ask voters for permission through a referendum.

Key School Funding Definitions

• Voter-Approved Operational Levy:
  Sometimes referred to as a “Levy for Learning,” this levy must be approved by local voters. These dollars support the district’s general operations—primarily to hire and retain quality teachers, maintain academic programs, and strengthen Career and Technical Education (CTE) and vocational opportunities. The funds are restricted by law and cannot be redirected for facilities or construction projects.
   
• Voter-Approved Bond (Debt Service):
  A bond referendum allows the district to borrow money for major facility needs, such as updating or constructing school buildings. If voters approve, the district issues bonds that are repaid over time through property taxes. By law, bond dollars can only be used for facilities and cannot be used for teacher salaries, classroom supplies, or daily operations. “Bonds are for Buildings”
   
• Annual Levy (State-Calculated):
  The annual levy is determined by the Minnesota Department of Education using state funding formulas. School boards are required to certify this levy each year, but the amount is set by the state. These dollars are used for specific purposes like transportation, special education, or community education, and are not optional or locally determined.

The 2021 Levy for Learning - Voter Approved
In 2021, our community overwhelmingly supported a voter-approved Levy for Learning. These dollars are legally restricted to hiring and retaining high-quality teachers and improving Career and Technical Education programming. They cannot be redirected for buildings or other operational costs. It is notable that the actual tax amount levied to the community came in lower than advertised. Taxes can be lower than advertised, but cannot be more. Our district remains focused on managing voter tax-impact and using resources wisely to support students and the community 

Today’s Facilities Referendum on a Voter-Approved Bond for Building
That brings us to today. The School Board is asking the community to consider a Bond Referendum to update our aging school facilities. Like the 2021 levy, this requires voter approval. If approved, the funding could be used only for facility improvements as outlined in the plan.

Note the critical difference: while cities and counties can move forward on infrastructure without asking, schools must first bring the question directly to the community.