What would bond issue mean to school district residents

I first started at the Bemidji (Minn.) Pioneer as an intern in the summer of 1996. That would begin six years as a news reporter, sports reporter and copy editor for a small, six-day-per-week daily newspaper in northern Minnesota. I wrote a large range of stories from multiple beats, to features to sports, my favorite being the coverage of the Red Lake Reservation High School basketball team named the Warriors. Here is a collection of my stories from my time at the Pioneer.

July 23, 1997

By Devlyn Brooks

Staff Writer

Bemidji School District residents discovered this week for the first time the details about how much a new high school and elementary school would cost. The bottom line calls for a $40.8 million high school and a $7.7 million elementary school.

However, according to district Business Manager Bryan Westerman, if the state debt equalizing aid program remains unchanged over the period of the bond, the state would pick up the tab for almost half of the project.

The debt equalizing aid program was established by the state several years ago when more than 40 school districts sued the state for not funding each district equally. The state lost the suit, and in response established several aid programs to help poorer school districts, such as Bemidji.

In theory, the program would -- should the school projects pass -- pay 51 percent of the remaining amount of debt a school district pays annually that is over 10 percent of its net tax capacity.

In laymen's terms, the Bemidji district has a theoretical net tax capacity of $12 million, the amount of taxes the district should be able to collect through its levy. The state therefore pays for 51 percent of any debt the district pays annually over the amount of $1.2 million -- 10 percent of the $12 million. The district is currently paying $2.2 million in debt a year for four outstanding bonds, and so it is receiving $500,000 in debt equalization aid from the state.

According Westerman, if the two new schools were built, the cost would keep the district's debt above the 10 percent threshold. Thus, the state would be paying for 51 percent of the project for two years until the Middle School bond is paid off, and then because of the adjustment, the state would be paying for about 47 percent of the new project. Over the course of the entire bond, Westerman said the state would pay for about 46 percent of the two new schools.

So what does this mean to homeowners?

Westerman said it would cost the owner of a $50,000 home an additional $78 in taxes for the first two years, until the Middle School bond is paid, and then it would cost them an additional $45 a year in taxes. For a $75,000 home, it would cost an additional $121 in taxes for the first two years, and an additional $70 thereafter. And for a $100,000 home, it would cost an additional $199 in taxes for the first two years, and $115 after that.

However, these calculations were made in the end of May, and the tax regulations have already changed which will affect the numbers some. He said the numbers are good ballpark figures, though.