Understanding Property Tax Levies
Your property tax bill is composed of local and state property taxes. Local property taxes help fund local programs and services, such as public schools, fire and police protection, streets, libraries, and more. State property taxes fund school districts, towns, cities, counties, and other special taxing districts.
School District Property Taxes
In Minnesota, school districts have the option of levying property taxes to generate revenue for various educational needs. Voter approved levies are generally divided into three broad categories:
1. Operating Levies
- Purpose: These levies are used for the general operation of the school district, such as paying for teachers, support staff, programs, and materials.
- Approval: Voter approval is required through a referendum.
- Duration: Typically, these levies are approved for a set number of years, often 5 to 10 years, but they can be renewed.
2. Capital Project Levies
- Purpose: These funds are used for long-term capital projects, including building improvements, purchasing technology, or safety/security upgrades. They generally cover equipment, technology infrastructure, and other capital needs.
- Approval: Voter approval is usually required, though some smaller levies may be approved by school boards.
- Duration: Typically authorized for up to 10 years
3. Debt Service Levies (Bonds)
- Purpose: These levies are used to pay back bonds issued for capital projects like constructing new schools or major facility upgrades.
- Approval: Requires voter approval when the bonds are issued.
- Duration: Levied for the life of the bonds, often 20 to 30 years, until the debt is repaid.
